Saturday, April 9, 2011

Why We Can't Tax Ourselves Out of the Deficit Problem (and how to listen to political partisans)

During the mid-term election campaign of 1998 I grew very tired of political speech in general and ad hominum attacks in particular. Don't get me wrong, I like a good ad hom as much as anyone but it has to be funny, original or engaging. The vast majority are none of the above.

I couldn't just tune out, part of what I do requires knowing the opportunities presented by legislation while another part is anticipating policy shifts brought about by changes in the zeitgeist; What to do?

It came to me one day when someone said something to the effect "This is just childish".
Political partisans exhibit the mentality and emotionalism of a cranky three-year-old! Why not use that vocabulary?

I tried substituting various words when I heard name calling or an ad hom.
After a few weeks I hit on the one that worked best for me: Poopyhead.

I've been doing it so long that it is automatic, when I hear a supposedly derogatory name being used I can now interject it even if there is no name calling, just demogoguery.
And it works for any political party or coloring!

For example when Senator Schumer was caught on tape telling his fellow Senators how to refer to Tea Party members and their budget ideas: “I always use the word extreme,” Mr. Schumer said. “That is what the caucus instructed me to use this week.” I just substituted Poopyhead.

That New York Times link continues (to my ears):
...“We are urging Mr. Boehner to abandon the extreme Poopyhead right wing,” said Ms. Boxer, urging the House to compromise on the scale of spending cuts and to drop proposed amendments that would deny federal financing for Planned Parenthood and for government agencies like the Environmental Protection Agency.
Mr. Carper continued with the theme, referring to some House Republicans’ “right-wing extremist  Poopyhead friends.” Mr. Cardin decried Mr. Boehner’s giving into “extremes Poopyheads of his party.” Mr. Blumenthal closed by speaking of the “relatively small extreme Poopyhead group of ideologues” who are “an anchor” dragging down the budget negotiation process....
When the Chicago Sun-Times headline read:
"Tea Party extreme social agenda" forcing shutdown: Reid, Durbin, Schumer and Murray
You can guess how much fun it was to read the story.

I bring this up because the source I am about to use is not just on the right side of the spectrum but uses pejoratives against the left that give you, gentle reader, a chance to practice. This article isn't nearly as vociferous as others an American Thinker so you may have to check out some of their other posts.
I'll highlight the actual argument.

From American Thinker:
Yesterday I was in the belly of the beast: Washington D.C.  At a lunch meeting, which included a number of liberal Democrats, the inevitable subject of the runaway spending and debt came up, particularly in light of Paul Ryan issuing a budget which would go a long way toward curing our financial ills.  While I and others extolled the positive economic effects of dramatically reducing government spending, those on the other side refused to come off the mantra of all we have to do is raise  taxes on the rich and that will solve nearly all our problems.

Admittedly, all of those who were in that camp were, you guessed it, lifelong government bureaucrats.  I forcefully made the case that raising taxes on the rich would not generate anywhere near the revenue they thought, or even make a dent in the deficit, and would in fact end up reducing revenue and killing job creation.  The argument fell on deaf ears.  So, having done the research on the issue in the past based on numbers from their fellow bureaucrats in the IRS, I told them I would forward the details.

I am doing so through the American Thinker in a devious attempt to not only get their attention but to ruin their day by forcing them to see and hopefully read the articles and blog entries.

The data is contained on the following IRS site: Section: Tax Generated; subsection; Tax rate and size of Adjusted Gross Income (2008): Table 3.5 (The table is here

The tax year of 2008 was the last to date that the IRS has done this kind of analysis.  In 2008 the highest marginal tax rate of 35% applied to all AGI above $357,700.00.   In that year the total amount of AGI subject to the highest rate was $622.8 Billion.  The government collected in taxes $218.0 Billion (35%).

In 2011 the annual budget deficit will be nearly $1,665.0 Billion and in 2012: $1,100.0 Billion.  If the Liberal Democrats in league with the Socialists, the Unions and the Communists, succeed in raising the highest marginal rate, how much more would Washington D.C. receive, assuming no change in behavior and a general eagerness to pay more?

If the highest rate of 35% were raised by a factor of 20% to 42%, then the additional tax revenue would be $43.5 Billion, not much of a dent in $1,665.0 Billion.  So, let's raise the rate by a factor of 50% to 52.5%; the additional revenue would be $108.9 Billion.  Still nowhere near enough, so let's just tax it at a rate of 100%, bringing in an additional $404.8 Billion.  Unfortunately the country is still $1,260.0 Billion in the hole for the year.

Obviously by confiscating at 100% of all the income of the so-called rich above a predetermined level, there would never again be an incentive to earn above the highest tax rate threshold.  So where will the Left have to turn next: where the money is, the middle class....MORE
Ridicule is man’s most potent weapon. It’s hard to counterattack ridicule, and it infuriates the opposition, which then reacts to your advantage.
-Saul Alinsky
Rules for Radicals
Rule #5
It is so much easier to do my job now.
And even though I once thought, while gazing upon Harry Reid giving a speech, "This guy looks like the pervert uncle of that quiet family with the retarded daughter..." these days I simply say to myself: "Poopyhead".
If the ideologues of all stripes knew they were being laughed at every time they opened their mouths...