Four More Years of the Bush Economic Legacy
[Guest post by DRJ]
In July 2007, CATO reported that President George W. Bush’s annual budgets increased federal spending from $1.863 trillion in fiscal year 2001 to $2.918 trillion in 2008. The budgets include increases in discretionary and non-discretionary spending. The budget forecast for fiscal year 2009 is $3.016 trillion in spending, and the financial bailouts may make that forecast look like wishful thinking.
Fortunately the US economy is strong and President Bush has been committed to tax cuts, so GDP has grown despite 9/11, the Iraq and Afghanistan wars and Hurricane Katrina.
The Presidential candidates have each offered their own economic plans. The National Taxpayers Union Foundation reviewed McCain’s discretionary spending proposals in June 2008 and estimated his policies will require $68.517 billion in annual spending. The NTU also analyzed Obama’s discretionary spending proposals and found that they would result in $343.586 billion in annual spending — more than 5 times as much as McCain’s.
James Pethokoukis at US News had previously analyzed Obama’s spending proposals and found similar numbers, estimating Obama’s policies would add a minimum of $1 trillion dollars in spending over 4 years, and far more if all Obama’s policies are implemented.
Last week, Obama acknowledged that tax increases on the wealthy could hurt a weak economy and he would consider postponing his proposed tax hikes. That’s good news for those taxpayers but bad news for Obama’s spending forecasts, which increase even more with less tax revenue to offset them.
Do you want four more years of the massive spending of the Bush economic legacy, but without the saving grace of the tax cuts? Then vote for Barack Obama.
— DRJ
I find it absolutely hilarious that the Dems in DC keep harping at how they are going to increase taxes on the “rich”, and think that there is no down-side to such an action.
They need to take a look at state gov’t in CA to see what emphasizing taxation on the “rich” and “very rich” can do to gov’t income.
In CA, when the economy is good, the cash just flows in like someone opened the gates at Hoover Dam (of course, when that does happen the Legislature finds ways to spend, and spend, and spend some more).
If tax receipts increase by 10-15%, our faithful leaders in Sacramento seem to find vitally needed projects that increase spending by 15-20%.
One-time increases in revenue are always matched up with long-terms commitments in spending.
This results in the structural deficit we enjoy in the state budget that now approaches $20B (or more – no one is really quite sure), against an overall budget of approx $140B.
They borrow against future revenue to pay today’s operating costs, and add more on-going programs and future costs that they have no real idea how they will fund.
The tax code is highly progressive, and the sales-tax is a killer: some jurisdictions in CA are facing a 9.25% sales tax, and Sacramento wants to add another 1% (10.25%) to pay for the “shortfall”.
How will all of this end?
If we’re lucky IMHO, in BK.
That’s the only way to get out from under the crippling state employee contracts, health care costs, and retirement costs. Do you know a cop/fireman in CA can retire at 55, with 30+ years on the job, and be paid 90+% of his last wage – it’s called 3/30? If anyone has the chutzpah to propose this in your city/county/state, Run – Don’t Walk away as fast as you can (unless, of course, you can stake them out on an ant-hill first).
So, unless we want to see a continueing deconstruction of most of our social and economic institutions, we need someone in DC who can stop the Leviathan from growing and spending.
Another Drew (12f8f2) — 9/20/2008 @ 10:56 pmI would hope it is Mr. McCain.
I fear that it will be the Mad Mullahs of Tehran.
Last week, Obama acknowledged that tax increases on the wealthy could hurt a weak economy and he would consider postponing his proposed tax hikes.
McCain also suggests he’s open to compromise:
James Pethokoukis, the US News blogger linked above, says McCain is “ultimately not a huge tax-cutter at heart.”
steve (63374a) — 9/20/2008 @ 11:10 pmWell Al Franken got his McCain hit piece in on Saturday Night Live. It was not funny.
Joe (8102a5) — 9/21/2008 @ 12:06 amOne of the smoke and mirror items in the politician’s arsenal is the Alternative Minimum tax. Suffice it to say I can’t explain it in less than 40 paragraphs. This is helpful but only a start.
voiceofreason2 (41262e) — 9/21/2008 @ 6:06 amPoint is that if AMT is not addressed anyone can claim that “we didn’t raise taxes”. AMT has a certain creep that pulls in more taxpayers each year because of inflationary effect on income. US News has an article that explains the creep a little.
But as relates to this thread I am more confident that McCain will do a far better job of checking the congressional spending and taxing.
Well, i think it’s a bit misleading to blame Bush for all of the “massive spending”. For one thing, when Bush came into office we were still spending the “peace dividend” (translation= cutting military/intelligence spending). After 9/11, everyone realized the peace dividend was all BS and america was way behind the curve in defense matters. This cost alot of money to correct, not to mention congress’s penchant for earmarks so the Bush Admin. made deals to get what they wanted. Could or should the administration have fought harder to keep congress from christmas treeing vital legislation? Probably, however, no one cares nor remembers the “massive spending” abe lincoln embarked upon starting in the spring of 1861.
james conrad (6bb6e6) — 9/21/2008 @ 6:08 amBut in an otherwise good economy tax increases are a good idea because…
a. liberals want to spend the money on pet projects,
capitano (211a15) — 9/21/2008 @ 6:11 amb. getting even with productive citizens is its own reward,
c. when the tax increases inevitably drag the economy down, liberals can blame it on an incoming GOP administration, or
d. all the above.
Paulson is doing the rounds this morning. Bloomberg was also on Meet the Press. Worth watching.
Joe (8102a5) — 9/21/2008 @ 7:09 amI’ll take the tax cuts w/o the federal spending, if you please. Bush never wielded that veto pen of his regarding the many gov’t spending programs presented to his desk over the years – I don’t know who was more fiscally irresponsible; him or the GOP Congress.
And now we have the drunks in charge of the bar tab – beautiful.
Dmac (e639cc) — 9/21/2008 @ 7:29 amAgreed. Bush’s failure, that will damage his long term image, is his failure to rein in Hastert and DeLay and their “K-street project.” Had he vetoed a few bills, I’d be more forgiving of his other flubs. The only thing he got right was Iraq and he could have done better there.
Mike K (b74f82) — 9/21/2008 @ 8:40 amWhere have the conservatives gone? I’m watching the Sunday morning news shows and seeing jaw dropping incompetence. Treasury secretary Paulson was at Goldman Sachs from 1974 to 1999 where he rose to CEO, so he was right in the middle of creating these asinine AAA rated mortgage backed securities. Now he is in the middle of the $1 trillion giveaway to holders of mis-financed homes, the irresponsible banks, irresponsible foreign banks, and the idiots who purchased the mortgage backed securities.
We’ve all heard the crazy stories about WaMu, IndyMac, and Countrywide lending behavior. In no form should those companies be allowed to continue at government expense.
This spending makes universal healthcare sound reasonable. This makes handing out another $50 billion stimulus reasonable. After this, nobody will care about fixing the SSN wreck. Obama’s plans will add $1 trillion over 4 years. Is that really significant any more?
Wesson (f6c982) — 9/21/2008 @ 8:49 amThis email is from a lawmaker and it should give you a flavor for what’s going on right now in Congress.
readnek (105b91) — 9/21/2008 @ 9:11 amThis spending makes universal healthcare sound reasonable.
— NOTHING makes UHC sound reasonable.
This makes handing out another $50 billion stimulus reasonable.
— And the count is oh-and-two.
After this, nobody will care about fixing the SSN wreck.
— K
Obama’s plans will add $1 trillion over 4 years. Is that really significant any more?
Icy Truth (b8f405) — 9/21/2008 @ 9:13 am— Uh, there’s no point to swinging and missing AFTER the stikeout.
No he didn’t. He said that tax cuts for the middle class can act as a stimulus. That doesn’t mean that a tax hike would hurt the economy.
To the contrary: there was a recent study on how tax cuts generally raise GDP that was much heralded by the right. An interesting conclusion the authors reached that was missed was that tax hikes that are aimed at deficit correction don’t slow GDP, but have a slight positive effect on growth (ie, Rubinomics was right)
jpe (bd88bc) — 9/21/2008 @ 9:16 amThe culture of corruption…
Another Drew (551fef) — 9/21/2008 @ 9:38 amDC, in grappling with the emergency of The Great Depression, adopted Keynesian Economics to get the economy going again (it didn’t work, but that is for another time). They fell in love with being able to spend money from the Treasury (they forgot where that money actually came from) on projects within their districts and states.
But, they forgot (or conveniently ignored) another precept of Keynesian thought: In good times, you increase taxes to pay down the debt that you ran up with deficit spending during the bad times.
No one in DC has ever had the backbone, when times are good, to pare-back the make-work (now called ear-mark) projects of deficit spending, increase taxes, AND pay down the National Debt.
They just keep spending, and spending, and spending.
The response from respected economists, and not fundamentalist hacks?
“Fuck you”
readnek (105b91) — 9/21/2008 @ 9:41 amWhat does the reason behind a tax hike have to do with the effect it has on GDP? Does business supposedly react better when a tax increase is enacted for a “good reason”? I’m thinking that they don’t give two shits what the reason is, and that they react the same way each time: cut service, product quality, and employee benefits to the bare bones, and if necessary raise prices in order to maintain profit levels. On the consumer side of the equation, between higher taxes and the stagnant wages that inevitably follow in its wake there is less money available for either discretionary spending or major purchases. Having a hard time seeing how any of that leads to an increase in GDP.
Icy Truth (feba14) — 9/21/2008 @ 9:45 amjpe, from the World Socialist Web Site, and while I am loathe to quote anything from a socialist…
Obama did say he would not recind the Bush tax cut if it meant problems leading to a recession….
reff (539a9d) — 9/21/2008 @ 9:49 amjpe…that would be raising taxes on the rich causing problems in a weak economy…
reff (539a9d) — 9/21/2008 @ 9:52 amAll this talk about the dangers of hiking taxes to the rich is such a laugh.. the same argument was made against the tax hikes on the wealthiest few placed by the Clinton administration… and if you go back far enough the same argument was made against Child Labor laws, and Social Security.
In the first Clinton term, every single Republican voted against a Clinton tax hike on top earners and predicted disaster. Yet the result was a balanced budget and sound economic progress…a combination that NO Republican has been able to deliver!
Of course, lets be fair and give Republicans their due. The rich have become much better off and so to that extent Repubs have served their constituents..
So now the result of all this Republican inspired deregulation designed to protect the nation from rampant and reckless speculation is this disaster but strangely enough all the “free market Republicans”, who havent the money to help out middle class folks, are now in favor of a massive Socialist style aid program at the expense of the American taxpayer while the directors of these and other companies they have run into ruin leave with multi-million dollar golden parachutes! THANKS SUCKERS!! VOTE MCBUSH…. AGAIN… ONE MORE TIME!! The rich need more money!
VietEraVet (543dfe) — 9/21/2008 @ 11:20 amAnd now a word from our sponsor…
The above 11:20 talking points regurgitation has been brought to you by the DNC… and by Alpo. ‘Alpo: if it’s good enough for VietEraVet to eat, why not your dog?’
qdpsteve (dc65ab) — 9/21/2008 @ 12:33 pmMarkets anticipate. That’s why. If they think interest rates will go down b/c of less debt, they react accordingly and activity accelerates.
jpe (bd88bc) — 9/21/2008 @ 12:35 pmRepublicans consistently mess the economy up. That’s what happens when you don’t think deficits matter.
jpe (bd88bc) — 9/21/2008 @ 12:37 pmYeah, that’s the ticket..the not tax but spend like a drunken sailor Rethuglicans. Liberals are fsically conservative. Umgahwah, Barry O’s proposed spending excesses are so low compared to McCain’s? Wow, cheap socialized medicine, tax cuts for 95% of Americans and only those greedy suckers in top 5% will have it jacked up? Bring on that $10 gallon gasoline to achieve parity with the socially conscious Euroweenies. Excessive proits tax the hell out of those feeelthy rich oil companies. Raise those capital gains rates even though the higher they go, the less you’ll bring in as tax receipts on an absolute basis. And if you disagree with the Lord Obama in any way, you are a racist. Dissent is unpatriotic. The media is looking out for the welfare and security of American people and that’s why we have to coddle terrorists and also provide them with our secrets. Dems have been in power in Congress for past two years and it sure seems like everything is going south quickly. Yassuh, Reid and Pelosi are the best this country can do- integrity, commonsense and more stimlus payments will rectify any more woes.
madmax333 (0c6cfc) — 9/21/2008 @ 12:54 pmVietEraVet, your recollections of the Clinton administration are not very complete. Clinton era budgets were balanced only for a very short period and largely because of capital gains revenues that exceeded projections due to the tech bubble.
SPQR (26be8b) — 9/21/2008 @ 1:09 pmComment by SPQR — 9/21/2008 @ 1:09 pm
Another Drew (551fef) — 9/21/2008 @ 1:16 pm…and, because a GOP led Congress in ’95 forced the President to limit spending increases to a lower growthline than had been used, enabling revenues to catch up to spending.
I think VEV only gets to spend a few minutes on the computer a day in the nut hut where he lives.
daleyrocks (d9ec17) — 9/21/2008 @ 1:43 pmHe has just got to get a bigger solar panel…
Another Drew (551fef) — 9/21/2008 @ 1:59 pmOf course, jpe would ignore “rebukes” of his post…it is what liberals do…
Ignore facts that get in the way of their beliefs…
reff (539a9d) — 9/21/2008 @ 2:29 pmVietEraVet —
All this talk about the dangers of hiking taxes to the rich is such a laugh.
— There’s no danger whatsoever? THAT is a laugh.
the same argument was made against the tax hikes on the wealthiest few placed by the Clinton administration
— Hence, poor unemployment numbers and the recession of 2001.
and if you go back far enough the same argument was made against Child Labor laws, and Social Security.
— The argument against Social Security was true then, and is true now.
In the first Clinton term, every single Republican voted against a Clinton tax hike on top earners and predicted disaster.
— Such as the aforementioned bad statistics.
Yet the result was a balanced budget and sound economic progress.
— And by “sound” you mean SLOW.
a combination that NO Republican has been able to deliver!
— His name was General Eisenhower to you. Compared to Clinton he had the same rate of growth with lower inflation AND a lower ratio (by half!) of deficits to GDP.
Of course, lets be fair and give Republicans their due. The rich have become much better off and so to that extent Repubs have served their constituents.
— With no one but rich people voting for them, it’s a wonder that they ever get elected. Hmm, I wonder how ANY Democrats could afford that $28k-per-plate dinner for Obama.
strangely enough all the “free market Republicans”, who havent the money to help out middle class folks, are now in favor of a massive Socialist style aid program
Icy Truth (6273ad) — 9/21/2008 @ 2:54 pm— Who said they were all in favor of it?
To be specific, the rate of growth under both Eisenhower and Clinton was 3.77%. Inflation under Ike averaged 1.4%; under Clinton it was 2.6%. Under Ike deficits averaged $5.50 for every dollar of GDP; under Clinton the average — even with those much vaunted surpluses at the end of his 2nd term — was $11.70.
Icy Truth (6273ad) — 9/21/2008 @ 3:05 pmBarack Obama: Principles for the Nationalization of Mortgage Finance
No blank check. If we grant the Treasury broad authority to address the immediate crisis, we must insist on independent accountability and oversight. Given the breach of trust we have seen and the magnitude of the taxpayer money involved, there can be no blank check.
Rescue requires mutual responsibility. As taxpayers are asked to take extraordinary steps to protect our financial system, it is only appropriate to expect those institutions that benefit to help protect American homeowners and the American economy. We cannot underwrite continued irresponsibility, where CEOs cash in and our regulators look the other way. We cannot abet and reward the unconscionable practices that triggered this crisis. We have to end them.
Taxpayers should be protected. This should not be a handout to Wall Street. It should be structured in a way that maximizes the ability of taxpayers to recoup their investment. Going forward, we need to make sure that the institutions that benefit from financial insurance also bear the cost of that insurance.
Help homeowners stay in their homes. This crisis started with homeowners and they bear the brunt of the nearly unprecedented collapse in housing prices. We cannot have a plan for Wall Street banks that does not help homeowners stay in their homes and help distressed communities.
A global response. As I said on Friday, this is a global financial crisis and it requires a global solution. The United States must lead, but we must also insist that other nations, who have a huge stake in the outcome, join us in helping to secure the financial markets.
Main Street, not just Wall Street. The American people need to know that we feel as great a sense of urgency about the emergency on Main Street as we do the emergency on Wall Street. That is why I call on Senator McCain, President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families – a plan that would help folks cope with rising gas and food prices, save one million jobs through rebuilding our schools and roads, help states and cities avoid painful budget cuts and tax increases, help homeowners stay in their homes, and provide retooling assistance to help ensure that the fuel-efficient cars of the future are built in America.
Build a regulatory structure for the 21st Century. While there is not time in a week to remake our regulatory structure to prevent abuses in the future, we should commit ourselves to the kind of reforms I have been advocating for several years. We need new rules of the road for the 21st Century economy, together with the means and willingness to enforce them.
JAR (ab000b) — 9/21/2008 @ 3:05 pmWhat did you do to be allowed back — strike a deal where all you can do is cut-and-paste with no additional commentary?
Icy Truth (6273ad) — 9/21/2008 @ 3:08 pmComment by Icy Truth — 9/21/2008 @ 3:05 pm
Icy…Are you positive about the relationship to GDP of those deficits?
Another Drew (551fef) — 9/21/2008 @ 3:19 pmPerhaps you misplaced a decimal place?
VietEraVet have you made comments at this site using a different name? Your positions are similar to those of another person who has been active here for several years.
PS: Your link in inop.
Ropelight (b9f273) — 9/21/2008 @ 3:20 pmGod, now he’s resorted to putting the inane Obama PR release of the day on his posts – wow, quite the independent thinker, eh, Jar?
YOU VILL OBEY THE MESSIAH! ALL HAIL ARUGULA!
Dmac (e639cc) — 9/21/2008 @ 3:21 pmSo basically, Obama has no actual constructive input to the situation, just fatuous platitudes of the kind that cause Obama cultists to stain their shorts.
SPQR (26be8b) — 9/21/2008 @ 3:42 pmAnyone with administrative privileges, delete JAR’s comment and ban the IP again.
Patterico (25304e) — 9/21/2008 @ 3:47 pm‘Splain to me this, oh ye whiners for the rich. One of the richest men in America, Warren Buffet, found that his secretary was paying a higher tax rate than he was. If the richest people in America are complaining about it – even one of them – then maybe, just maybe, we’re letting them off easy.
Psyberian (9f6817) — 9/21/2008 @ 4:03 pmEasy…
Another Drew (551fef) — 9/21/2008 @ 4:10 pmThe majority of WB’s income is in the form of Capital Gains, which is taxed at a lower rate than earned income, which he pays his secretary.
Perhaps he should have given her a better stock-option plan where she could have cashed in on the fantastic appreciation of Berkshire-Hathaway stock.
Of course, even an economic genius such as WB would have known the facts, and that he was just trying to make a political point. I would hope that Psyberian could understand the difference also.
Simplistic sloganeering like yours Psyberian, no doubt thrills the Obama cultists but does not add any light to the subject.
Wealthier people make more income in ways that we’ve decided to encourage. That’s why capital gains tax rates are lower, to encourage that form of investment.
Silly proposals to punish people who have actually followed the investment strategies that Congress wanted to encourage will just lead to reduced investment.
SPQR (26be8b) — 9/21/2008 @ 4:10 pmYou guys are way, way out of touch.
Most people – you know, the middle class – don’t have the option to avoid taxes. Therefore, you’re saying, in effect, “Too bad suckers, we got ours, screw you.” I don’t think that attitude should get many votes. I certainly hope not.
Psyberian (9f6817) — 9/21/2008 @ 4:21 pmBTW, WB is a Democrat.
Another Drew (551fef) — 9/21/2008 @ 4:28 pmPsyberian, have a look at VietEraVet’s comments. He seems to me to have views quite similar to yours. Do you happen to know him?
Ropelight (b9f273) — 9/21/2008 @ 4:29 pmPsyberian, that’s not actually true.
First of all, your line “avoid taxes” is a misrepresentation on your part.
Middle class people do get to enjoy the capital gains rate, and many other tax advantages. They just don’t get to enjoy those advantages on the same proportion of their income.
Punish investment, Psyberian, and see how many you put onto the unemployment line.
SPQR (26be8b) — 9/21/2008 @ 4:29 pmpsyberian – You guys are way, way out of touch.
You’re the one out of touch. You use Buffet’s secretary story without seeing the point. Warren Buffet made far more than his secretary, yet found his secretary in a higher tax bracket, due to tax incentives.
Your solution? Tax him more, not lower hers.
Your slogan isn’t screw the rich, its screw everyone.
Apogee (366e8b) — 9/21/2008 @ 4:37 pmRopelight, why are you obsessed with who knows who and who’s who? No, to answer your question I don’t know VietEraVet.
SPQR, what percentage of the middle class substantially benefits from low taxes on capital gains? By substantial I mean more than, say, $20,000 a year. I bet that’s a small percentage – and a small voting block too!
Psyberian (9f6817) — 9/21/2008 @ 4:37 pmApogee, OK, lower the taxes on her. Fine.
Psyberian (9f6817) — 9/21/2008 @ 4:38 pmAnd another thing. Buffet isn’t stupid – he just doesn’t want any competition. He’s not clamoring for anything that would take down Berkshire Hathaway.
Tax the super rich and you get the super rich with more offshore holdings.
Tax the well paid and you get business failures, reduced investment and unemployment. Carter all over again.
Tell me this: If Buffet was having trouble making ends meet, do you think he’d still have a secretary?
Apogee (366e8b) — 9/21/2008 @ 4:42 pmActually, I find this whole notion about being scared to raise the taxes on the rich ludicrous. You mean to tell me that our rich brothers and sisters would bolt if they had to pay the same tax rate as regular work-a-day folks? That’s ridiculous on the face of it.
What are they going to do anyway, move to Mexico or China? Oh yeah, they’re already doing that anyway aren’t they?
Psyberian (9f6817) — 9/21/2008 @ 4:48 pmPsyberian, you continue to misrepresent the actual issue. Does this make you feel better about your economically ignorant proposals?
SPQR (26be8b) — 9/21/2008 @ 4:50 pm#46, I’m not obsessed. I took note of VietEraVet’s comments and thought of you. You’re a Vet from the Vietnam era.
VietEraVet said he was in the Air Force and stationed at Clark AFB in the early ’70s.
You, if I recall, were in the Air Force and stationed at Clark AFB in the early ’70s. And, since his views are similar to those expressed by you, it occured to me you might know him.
That’s not indicitive of an obsession, it’s a logical question, or don’t you agree?
Ropelight (b9f273) — 9/21/2008 @ 4:54 pmDRJ, off the top I would like to say I believe you are an honest broker of information. I also believe in the old adage “trust but verify.’ So I followed your link to the National Taxpayers Union Foundation (NTUF) and further into the detailed PDF’s they provide for both candidates’ spending proposals (PDFS: Obama McCain). Unfortunately, the National Taxpayers Union Foundation are NOT honest brokers of information.
The first thing that hits you when looking through the spending proposals is how much more detailed Obama’s programs are versus McCain’s – 62 pages vs. 20 – this is significant, and not just because Obama has more spending programs (he does), but because when a program has insufficient detail NTUF simply lists “Cost: Unknown”. Obama ends up with significantly higher costs simply for supplying detailed information about his proposals – which is kinda funny for the candidate who is “all talk, no substance”. For example both candidates call for an expansion of the armed forces: Obama provides actual troop numbers – “Cost: $6.624 billion”; McCain provides no numbers – “Cost: Unknown” (i.e. $0 in NTUF’s calculations). Obama is penalized throughout the comparison simply for providing the substantive details he is constantly accused of not providing. Another egregious example is the charge to Obama of $9.8 billion for his support of McCain’s immigration bill that failed in the 109th Congress – matching charge to McCain, $1.5 billion for enforcement of immigration laws and 670 miles of border fence (they note McCain has said he wants to spend more in this area, but unfortunately there’s no detail).
The second thing that immediately hit me was the tax cuts Obama has proposed are heavily detailed throughout the report to the tune of around $100 billion/year. But McCain has proposed even greater tax cuts (by including all top income earners and business tax cuts) – none to be found; not even a “Cost: Unknown”! “Gas Tax Holiday”? Nope. What about the Tax Revenues Obama has proposed by raising tax rates on those making over $250,000? Sadly, no – these are costs only. This isn’t even comparing apples to oranges!
Obama’s Health Care Plan – $65 billion ($100.848 bil. overall); McCain’s proposal to provide $2,500/individual or $5,000/family refundable tax credits – NTUF estimated cost $2.856 billion (lets see: $2.856 b./$2,500 = 1,142,400 people; that seems a tad low!) The Tax Policy Center has estimated the cost of McCain’s Refundable Health Insurance Tax Credit as $1.3 trillion over 10 years ($1.3t./10 years = $130b./year/$2,500 = 52,000,000 – that looks more reasonable).
I recommend those interested look through the PDF’s to confirm for themselves the mendaciousness of the NTUF – I also recommend spending some time reading through Obama’s spending proposals and note who they benefit as well as how many programs he already had in place that will minimize the risk of all that bad debt the US taxpayer just bought.
For a more realistic comparison I suggest the Tax Policy Center’s easy to read breakdown of the candidates’ tax plans (PDF). Incorporating the information provided by them with the useful information on spending programs the NTUF does supply, I calculate Obama’s additional spending promises to be $87.56 billion While McCain’s will cost an additional $132.285 billion (using an overly generous method). (I can provide the details of how I calculated these figures if anyone is actually interested)
For those arguing that Obama’s tax hikes on the wealthy (the Tax Policy Center calculates a 1.5% or $19,000 average tax increase on the top 1% of income earners, plus a 2 percent income tax surcharge on adjusted gross income above $250,000 for couples and $200,000 for others and an additional 2 percent payroll tax for employers on each worker’s earnings above those levels vs. McCain’s tax cut for those in the top 1% by more than $125,000, raising their after-tax income an average 9.5 percent) and on corporations would slow economic growth, I also recommend you read Robert Reich’s (I know he’s not gonna be popular around these parts, but the article is short) short primer on top down vs. bottom up growth for a fresh perspective. I also liked his “Modest Proposal for Ending Socialized Capitalism“.
Sorry for the length, I’m actually fiscally conservative and for some reason this got under my craw. Let the ad hominems begin….
[I found this comment in the filter at 5:21 PM PST. –DRJ]
Bob Loblaw (6d485c) — 9/21/2008 @ 4:56 pmAnd just how am I misrepresenting the issue SPQR? In your mind, people don’t “avoid taxes”? You’re going to have to do better than that. That doesn’t even make sense.
And Apogee’s over here worrying that Warren Buffet might not make ends meet. Amazing.
Psyberian (9f6817) — 9/21/2008 @ 4:58 pmYou forget that, like the example of the IRS targeting the poor because they don’t have to deal with professional accountants and complex tax law, wealthy people in the US simply follow the guidelines that Congress puts forth in order to spur investment in certain industries.
They are not behaving illegally.
There was a reason that the reporters were shoved into the street at the Democratic convention when they tried to photograph delegates, candidates and corporate lobbyists gathering for meetings.
That reason is that there is an 11,000 page tax code, which is so complex due to the fact of incentive after incentive piling up regarding funneling money to the ‘right’ people and businesses, that meetings have to be held about small changes to it that will result in millions for the corporations and, by that trickle-down theory, their sponsored politicians.
You admit there’s a problem with earmarks, and yet fail to see that those earmarks are spent primarily on civilian businesses.
All wealthy people do is emulate the tax structure of businesses taking advantage of loopholes created by Congress for the express purpose of stimulating political gains by the politicians and businesses together.
It’s quite possible that Buffet doesn’t own a car or a plane. His business, OTOH, might own several, and if you want to tax Buffet’s business on his plane and car, then you have to likewise tax Al Gore’s business’s car and jet.
And that’s not going to happen. Welcome to the true bipartisan platform. They’re making money while we argue on the internet.
Apogee (366e8b) — 9/21/2008 @ 5:02 pmpsyberian – Apogee’s over here worrying that Warren Buffet might not make ends meet.
Not my point at all. I was asking the hypothetical question that if Buffet were having trouble making ends meet, do you think he’d still have a secretary? You don’t seem to be able to recognize a hypothetical, so I’ll change it. Now it’s not Buffet, but a small accounting firm with a CPA and a secretary.
The point being that the CPA employs the secretary. He is the boss, and will eliminate her job before his own. Higher taxes make that scenario more likely, and, IMO, far less ‘fair’ to the secretary.
Apogee (366e8b) — 9/21/2008 @ 5:08 pmIt’s quite possible that Buffet doesn’t own a car or a plane
B-H actually owns one of the major players in the executive jet leasing/fractional ownership business.
Another Drew (551fef) — 9/21/2008 @ 5:12 pmBut Another Drew! Buffet flys around on his jet all the time. That means he’s rich! And we have to get at that money!
How do I know he’s rich? He has shiny things! Lots of shiny things! Too many shiny things, and far more than other people! We need to take away his shiny things.
But not give them to other people. No, we’ll hold on to them for the time being, and then give some things to some people, who sometimes are people I’m friends with and like.
Apogee (366e8b) — 9/21/2008 @ 5:17 pmI’m no historian, but I do believe that the Eisenhower era was characterized by bottom up growth – a rapid expansion of the middle class following major government investment in that growth following WWII.
Bob Loblaw (6d485c) — 9/21/2008 @ 5:20 pmIf you want to see the effect of taxing the “rich” or “super rich”, just look to CA, where the progressivity of the tax-code has chased small-business owners out of the state, and some out of the country. An effect that has exacerbated the revenue problems of the state so that there is now a continual structural deficit of approx. 15-20% – with a budget, that by constitutional law, must be balanced.
Another Drew (551fef) — 9/21/2008 @ 5:22 pmAnother Drew – just look to CA
Look to it? I’m standing on it.
Apogee (366e8b) — 9/21/2008 @ 5:27 pmComment by Bob Loblaw — 9/21/2008 @ 5:20 pm
What investment would that be other than the contruction of the Interstate Highway System?
If in the 40’s, a good investment in social policy might have been the Taft-Hartley Act that put the brakes to some of the worst excesses to come from the minds of Meany, Reuther and the other labor barons.
Then, another great investment was the SCOTUS reversal of Truman’s nationalization of the steel industry.
Please, tell us what these great investments were?
Another Drew (551fef) — 9/21/2008 @ 5:28 pmComment by Apogee — 9/21/2008 @ 5:27 pm
Congratulations on finding a high spot.
Me, I think I’m standing in it!
Another Drew (551fef) — 9/21/2008 @ 5:31 pmI’m thinking primarily of the GI Bill as well as the effects of all the other New Deal investments.
Bob Loblaw (6d485c) — 9/21/2008 @ 5:34 pmAh, but those weren’t Ike’s doing, were they?
And, most of the New Deal stuff can be charitably classed as “make work”, and had virtually no lasting influence.
I will give FDR credit for TVA (though there is still a lot of opposition to that by people who lost good land to it), and to REA.
But, just why is TVA still on the gov’t books?
Shouldn’t it have been sold off years ago?
In fact, since the gov’t is going to have to market the MBS’s that they are going to acquire, why not start to pull other viable enterprises off of the gov’t books too?
TVA, AMTRAK, there are many operations on the books that should be in the private sector.
Let’s get really serious about reducing the size of the Leviathan before it swallows us all.
Another Drew (551fef) — 9/21/2008 @ 5:42 pmAnother Drew – That’s gonna be almost impossible to get off your shoes.
One thing about Eisenhower that hasn’t been repeated is a candidacy wooed by both parties.
Apogee (366e8b) — 9/21/2008 @ 5:47 pmSo what would Obama do to alter the march of socialism/marxism? Had a liberal apologist tell me that Obama’s play time with the Chicago machine was very limited and that he actually worked with many good people. So who are these “good” people (seriously)?
Much as many of us are loathe to praise, he’s made a real effort to work across party lines, as has Bush at times (actually more like kissing some liberals asses, imho)
Ann Althouse has a post about Nurse Bloomberg telling us we need to work together in a non-partisan fashion. So she has a poll- which dude would we vote for if Bloomberg, McCain and Obama were all on the ballot. When I took it, it was ten for McCain and one for Bloomberg, with the Big O shut out…an anomaly because there are a plethora of libs on that site.
madmax333 (0c6cfc) — 9/21/2008 @ 5:49 pmAnother Drew, I wasn’t actually crediting anything to Ike, just noting that the effect was at play during his administration.
You kinda lost me with the rest of the acronym alphabet soup though 😉 (I know what the REA is!)
Bob Loblaw (6d485c) — 9/21/2008 @ 5:49 pmTennessee Valley Authority.
Another Drew (551fef) — 9/21/2008 @ 5:53 pmThe primary effect of the “New Deal” was to delay the US’ exit from the Depression. The idea that the government intervention in the ’30’s, which was in fact counterproductive to economic stimulus suddenly was great economic stimulus two decades later is rather difficult to take seriously.
SPQR (26be8b) — 9/21/2008 @ 5:55 pmSPQR: Even Social Security? I would think that had an overall positive effect in the 40’s & 50’s?
(N.B. As I said I am no historian, and I wouldn’t even want to play an economist on TV 😉 )
Bob Loblaw (6d485c) — 9/21/2008 @ 6:05 pmBob Loblaw, social security is not going to be an economic stimulus.
SPQR (26be8b) — 9/21/2008 @ 6:06 pmHmmmm. Bob Loblaw constructs his own model of Obama and McCain fiscal plans and discovers that, are you ready folks, SHOCKA!!!!!, Obama’s will cost the country less than the free spending, devil may care, it’s other people’s money, gouge the taxpayer, I’m here for the pork, JOHN MCSAME. The facy that Obama has never voted for a tax cut or fiscal restraint is somehow untroubling to moron supporters like Bob who expect Obama to change stripes once he gets in office. Hope, change, pray!
Then Bob dares to cite New Deal investments as an example of bottom up prosperity and an example of what we need today in contrast to Republican ideas, but betrays his basic ignorance of the topic by not recognizing standard acronyms of the New Deal investments he touts or understanding that goverment crowded out the private sector for periods of that era.
Epic fail Bob.
daleyrocks (d9ec17) — 9/21/2008 @ 6:07 pmI would think retiree’s having money to spend as opposed to not having money to spend would be economic in nature?
Bob Loblaw (6d485c) — 9/21/2008 @ 6:12 pmBob Loblaw, every dollar that retiree’s obtained from social security in the ’50’s was taken from another person’s income. Retiree’s had money to spend because someone else had less to spend.
SPQR (26be8b) — 9/21/2008 @ 6:22 pmBob Loblaw — 9/21/2008 @ 4:56 pm (comment #53):
I appreciate your initial statement that you believe I try to be honest about the sources I link, because I do. That’s one reason why I cited not 1 but 2 sources for Obama’s spending proposals, because I wanted to have more than one analysis from different sources.
Please look again at the NTU analysis of Obama’s spending proposals, and this time look only for the words “Cost: Unknown.” That’s what the analysis says when it identifies a specific policy or proposal that Obama has made and the NTU was unable to document a value for the cost of that proposal. What you will see is that the words “Cost: Unknown” appear at least 85 times in the linked analysis of Obama’s spending. In 5-10 instances, the NTU included estimates of the costs in Obama’s spending totals but that leaves 75-80 times when no costs are included in Obama’s spending total for spending proposals he made.
Now compare that with the McCain spending analysis where the phrase “Cost: Unknown” appears approximately 30 times.
I think it’s natural for those who want to believe Obama to trust that he won’t break the bank with spending, and the same is true for those who are inclined to McCain. But I think it’s fair to believe Obama has made more proposals of government spending than McCain and, if anything, the cost estimates by the NTU will only go up as values are assigned to each promise.
Of course, you are certainly free to believe that McCain is the candidate who has promised more and bigger government spending, but I think Investors Business Daily got it right when it stated that portraying McCain as the big spender in this election is wrong and that “when liberals accuse McCain of being a big spender, what they really mean is they don’t like his tax-cut proposals.” It’s telling, I think, that your rebuttal is based on a comparison of the candidates’ tax plans done by the Brookings Institute instead of their spending plans. Isn’t it possible that your problem really is, as IBD states, that you don’t like McCain’s tax plans as compared to Obama’s?
And, either way, how do the candidates’ tax plans rebut NTU’s analysis of the candidates’ spending plans?
DRJ (0754ed) — 9/21/2008 @ 6:28 pmDRJ – remind me never to make you angry.
Apogee (366e8b) — 9/21/2008 @ 6:31 pmApogee, by that logic, if the secretary was paid 2 cents an hour, there would be no reason for making the taxes even. And that’s all I’m asking for, even.
If the rich can’t even pay taxes at the same rate we do, then something’s dreadfully wrong with capitalism. That’s all I can say.
Psyberian (9f6817) — 9/21/2008 @ 6:32 pmClarification: I don’t think you’re being angry here, and you’re eviscerating Lowblaw. That’s why I don’t ever want to see you actually get angry.
Apogee (366e8b) — 9/21/2008 @ 6:32 pmpsyberian….if taxes paid were even remotely close to “even” then you might have a point..
But, with the IRS telling us that 40% of wage-earners in America have NO TAX LIABILITY, meaning, that they don’t even pay sales tax, because they receive a supplement from the government which offsets any tax liability, we are very close to having less of those who pay any tax supporting more than half the rest….
EVERYONE SHOULD PAY SOMETHING….even if it is only a dollar….
The rich (the upper 5% of wage-earners) pay 70% of all taxes collected….the top 1% pay 40%…
This cannot continue and our nation continue to grow….at some point, the tables will turn…
Of course, you’re against tax cuts, but, the Bush tax cuts have led to a 19.1% increase in total tax income to the government in the past 8 years, but, that doesn’t matter either, does it???
reff (539a9d) — 9/21/2008 @ 6:40 pmTry to learn about what tax cuts mean, and how they increase income to the government.
reff (539a9d) — 9/21/2008 @ 6:42 pmPsyberian, the “rich” end up paying more of the tax revenue than the rest of taxpayers, out of proportion to their share of income even, if you actually look at the actual statistics published by the IRS.
SPQR (26be8b) — 9/21/2008 @ 6:43 pmSo you’re saying Mr. Buffet doesn’t know what he’s talking about. I think that paying the same percentage would be fairer than what it is now.
Also, I doubt seriously that 40% of us “wage earners” (us poor lost souls) pay no sales taxes. Even if so, that ignores a huge tax – the income tax we pay. Does that figure include children and elderly people or something?
Psyberian (9f6817) — 9/21/2008 @ 6:56 pm“If the rich can’t even pay taxes at the same rate we do, then something’s dreadfully wrong with capitalism. That’s all I can say.”
Psyberian – We have long used the tax code to encourage or discourage certain types of economic activity in this country. You seem to have a fundamental problem with that approach, which is fine, but not an issue with capitalism per se. The government has decided to encourage long term saving by taxing capital gains at rates different that ordinary income. That’s fact. The government has also decided to encourage home ownership through the preservation of the mortgage interest deduction as one of the only interest deductions on individual returns. That’s another use of the tax code for social engineering policy. The tax exclusion of municipal bond interest from federal income tax, which may also help explain Buffet’s low tax rate, is yet another carve out built into the federal tax code to ease the ability of municipalities to raise money. We also know nothing of Buffet’s charitable activities. Did he give large amounts to charity to help explain his low tax rate.
Your whining about low tax rates for one rich individual does nothing without understanding the details which gave rise to it. Complaining about tax rates without understanding about distribution of the burden under the current system is a suckers game. Crying out for fairness is stupod because there is no universal definition of fairness
daleyrocks (d9ec17) — 9/21/2008 @ 7:13 pmNo, psyberian, those statistics only include full time wage earners….children who live at home get a 100% tax return….the IRS stats reflect those who receive a government supplement in some form, which offsets a level of sales taxes….
Remember, for example, that the EITC is worth $2300 per child, meaning, that for a person in Louisiana, for example, to get this they would not be paying state or federal income taxes, and the $2300 would be equal to a sales tax expenditure of spending income worth about $20,000 take-home….extremely high for someone with no tax liability….and that doesn’t include any other government subsidy, such as housing allowance, food assistance, or medicaid/medicare….
Now, for your comment about “paying the same percentage”…
If only that were true….my wife and I are school teachers, in Louisiana where teachers are in the bottom 5 states in teacher pay, and our combined incomes are just under $110K….more than adequate to live on, and we are supporting our daughter in college, paying her entire costs, no loans, so that she can start her life off without debt….my home is valued at just under $100K, half paid off, we have three cars, two paid for, and under $100K in total savings….I do have an excellent retirement, worth about $45K a year beginning at 55, or $55K if I wait 5 years….wife’s is about half that, since she entered teaching early…we’ll be ok…
My federal tax bill last year was $31,000; state tax 11,000, and I added up another $4000 in sales taxes….so, my basic tax bill was $46,000, or nearly half my gross income….
reff (539a9d) — 9/21/2008 @ 7:32 pmNo, psyberian, those statistics only include full time wage earners….children who live at home get a 100% tax return….the IRS stats reflect those who receive a government supplement in some form, which offsets a level of sales taxes….
Remember, for example, that the EITC is worth $2300 per child, meaning, that for a person in Louisiana, for example, to get this they would not be paying state or federal income taxes, and the $2300 would be equal to a sales tax expenditure of spending income worth about $20,000 take-home….extremely high for someone with no tax liability….and that doesn’t include any other government subsidy, such as housing allowance, food assistance, or medicaid/medicare….
Now, for your comment about “paying the same percentage”…
If only that were true….my wife and I are school teachers, in Louisiana where teachers are in the bottom 5 states in teacher pay, and our combined incomes are just under $110K….more than adequate to live on, and we are supporting our daughter in college, paying her entire costs, no loans, so that she can start her life off without debt….my home is valued at just under $100K, half paid off, we have three cars, two paid for, and under $100K in total savings….I do have an excellent retirement, worth about $45K a year beginning at 55, or $55K if I wait 5 years….wife’s is about half that, since she entered teaching early…we’ll be ok…
My federal tax bill last year was $31,000; state tax 11,000, and I added up another $4000 in sales taxes….so, my basic tax bill was $46,000, or nearly half my gross income….
Please tell me what the “same percentage” should be??? When 40% of wage-earners are paying NO PERCENTAGE AT ALL?????
reff (539a9d) — 9/21/2008 @ 7:33 pmsorry for the spamming….I thought I only hit it once….
reff (539a9d) — 9/21/2008 @ 7:34 pmreff,
Don’t worry about it. That happens to me, too.
Apogee,
I don’t get mad very often and it’s a good thing. I’d probably just sputter and spit and not make any sense.
DRJ (0754ed) — 9/21/2008 @ 7:49 pmYou have a link to that reff?
Psyberian (9f6817) — 9/21/2008 @ 7:53 pmIRS.gov
reff (539a9d) — 9/21/2008 @ 8:00 pmpsyberian – I disagree with you when you say – something’s dreadfully wrong with capitalism.
Something’s wrong with the idea that the government can be trusted to ‘run’ the free market. That is not, and never has been its function. The function of government is to ensure the the market stays free. Why would someone like Milton Friedman argue that businessmen and communists wanted the same thing?
So you’re saying Mr. Buffet doesn’t know what he’s talking about.
Apogee (366e8b) — 9/21/2008 @ 8:02 pmWe’re saying that someone with his knowledge of current tax codes and rates is making an insincere statement. For what purpose, I can only guess at and already did in #48.
DRJ…I don’t really get mad…I’m like any other American…I understand what our government does, and who it does it for…
And to…
I just know that the day is coming when we will have more people NOT paying taxes than we will paying taxes….
And, as the Evil Emperor says to Luke Skywalker…
“And, your turn to the dark side will be complete…”
I can only hope that those who get run into the truth sooner than later….
reff (539a9d) — 9/21/2008 @ 8:05 pmpsyberian….
You didn’t answer the question: What would that “same percentage” be for taxpayers???
Another: What is a reasonable percentage of income that the government should take from wage-earners???
I’d settle for a maximum of 25%….but, I also believe that EVERY WAGE EARNER should pay something….
reff (539a9d) — 9/21/2008 @ 8:09 pmWhen I do my taxes, I could easily forego any deductions for interest or what have you. Doing this increases my tax liability. What’s stopping Buffet et al from doing this? He’s upset that his tax rate is lower than that of his secretary’s? He can do nothing about that?
h0mi (d2c7b6) — 9/21/2008 @ 9:41 pmDRJ,
Of course I support Obama’s more comprehensive approach to lower income tax cuts and worthwhile programs supported by reasonable tax increases at the highest levels – I think it is an overall better plan for America. I think that it was unfairly presented in their non-comprehensive approach and I also believe that was deliberate. I think McCain’s plan will increase the deficit to a greater extent than Obama’s, and I feel that needs to be part of the overall discussion. Same as simply discussing the overall gains in tax revenues provided through Obama’s plan without mention of his spending increases would be an unfair way to assess his plan against John McCain’s (see Tax Policy Center analysis previously provided 😉 ).
I did what you suggested and went back to both candidate’s proposals and went through it with a fine tooth comb. Now perhaps I went too far when I said mendacious. They do supply some valuable information, and it’s only in the comparison where I feel it becomes an apples vs. oranges argument. You can’t include approx. $85+ billion in Income Tax credits that Obama supplies, which are effectively tax cuts without comparing them against McCain’s own tax cuts which occur through exemptions and cuts in tax rates. They should either note that – which they don’t – or separate out Obama’s own tax proposals. To include tax policy changes in one evaluation and not the other is not a fair comparison in my opinion.
There’s the further problem of assigning costs to one side, that the other notes also will require spending simply because one side did their homework such as my example of increased troop levels. Taking the costs of the failed immigration bill of 2 years ago, and assigning it to Obama at a cost of $9.8 billion seemed particularily egregious to me while leaving McCain’s own statement regarding “securing the border” stand with 670 miles of fence. McCain’s unexplained pledge to extend SCHIP is of course covered under Obama’s extensive health care plan. Some of this is further exacerbated by the fact that they’re both sitting senators and there is pending legislation that you know either will end up signing into law – Obama gets tagged for $2.67 bil. in pending Veterans’ benefit legislation; McCain $60 mil. Perhaps that’s fair and John doesn’t support the legislation – I doubt you’ll ever hear him say that. There’s also that valuation of McCain’s Health Care Tax Credit which seems woefully low – although on further perusal it is replacing a tax exclusion for employers, so who knows (I’m not willing to do the leg work to find out what that offset is – although by their “rules” the entire cost of the credits should be factored in.)
As I said in my own post Obama does have more spending proposals, I don’t deny that. Nor was I attempting to cover over any missing items in Obama’s own spending proposals when I pointed to gaps in McCain’s proposals. However the 85 non-costed items in Obama’s plan you note are out of a total of 193 overall – and most appear to be of the nickel & dime variety with some possible exceptions (full detail appended below). McCain has no costs on 30 of 45 overall spending proposals – although again most fall into nickel & dimers with the possible exception of Nuclear Energy Development & the SCHIP, increased troop level, and border security etc. items I’ve already mentioned above. They both share some non-costed potential budget busters, namely: Re-Equip for Armed Services & National Guard/Reserve; Home Security Improvements; additional Student Loan provisions. Obama brings up 2 items they’ll both likely end up paying for: Additional Military & Vet Healthcare (particularily mental health) and clearing the VA’s large claims backlog. McCain notes one of his own in the costs of closing down Guantanamo and relocating prisoners to parts unknown.
I’ll restate that I didn’t for an instant consider that you presented their detailed analysis in a bid to be biased. I assumed you hadn’t read it in detail or otherwise noted the discrepancy in what I considered an unfair presentation. What’s needed is someone to incorporate the actual factual parts of both the NTUF and the Tax Policy Center and combine them. I was unable to find a source that did that, so I guess that’s left to the American voter….
Appendix
Obama’s Non-Costed Items
Broadband/Internet supply – 6
Infrastructure & Loans – 15
Regulation/Regulation Upgrades – 30
Job Training – 5
Service Personel/Diplomacy/Fluffing – 15
Redirects & Self-funding – 8
Cost Savings – 3
Sub-totals/no longer operative – 3
Potentially Big Tickets from above: Rural Infrastructure upgrades; Water Conservation; Armed Forces/Nat. Guard Re-Equip.; Military & Vet Health Care & Claim Backlog; Ready Return Tax Forms; National Parks Funding; Student Loans; Homeland Security Upgrades; Nurse Outreach program
McCain’s Non-Costed Items
Free Trade – 2
Infrastructure & Loans – 12
Job Training – 2
Public/Private Partnerships – 2
Regulation/Regulation Upgrades – 7
Diplomacy/Fluffing – 1
Redirects – 1
Cost Savings – 5
Potentially Big Tickets from above: Nuclear Energy Development; Alcohol Fuel Dev.; Flex-Fuel Vehicles; Smart Grid Dev.; Community Health Center expansion; SCHIP expansion; Student Loans; Guantanamo relocations; Homeland Security Upgrades; Troop Level Increases; Reservist Re-Equip; potential savings from eliminating earmarks
Both of course vow to slash programs that aren’t working (I put it under “cost savings”; might rightly belong under fluffing).
Bob Loblaw (6d485c) — 9/22/2008 @ 9:35 pm