He needs the tax cuts to support his drug dependency.

In the 27 hours I spend doing my taxes - CA, NM, and US - the quickest part is handling the tax brackets.

Exactly 0 seconds.

Hmmm - Another talking point Kudlow forgot, was the hypocritical "conservative" idea that the tax rate for capital gains should be less than the rate for income done by doing work ("earned income")? After all, he said just "Collapse it all down into one simple 15 percent tax bracket." That of course contradicts the very definition of "flat taxation." (Issues of indexing for inflation are separate, whatever you may think of how to deal with that.)

(BTW, the Laffer curve is supposed to mean, that there's a taxation percentage level/s that maximizes collections, not "the lower the rate, the higher the collections." Whether you even agree with the former, the latter is just total idiocy. Few slip up enough to say it.)

If cutting tax rates always increases government revenue, as the crackpots tell us, then we should go all the way down to negative tax rates for everybody! Then the govenment would have so much money they could burn stacks of $100 bills to power our electric plants.

Hey, it's working in Iraq, isn't it?

If I may criticize a conservative for once, a pet peeve of mine is those who claim that having numerous tax brackets is what makes our tax code compicated. Give me a break.

There's nothing complicated about looking up the tax in a table or even doing the calculation by hand. The complications in our federal and state tax systems are from so many different areas, such as: earning money in several states, varying definitions of "income", what is or isn't deductible, foreign income, depreciation, special tax gimmicks, record-keeping reqirements, etc., etc.

In short, switching to a single tax bracket wouldn't appreciably simplify the tax system.

Modern conservatives are fiscally incoherent: their calls for tax cuts are invariably met by unspecified or wholly inadequate spending cuts. They should be hammered for this continually, until the distant day that they grow up.

Those spending cuts could be made by reducing the federal bureaucracy.

Or something like that.

Nonsense, go ahead and make the flat tax %15. Take the spending cuts out of the defense budget and let the corporations pony up what they think national security is worth to them. They're paying for protection aren't they? Or they can hire Blackwater. No Iraqi, Afghani or Iranian ever did anything to me. So zero threat requires zero contribution.

Sounds like a job for Porkbusters. How many bridges to nowhere do we need to strip out of the budget to afford cutting taxes for the rich?

Get rid of them. Collapse it all down into one simple 15 percent tax bracket. Then figure out what kind of spending cuts are necessary to finance it.

Fine, but that's only half the story. This wouldn't be honest until you also figure up all the current and future budget obligations, and present a program detailing where to get the necessary revenue. Then let the debate begin.

Give the American people a choice - if you want services, then pay the taxes necessary to finance them. Or if you don't want to pay taxes, then you need to understand you won't be getting much in the way of government services. The debate will never happen, of course, because this is the last thing anybody in Washington wants to discuss. It's easier, and more fun, to discuss the activities of old men in toilet stalls.

The Laffer curve is a new name for things you learn in first year calculus.

First,the extreme value theorem states that if a real-valued function f is continuous in the closed interval [a,b], then f must attain its maximum and minimum value, each at least once.

Second, the local extrema can be found using Fermat's theorem, which states at that every local extremum of the function, the slope of the curve (ie the derivative) is zero.

In the case of the curve describing govt revenues as a function of tax rate, the revenue from taxation is always positive. Trivially, the revenue is zero when the tax rate is zero. At the other end, 100% taxation, real world experience shows that there is no revenue, since (free) people won't work at all if they don't get anything for it.

And so there is a maximum revenue point somewhere in between.

And so it is trivial to prove----rigorously--- that the supply siders insistence that lower tax rates always mean the govt gets increased revenue is false. It depends where you are on the curve.

This is why in the tax battle of ~1992ish, Newt Gingrich, who said that the economy would collapse if Clinton raised taxes some few per cent, was wrong and the Clintonistas (in fact, his treasury guys Rubin and Summers) were right. Bill got his tax hike, govt revenues went up, govt borrowing went down, and that plus a unique time of technological innovation gave us the longest boom we ve had in decades (some say in US history).

There is very little truth in politics, and a lot of truth in math.

ciao

jh

"Anyone who tells you a flat tax won't raise taxes on the middle class is a lying S.O.B, and that's the flat truth." - Mollie Ivins

Yup, the rich don't have enough, and the middle class and below have too much.

That said, 250 bn is not a ton. End the Iraq war - there's 100 bn. Pull back some troops from overseas and lower the size of the military - say 50 bn? Get rid of the prescription drug benefit, raise the Soc Security age to 70, let education become (re-become?) a state obligation, and get rid of some overlapping bureaucracy (4 banking regulators, 16 intelligence agencies, etc.). I'm quite sure we're over 250 bn, and by quite a bit.

In addition, sensible flat tax advocates (i.e., us economists) generally mean "flat after a large exemption". So, for instance, exempt the first 35000 or so for an individual, then x% thereafter. While I'm in favor of progressivity, there's very little rationale for making, say, the tax differences between a guy making 200,000 and a guy making a million progressive, is there?

I'd also get rid of a ton of deductions, and get rid of the (only in America) requirement that citizens overseas pay US income tax. Overseas citizens don't use our roads, schools, etc., so why must they pay tax? We're the only country I know of that does this.

(I think it's a bit of lack of imagination to suggest we can't cut 250 bn, btw; we've run the government on far smaller percentages of income in the past, and many countries successfully run their governments on less income than the US today.)

Those spending cuts could be made by reducing the federal bureaucracy.

I think that the phrasing has to do with cutting fat. With $250 billion to get rid of, the government will become a supermodel. Or maybe a starving Ethiopian.

Some deluded fool had the gall to claim that while the hard working self-made (over 80% of the wealthy started with zero) high income high wealth individuals (i.e., Republicans) generously take care of poor and middle income Americans, that these poor and middle income Americans don't benefit from government budget spending .... Huh!?!?

Government spending is the ultra-progressively enjoyed: public schools, law enforcement, fire protection, medicaid, welfare, public housing, highways, street-cleaning, snow-plowing, etc. All of these the poor and middle income partake of disproportionately.

Unless you are paying $17,500 per person as a family in taxes you are being cared for like little infants in the USA. Stop complaining you envious pathetic scum. The hard working ethical/economic elite are living right, paying for your deliquency, and tolerating your reprobacy.

If there were any realistic conception of social justice among Regressive-Democrats, they'd be marchin monthly on the campuses and in the streets in GRATITUDE PARADES to people on Wall Street, doctors, lawyers, mangagement constultants, investment bankers, entrepreneurs, and other professionals instead of crying that their not being taken care of well enough.

What do you and your family pay in taxes per person? If it's less than $17,500, you are a economic burden. So get real and get grateful.

TOH

Norman does this so much better than The Objective Historian. TOH needs to attend a Jackass Bloviating with Style seminar at The Learning Annex.

The income tax should be a neutral concavity. Rotate counterclockwise and you are more progressive, rotate clockwise and you are more regressive.

Rotate this counterclockwise, more progressive, by small degress until the top 500 richest people spend 15% of their time making government smaller.

TOH needs to attend a Jackass Bloviating with Style seminar at The Learning Annex.

Spittake! That was the comment of the thread. Norm is entertaining. The Obtuse Histrionic is just insipid.

Just curious, but why are we assuming the military budget is sacrosanct?

get rid of the (only in America) requirement that citizens overseas pay US income tax.

Not quite, Cure. America, the Philippines and Australia are the guilty few. In the Philippines, it makes sense, since so much of national income is earned abroad and so little at home, but the others... sheer madness. And it gets worse. I had a US Green Card once. When I left the States to work overseas, they demanded that I keep filing tax returns. No voting rights, no access to services, and they still wanted me to pay tax!
No taxation without representation, eh? barf.

Keep in mind that when people talk about a flat tax, they (usually) assume that a certain portion of income is exempt. Maybe you pay your first tax on your first dollar, maybe you pay it on your 100,001st dollar. Where that breakpoint is set, also makes a large difference.

So, for example, you might have a flat, 75% tax, starting on any income earned above $150,000. (Not sure how much money this actually brings in). Might not be a good idea, but it would be flat.

REGRESSIVE-DEMOCRATS:

I noticed that my comments cannot be contradicted; that is what it means to speak truth-to-power. One must tolerate the insults of ignorant drones.

In our fantasies, the rich exploit the poor in the USA. In reality the poor and middle-income exploit the life-long (i.e., from kindergarden onward) virtuous and hard-working by living like parasites off of their labors and remaining deludedly ungrateful in so doing. The greedy in the USA are those who are being cared for, i.e., 80% of USA citizens, especially those on welfare, who then live ingrate derelict lives, forsaking their duties as students and citizens at least, and too often, narcotics trafficing (buying as well as selling), robbing, raping, maiming, and killing. The true progressive would turn government intevention away from the wealthy who are paying their dues and then some as is; and turn government intervention toward the parasitic poor who are wrecking everything for us all.

Democrats, generally, the rank-and-file and the political office holders, are the USA's parasites; and more, Democrats are the cause of all the pain, misery, poverty, and civic discord in the USA. That is the truth.

TOH

HERE IT IS:

The bottom line is this; the wealthy in the USA with all but a few anecdotal exceptions are rewarded far LESS than they deserve based on what they contribute as citizens. The reality is the utter opposite of every Regressive-Democrat talking point. That is why the Democratic Party is reduced to a rhetorically disguised pay-for-vote Boss Tweedism that undermines the poor in every way. Think about it; Democrats desperation for contributions have wrecked the public schools by catering to unions; their desperation for political control of urban wealth have condemned generation after generation of children to living in urban poverty where every crack-dealer and sexual pervert line the streets waiting for them; their support for illegal immigration has reduced the wage-bargaining power of USA workers to that of Third Worlders; their restriction free cash outlays have paid for all the crack and heroin ghetto drug dealers can provide. Democrats are like a socio-political plague. And they think they are helping poor people and children? Are you insane?

TOH

I noticed that my comments cannot be contradicted

It's quite simple, really - we do not engage the mentally ill in debate. Your grandiosity and inflated sense of self is evidence enough for us to just ignore you, like the greaser-looking dude who walks up and down Westport Road every day, shrieking at traffic and cursing "that sonofabitch."

We smile uncomfortably and ignore you, hoping you will go away.

TOH -- a lot of what generates wealth in this country is not skill and hard work, but right-place, right time. There's a job I had, if I had kept it, I would have been able to cash in gazillions of dollars in stock options starting three years later (and I left, was not fired, stupid me). Certain bits of nanny-state socialism should lead to more economic activity, not less. Just for example, national health insurance -- not only would it cost less, but it would also remove pre-existing-condition-induced job-stickiness (an economic inefficiency), and it would remove some of the risk (working without health insurance) from beginning or working at startups. I know, because I've been there -- two startups I worked at, it was only possible because my wife got health insurance through her job.

If I may criticize a conservative for once

Go ahead, "ex-liberal," it still won't fool anyone into thinking you're an honest commentator.

Irony alert: "ex-liberal" criticizes a conservative for intellectual dishonesty! Pot, meet kettle!

Good Ford, man, you're on a one-man campaign at this site to prove that conservatives don't have good-faith arguments about anything, just an ability to repeat bullshit talking points no matter how often you're corrected. But then, we knew that without you.

I noticed that my comments cannot be contradicted...

TOH, Divine Right was discredited centuries ago, despite the efforts of those like yourself determined to rediscover it in the laws of economics. Folks around here like to have actual discussions about public policy and have no time for laggards like yourself to catch up.

...like the greaser-looking dude who walks up and down Westport Road every day, shrieking at traffic and cursing "that sonofabitch."

I've been wondering what John Ashcroft had been up to the last few years...

jhh: And so it is trivial to prove----rigorously--- that the supply siders insistence that lower tax rates always mean the govt gets increased revenue is false. It depends where you are on the curve.

Yes, but wrong framing of the 'siders. Whatever else their faults, the supply siders were promoting that "necessary" Laffer Curve - that was their whole shtick. The said we were on the decline side (Laffer said, around 28%.) Only some cranks push it to the "always" crap.

TOH: The primary issue isn't the taxes, it's proving that people who "earn" 1000x the average person really produce that much utility value. Can you? If they don't, *they* are cheating us by the margin. of difference. Much of what high-"earners" do is actually waste, just struggling for market share against competitors using advertising and financial dealing - that provides no *net* utility at all.

The neo-cons are laying the ground work for a 'property is all and completely sacrosanct' cycle at this very second. The search is on for people willing to destroy the finances of the United States under such a banner. The Ron Paul 'wave' is neo-con backed. A goal behind the attack on Iraq was to establish a totalitarian US. Pre-emptive attacks by the US on nations across the Earth was to be the basis of a totalitarian US government. Economic collapse stemming from a 'property is all and completely sacrosanct' banner is an attempt to set the stage for a 'unitary Presidency', who deals with the economic crisis for the 'benefit' of the nation. The fact that the proposal is an economic disaster is irrelevant to the neo-cons. Clearly stressing individual rights is a priority as such undercuts the Ron Paul 'wave'. The space cadet economics of Ron Paul are no large vote draw but individual rights in the United States are always a vote draw. Indvidual rights include rights for human fetuses. The Christian fundamentalists had a point on this issue and that was the only point the Christian fundamentalist had but this point was a large point.

Kudlow wants us to believe that nondefense Federal purchases has exploded. As a share of GDP, it's a mere two and half percent of GDP and this share has marginally gone up. But Kudlow picks a few small programs to hype how much they have risen. Stupidity OR mendacity - with Kudlow you never know. Maybe OR should be AND.

The problem with existent progressive tax structure is when it is dismantled it will result in regressive income distribution. While flat taxers for most part also believe in the myth of absolute supremacy of the market, what regressing progressive tax structure does is to redistribute income without market mechanism, as tax table changes are political decisions and not market driven. So whatever income distribution that was in balance by "market" forces prior to change in tax structure breaks down and results in manna from heaven to the higher income brackets. This is the history of recent changes in income distribution in the west.

Between 2001 and 2006, the Republicans in congress conclusively debunked the starve-the-beast theory. Rather than leading to spending cuts, the Bush tax cuts enabled higher spending levels, because they created the illusion that we could run up charges on our credit card and never have to pay the bill.

My friends in the Republican Party understandably like to cut taxes, and the ideal tax rate would be zero, but, alas, we don't live in a utopia. The role of government should be deciding which taxes are more harmful to the economy, and which taxes are less harmful, and to go with the less harmful ones.

For example, the Deficit Tax (the devaluation of the dollar, the dependence on foreign capital), is far more damaging than even the loathsome income tax, so, the Bush tax cuts for the upper one percent should be repealed so we can balance the budget.

Another example would be capital gains taxes. Capital gains taxes are far more harmful than the Estate Tax; it is far more harmful to tax those who make their money from investments than those that inherit it. We should bring back the Estate Tax, even raise it, so we can cut capital gains taxes.

Another example would have to do with the Employment Tax. Traditionally called the payroll tax, the Employment Tax taxes you for getting a job, not a good message we want to send in these United States. Instead of taxing people for getting jobs, why not put traditional patriotic tariffs on foreign imports? Heck, a lot of those foreigners are already launching a trade war against the American people and taxing our goods. Let's tax their goods, a 15% tariff on all foreign imports, and use the money saved to cut the Employment Tax down as far as possible, maybe even eliminate it. That way, all Americans, including the poorest Americans, will have more money in their pockets, so it won't matter as much if foreign goods cost more. And because American goods will be able to compete, that will be more money going toward the manufacturing sector that has often provided the best jobs many working class Americans ever had.

It's not about No-Taxes versus Taxes. A sad truth is that there will always be Taxes, just as there will always be death. So it's about the Worst Taxes versus the Less Harmful Taxes.

Larry isn't completely off base. If all you need is $250 billion you could find it quite easily.

Just eliminate all the corporate welfare created by the GOP. Eliminate the tax breaks bought with bribes to DeLay, Doolittle, Ney and the rest of the Abramoff gang. Kill the farm bil subsidies for Archer Daniel Midlands and the rest. Kill the energy bill subsidies for big oil.

On the other hand the money saved would only compensate for the unfunded tax cuts that Kudlow and the super-rich have already received.

The bottom line is this; the wealthy in the USA with all but a few anecdotal exceptions are rewarded far LESS than they deserve based on what they contribute as citizens.

Most wealth is either an idea protected by the government or physical assets also protected by the government.

What is the Copyright Office worth to Bill Gates? What is the SEC worth to Warren Buffet? What is the Registry of Deeds worth to Donald Trump?

the ideal tax rate would be zero

I love it when brian, everyone's favorite faux-reasonable concern troll, lets his mask slip and reveals himself as the wingnut he is.

I'm not sure why Larry talked about spending cuts. In his universe tax cuts dramatically increase government revenue, so we should be able to have large spending increases after his proposed tax cuts.

Hell, we could fund universal, free health care for everybody just by cutting taxes. It must be great to be a supply sider.

My proposal is to constitute a Tax Truth Court. Any person who makes statements about taxes would be hauled before this court. If your statement was true and novel, you would get a $50 tax credit.

If your statement was false, your tax rate would be 75 % for 3 years.

Kevin, aren't you the same one who has been pushing universal health care - something which would ADD to the deficit and grow larger every year

Dude, you're already paying for health care. Adminstrative overhead for private insurance is something like 20%; adminstrative overhead for medicare is something like 2%. If we eliminate your insurance payments and raise your taxes by 82% of what you formerly paid for insurance, are you not better off?

Somebody up there was venting about income tax on Americans overseas and had some basic facts wrong. For one thing, U.S. citizens abroad are most certainly allowed to vote - ever hear of absentee ballots? Also, not all income is taxed. I believe there is a straight credit for any tax paid to a foreign government plus an exemption - it used to be $75,000 and may have gone up - for the income after that. So the amount actually paid by most expats is small and only the highest earners pay anything really significant.

The theory behind it is that we benefit from our U.S. citizenship and U.S. miltary defense even when we are living abroad, and that stikes me as eminently resonable, particularly since expats pay significantly less to Uncle Sam than residents of the U.S. do.

State income taxes are another matter, but the policies of the individual states vary widely on this. Most long-term expats manage to establish residence in a state with no or low tax.

Interesting how TOH reduces citizenship to a business deal in which the only thing that matters is the return rich folks get on their "investment" in the USA.

So if returns on US citizenship are so crappy, why don't rich people all move to some low tax paradise like El Salvador?

(Of course, they'll have to live in heavy-guarded compounds where it's unsafe to walk down the street with your kids to get ice cream.)

The truth of the matter is, even if the rich don't directly use or need amentities that are publically supported they benefit disproportionately from the sanctity of contract, the rule of law, civil courts, the criminal justice system, and everything else that ensures they get to keep and enjoy their money.

US citizenship is so much more than a business deal and I loathe the rightwing for reducing it to such terms.

I used to think TOH was not a parody.

Not anymore.

Virginia: I didn't say US citizens are not allowed to vote. I saiud green card holders are not allowed to vote, and yet the IRS thinks that we should pay tax even if we don't live in the US.
And whatever "theory" lies behind the decision to tax no residents, the US and Australia are the only first world countries that do it.

I noticed that my comments cannot be contradicted

That's because they are baseless, factless and thus, worthless.

TOH is brilliant! As a parody of a conservative moron, he's up there with Colbert, maybe Colbert with more balls.

Larry Kudlow is a moron. He must be hoping that Steve "Gold Standard" Forbes makes a late entry into the 2008 race.

Larry must be hitting the nose candy again.

....What do you and your family pay in taxes per person? If it's less than $17,500, you are a economic burden....The Objective Historian on at 7:59 PM

...Wolff focuses on wealth rather than income-on assets rather than cash flow. This has some advantages over annual income as an indicator of a family's economic position, especially among the rich. Someone with a very high-income may be having an unusually good year, while it is not unheard of for wealthy families to have negative income if they make a bad investment; in each case their assets will be a better clue to where they really fit into the rankings. More important, however, wealth is in some ways a better indicator than income data of what is happening to the very successful-simply because it is so narrowly held: in 1989, the top 1 percent of families owned 39% of the wealth but received only ( a still impressive) 16% of the income....
[This is a Krugman article that is worth a read}

So why doesn't the left go on the offensive and start to beat the drum (kevin?) about the complexities of the tax code and instead of the moronic recitation of Tax brackets, they start talking about all the different way income is defined?

The speech goes like this:

Why is it fair that the money someone else makes gets taxed at a lower rate then the money you make? Why do we have earned income, unearned income, farm income, capital gains income? Why can't income just be income?

You can do the same thing with deductions. The speech writes itself.

and get rid of the (only in America) requirement that citizens overseas pay US income tax. Posted by: cure

U.S. citizens living and working abroad don't pay U.S. income taxes if they are employed locally and paying local income taxes. They only pay U.S. income taxes if their overseas income is above a certain level. I think we have this tax treaty with pretty much most of the industrialized world.

If we want to kill three income tax brackets (I'm all for simplification), how about we kill the 15%, 25%, and 28% brackets and then figure out at what level the 33% bracket needs to begin to keep the entire system revenue neutral.

Of course, killing the preferential treatment of income-not-earned-by-working over income-earned-by-working is a more important consolidation, but I'm all for revenue neutral consolidation of tax brackets that result in middle-class tax cuts.

If America is the only country to tax overseas income, maybe that's because there is something uniquely good and advantageous about being an American.

Why are conservatives, who are always insist that we unconditionally sing about the greatness of America, so reluctant to pay their fair share of the freight for this great country?

every time there has ever been a tax cut, the economy tanked. It's proven history and fact. I learned it in school. The last six years are a startling example. Doesn't the right read the papers, it was Hooverville 3 years ago, it's like Uganda here today.

jhh: And so it is trivial to prove----rigorously--- that the supply siders insistence that lower tax rates always mean the govt gets increased revenue is false. It depends where you are on the curve.

Yes, but wrong framing of the 'siders. Whatever else their faults, the supply siders were promoting that "necessary" Laffer Curve - that was their whole shtick. The said we were on the decline side (Laffer said, around 28%.) Only some cranks push it to the "always" crap.
***

By "cranks" you mean the current chief executive and the leading Republican contenders for the top of the ticket?

BARTLETT (4/6/07): The original supply-siders suggested that some tax cuts, under very special circumstances, might actually raise federal revenues...

But today it is common to hear tax cutters claim, implausibly, that all tax cuts raise revenue. Last year, President Bush said, ''You cut taxes and the tax revenues increase.'' Senator John McCain told National Review magazine last month that ''tax cuts, starting with Kennedy, as we all know, increase revenues.'' Last week, Steve Forbes endorsed Rudolph Giuliani for the White House, saying, ''He's seen the results of supply-side economics firsthand—higher revenues from lower taxes.�

YGLESIAS (4/3/07): In case Rudy Giuliani's penchant for cross-dressing had you doubting his conservative bona fides, doubt no more. "I regard myself as a supply-sider for sure," he told Larry Kudlow on March 27. And just in case you weren't clear that by "supply-sider" Giuliani meant "know-nothing fool and liar," he clarified: "[I] watched Ronald Reagan do it and learned it, saw it work. Taxes get reduced, more revenue comes in."

Please, please, remember this:

The rich don't want to pay any taxes, period.

Nor do they want to fight in any wars.

Now, tell me why we need these "sunshine patriots and summer soldiers?

One afternoon, I was in the backyard hanging the laundry when an old, tired-looking dog wandered into the yard. I could tell from his collar and well-fed belly that he had a home. But when I walked into the house, he followed me, sauntered down the hall and fell asleep in a corner. An hour later, he went to the door, and I let him out. The next day he was back. He resumed his position in the hallway and slept for an hour.
This continued for several weeks. Curious, I pinned a note to his collar: "Every afternoon your dog comes to my house for a nap. "
The next day he arrived with a different note pinned to his collar: "He lives in a home with ten children - he's trying to catch up on his sleep."

I cried from laughter
Sorry, if not left a message on Rules.