Here we go: Top WH advisor says it’s time to start thinking about a VAT
posted at 10:04 pm on April 6, 2010 by Allahpundit
We all know it’s coming, but I’m reasonably sure Volcker missed a memo instructing advisors not, repeat not, to mention this publicly until, oh, say, the day after Election Day 2012.
As it is, look for Gibbsy’s spin tomorrow to be, “B-b-but he was Reagan’s Fed chairman!”
Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax “was not as toxic an idea” as it has been in the past and also said a carbon or other energy-related tax may become necessary.
Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. “If at the end of the day we need to raise taxes, we should raise taxes,” he said.
Krauthammer’s column on the VAT came out a few weeks ago, but if you missed it at the time, now’s your chance to catch up. Perfection:
Obama set out to be a consequential president, on the order of Ronald Reagan. With the VAT, Obama’s triumph will be complete. He will have succeeded in reversing Reaganism. Liberals have long complained that Reagan’s strategy was to starve the (governmental) beast in order to shrink it: First, cut taxes — then ultimately you have to reduce government spending.
Obama’s strategy is exactly the opposite: Expand the beast, and then feed it. Spend first — which then forces taxation. Now that, with the institution of universal health care, we are becoming the full entitlement state, the beast will have to be fed.
Precisely. The One’s perverse insight was that a giant federal expansion of health-care benefits had to be passed before any major entitlement reform could happen. Had he tackled the latter problem first, declaring that America had reached a moment of fiscal emergency and demanding that both parties address the crisis, he would have done his country a world of good but in the process created two problems for himself. First, the political fallout to his party from cutting entitlements likely would have been devastating, which would have wrecked any chance at passing health-care reform aside from a modest GOP bill. And second, even if the Democrats survived the electoral backlash, they’d have a hard time trying to sell the idea of a brand new entitlement after the country had sacrificed so much to get its fiscal house in order. No, the only way to get O-Care done was to add it to the entitlement basket first and then wait for dependency to work its magic so that, when the crisis finally hits full force, it’s already a fact of life. That was a fantastically reckless thing to do but he wanted his agenda passed at all costs. And I do mean “all costs.”
I’ll leave you with James Pethokoukis’s piece this morning gaming out a way that the Democrats might try to sell the VAT to the public. Essentially, it’d have to be the fiscal equivalent of comprehensive immigration reform: If the public’s going to be asked to accept the bitter in the form of amnesty or new taxes, it had better get the sweet of border enforcement or fiscal responsibility in the same deal.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « Previous 1 2 3 Next »
I know. I was listening to some of Candidate Obama speeches recently and he told everyone exactly what he would do. Obviously 52% of the population didn’t understand what he meant or didn’t care or agreed with him. And here we are on the brink of irreparable damage to our country.
conservative pilgrim on April 6, 2010 at 10:51 PM
Going to be hard to make that commercial! 19, 19, $19 dollar foot-long
bluemarlin on April 6, 2010 at 10:52 PM
It’s called supply side economics, and it has never worked or proven itself in practical application. It’s disturbing to see how many people believe in ‘voodoo economics’. Do you understand that Bush pursued a low tax policy despite strong objections from Paul O’Neill in Treasury and Alan Greenspan- with disastrous consequences? Under Bush, you didn’t see the emergence of a miracle economy driven by tax cuts, you witnessed the addition of $4 trillion in federal debt and the creation of a huge structural deficit. The Bush economy was driven by a housing bubble- and when that vanished, there was little to fill its place.
When this country had both strong economic growth and a budget surplus, under Clinton, taxes were significantly higher. At some point, you have to face reality and the facts over the last 20 years are more than clear.
Returning to supply side economics would be foolish, yet it appears to be the religion of many in the Tea Party.
bayam on April 6, 2010 at 10:52 PM
This is actually true.
Just go across the border to Canada where you can still watch USA’s “5 Dollar Foot Long” Commercials.
Canada has GST and PST (their versions of the VAT) on top of of everything so it comes out to around $9 even though the currency is even in exchange right now.
GET READY FOR THIS CRAP!
tetriskid on April 6, 2010 at 10:52 PM
This might be an opportune time. The Dems are desperate for revenue, even over policy. A flat tax or a sales tax/VAT would both give considerable more revenue. Will they be willing to trade their progressive income tax for a flat tax or VAT to secure the higher revenues?
DFCtomm on April 6, 2010 at 10:53 PM
One might as well expect rivers to run backwards as any man born free to be contented living under such oppression.
Hinmahtooyahlatkek on April 6, 2010 at 10:53 PM
AMEN!
gophergirl on April 6, 2010 at 10:54 PM
All hail. The WH staff is on this thread.
Key West Reader on April 6, 2010 at 10:55 PM
… and another $1,000 for having lint in his pocket that wasn’t government approved.
Can’t pay you say…?
Well, we do have the new forced labor camp… Get in the car!
Seven Percent Solution on April 6, 2010 at 10:55 PM
Well as they say, “It’s all relative”.
It sure beats the Hell out of demand side Marxism.
MB4 on April 6, 2010 at 10:56 PM
And the moral of that story is – the more Obama demands, the less supply you have.
Cheshire Cat on April 6, 2010 at 10:58 PM
The lefties love taxes, love the government. They have a simple approach.
Let’s say you have 8-10 percent unemployment and 2 percent GDP growth. Let’s say you have “children” living at home until the age of 30. Let’s say you have strong public unions that can stop transportation, health care or anything else.
This is many countries in Europe….but that’s ok if you are a lefty (and/or a slacker). You get healthcare, maybe a stipend from the state…and if ever do get a job you get a lot of time off. They see this as a wonderful world.
Don’t worry, be happy.
Like I say, simple minded.
r keller on April 6, 2010 at 10:59 PM
Dear sir, you underestimate the power of Free American Citizens. I respect your culture deeply and was married to a Weeauw Indian years ago. His grandmother was an Indian Princess. They lived in the territory that is now known as Indiana. If you are a warrior then stand and fight. I’ve never known an American Indian to back down from any threat be it a random thug trying to jive, or a random thug trying to lie cheat or rob. Stand. Now.
What advice is your dad giving you? Whatever it is, please follow it. Your father’s voice is the voice of Wisdom and it should be cherished and followed. Always.
We Will Be Fine.
Key West Reader on April 6, 2010 at 10:59 PM
Yeah. I thought about a reply to him, then my troll shock collar went off and stopped me. My wife rigged it up, she has proved it is actually better for my blood pressure, well she thinks she has. I think she just likes to shock me sometimes. Seriously though, from his posts, not worth the effort.
bluemarlin on April 6, 2010 at 10:59 PM
For perspective, look back at the Clinton budget vote of 1993 that was viscously criticized by Republicans at the time. It raised taxes and cut spending, leading many Republicans to predict a massive recession. It was supported by Alan Greenspan, most of Wall Street, and helped fuel an extended period of growth that led to a budget surplus.
Given the massive federal debt, you can’t continue robbing from our kids through unrealistically low taxes. The country needs policies that restore a sound budget.
bayam on April 6, 2010 at 11:00 PM
Which is why many of us have believed for decades that Volcker is an idiot.
Jaibones on April 6, 2010 at 11:01 PM
Oh my…!
Seven Percent Solution on April 6, 2010 at 11:02 PM
bluemarlin on April 6, 2010 at 11:03 PM
Anyone who doesn’t use right wing talking points is on the left? If you truly believe in capitalism, then you should pay more respect to the greatest capitalist of all, Warren Buffet.
Warren Buffet has said that at all of his companies (I think he owns a few), decisions to expand are based on consumer demand, not tax rates. In other words, supply side economics is nonsense. Then again, perhaps you’re more of an ‘armchair capitalist’ who doesn’t understand how the system actually works or thinks you know more than Buffet.
bayam on April 6, 2010 at 11:04 PM
It’s human nature to resist admitting that you were wrong. Let’s give those 52% a chance to admit it without rubbing salt in the wounds. They’re going to come around, especially after this most recent Obamateurism of unilaterally disarming. Watch.
Key West Reader on April 6, 2010 at 11:05 PM
This is why above all I listen to Krauthammer. He called this one alright. He uses this psychiatric skills to get inside of Obama and knows how he thinks. And we definately need that type of insight.
Texas Gal on April 6, 2010 at 11:08 PM
No, I’m just saying we need to lower federal spending by 20% or more and increase taxes on the top income brackets to even begin to talk about balancing the budget.
It’s easy to talk about the wonders of low taxes, much harder to be fiscally responsible.
bayam on April 6, 2010 at 11:08 PM
The tax question aside, if we can’t bring forth the political will to control spending, we’ll never have a sound budget. The political class (both sides; I’m looking at you too, W) is completely lacking in self-control. The public needs an offer of proof that the increased government revenues aren’t just going to be p*ssed away or they’ll simply never accept something as far-reaching as a VAT.
And don’t tell me Obamacare is a deficit-reducer; I’m a professional economist and I know better.
DrSteve on April 6, 2010 at 11:13 PM
Dear White House Reader:
I am a Capitalist. I was raised on the teet of welfare back in the day when we had to shop with actual food stamps. Back in the day when cashiers would call for the manager to come to the front of the store to verify your food stamps were real.
That is what taught me what I never wanted to be. I couldn’t help what my parents had to do, but I knew to succed that I would have to work for what I wanted. I had to work to NOT be embarrassed in front of my peers as a young woman.
I am now a successful business owner. I have employed many over the past several years. I pay them on 1099′s. They are responsible for paying their own taxes, understanding what they can write off as their own small business people. They are responsible for their success or their failure. Many have employed their own children in helping them to fulfill their duties in working for themselves.
I won’t participate in funding an entitlement class that no longer has an effective argument for entitlement. Either you work, or you sit on your azz and collect your butter and cheese from the gubmint.
As for me and mine? We choose to work for ourselves and our children, and we choose not to work to fund those who got stuck in the system of “I’m entitled” to get something for nothing. So, suck it.
Key West Reader on April 6, 2010 at 11:14 PM
Increase taxes on the top income brackets when they already pay most of taxes? We have just under half the population paying no taxes. Everyone should have skin in the game. Your colors are showing.
Aviator on April 6, 2010 at 11:15 PM
Fixed.
PS, like Tom_Shipley, you were a lot funnier at CQ.
Del Dolemonte on April 6, 2010 at 11:15 PM
It’s always taxes with you guys, never spending. As a parent of two sons close to (hopefully) entering the workforce, your blockheadedness regarding increasing taxes without grasping how you correspondingly rob opportunity from our kids is infuriating.
churchill995 on April 6, 2010 at 11:16 PM
You are correct about cutting spending, good for you. Raising taxes on the job makers is not the way to increase revenue. I believe it has been pointed out to you that lower taxes increases revenue to the Treasury everytime. Quit trying to sound sincere with one honest point , that you probably don`t really mean and then follow with raising taxes on upper income. The upper income already pays 70% of the taxes. This has become quite the cliche lately but it is still true, I have never been hired by a poor person. Poor people do not create jobs and the gov`t does not create anything at all it only takes.
bluemarlin on April 6, 2010 at 11:16 PM
Some of you think an Indian is like a wild animal. This is a great mistake. When an Indian fights, he only shoots to kill.
Hinmahtooyahlatkek on April 6, 2010 at 11:16 PM
Whatever happened to being “personally responsible”?
Dare you to answer that one.
Key West Reader on April 6, 2010 at 11:17 PM
I agree, no one has the guts to seriously cut spending. Taking the knife to entitlement programs is still too much for spineless politicians to handle.
bayam on April 6, 2010 at 11:18 PM
Difference between economics/macroecomomics and finance. Buffet does not drive the economy, just enjoys fruits of its labor. To say that supply side economics is “nonsence” is foolish, empirical data does not support such a statement.
runner on April 6, 2010 at 11:19 PM
I cannot believe that anyone can be so ignorant. This borders on surreal.
BTW, Buffet may say a thing but that doesn’t make it true nor does it means that he himself follows it. Truth be told, Buffet would be a blue collar laborer if we were still on the gold standard.
What that means is that he made his fortune on the spread between inflation rates and interest rates. In other words, he traded debt, just like every other fat cat who goes around telling everybody else why they’re lower class.
I have no problem with these robber barons making profit. What I have a problem with is the robber barons using government to protect them from anybody else competing with them. That, and their disgusting habit of running away from their bad decisions by making taxpayers pay for them.
The whores in Congress and the whores on Wall Street are the same. Just depends on the date.
platypus on April 6, 2010 at 11:19 PM
Nope. I was married to an American Indian. Wild Animal in bed yes, but personally responsible for family, deeply devoted to mother and father and siblings, and above all, Honorable and Proud of his skills, heritage and his honor.
Key West Reader on April 6, 2010 at 11:19 PM
Good post, cannot agree more!
bluemarlin on April 6, 2010 at 11:19 PM
They have the smallest minds and the selfishest souls and the cowardliest hearts that God makes.
- Mark Twain
MB4 on April 6, 2010 at 11:21 PM
Read this:
http://www.amazon.com/Seven-Fat-Years-How-Again/dp/002874022X
visions on April 6, 2010 at 11:23 PM
I think now may be a perfect opportunity. The beast is hungry, but is it hungry enough to give up one of it’s prized possessions, the progressive income tax? It may be, so it should at least be investigated. Hell, we can even offer a sweet introductory rate to get the Pavlovian juices flowing, we can always change it later, once the legislation is in place. Cutting taxes is the one thing on which you can count on the GOP. It would be a bold move. Here is a video by Dan Mitchell of the CATO institute discussing VAT/Sales tax/flat tax.
DFCtomm on April 6, 2010 at 11:24 PM
See my earlier post about supply side economics. It’s a fun theory to believe in and the ‘increased revenue’ metric you bring up is statistically correct but not a complete assessment of the consequences. The initial bump in revenue has a longer-term effect of higher deficits. This occurred under Reagan and under Bush (and keep in mind that Bush didn’t spur real economic growth by cutting taxes, those years witnessed a major bubble).
There’s a reason why Warren Buffet, Bill Gates, and others warn against supply side policies. Massive federal debt and huge deficits kill the economy over the long term. It’s hard to face reality and pay taxes that balance the budget, but over time we’re all wealthier for it.
bayam on April 6, 2010 at 11:24 PM
No one likes to address that particular question from that side! I bring it up at work all the time and I get crickets from the young liberals.
bluemarlin on April 6, 2010 at 11:25 PM
This is for the Shite House Readers in the WH. But more importantly for my Fellow Patriots. STAND.
Key West Reader on April 6, 2010 at 11:25 PM
All Congresses and Parliaments have a kindly feeling for idiots, and a compassion for them, on account of personal experience and heredity.
- Mark Twain
MB4 on April 6, 2010 at 11:26 PM
It’s the old economic adage: if you have to spend other people’s money on a list of essentials and luxuries, spend it on the luxuries first, because you have to buy the essentials in any case.
Ozwitch on April 6, 2010 at 11:28 PM
If everybody in Obama’s administration just minded their own business, the world would go around a great deal faster than it does.
Cheshire Cat on April 6, 2010 at 11:28 PM
It’s time to get rid of unconstitutional federal government interference. Social Security and Medicare need to be phased out starting now and future Ponzi schemes outlawed. There are no monetary entitlements in the Constitution.
Cindy Munford on April 6, 2010 at 11:28 PM
I think this qualifies as the ” a little knowledge is dangerous” situation. You speak well on cutting spending and entitlements and then you derail. I do not really believe that you would cut either of the two but I also only know you from your posts tonight. My gut feelings have been right on lately.
bluemarlin on April 6, 2010 at 11:29 PM
Just how much damn GDP in Taxes do we need? And why are we flushing incentives to hire down the toilet? Good Lord, we can afford a safety net, and modest regulation to protect the citizenry in critical matters is warranted, but we are waayyyy beyond that, and we want to add to it and diminish prosperity in the process?? Good Grief.
churchill995 on April 6, 2010 at 11:30 PM
There are tax schemes that will render more revenue with lower rates than the progressive income tax. Watch the video to which I posted a link.
DFCtomm on April 6, 2010 at 11:32 PM
Baby, Generation X is raised on entitlements. We can save the Union through communication, and raising the youngest to know and understand how the theft of personal dignity was perpetrated by the party in power. If you tell someone “you’re ugly”, “you’re poor”, “you’re stupid”, “you’ll never be anything” to a person long enough, they’ll belive it.
It’s time for everyone to call these people out and ask, “WHO ARE YOU”? I guarantee you that every American has pride in their achievements. The Democrats supress dreams of many in their quest for … God knows what.
All I want, is to stand shoulder to shoulder with Americans and declare that we are American. We are not Venezuela. We are not dependent. We are Free. We are Equal. We can do Anything we set our minds to.
Barack Obama will kill my white female dream. If he has his way. Which, he will not. Trust me on that, cause I’m one mean azz biyatch when it comes to American Freedom and Exceptionalism. Our Children will be successful. That is my duty. That is my mission. That is my honor.
Key West Reader on April 6, 2010 at 11:32 PM
You really are as stupid as I thought you might be. What does it feel like to look in the mirror and see the dumbest dumba$$ in the world looking back at you?
The reason these rich dudes warn against supply side economics is because it cuts into their ability to accumulate unearned income.
Try to cut back on the hookah.
platypus on April 6, 2010 at 11:32 PM
Show me empirical data that demonstrate how the tax policies instigated by Robert Rubin and Treasury under Clinton, with the support of Greenspan and other leading experts, were in any way inferior to earlier or more recent policies?
Yes, you had decent economic growth under Reagan, but during the Reagan-Bush years the national debt grew significantly. Clinton’s team reversed that trend, while ushering in a period of extended growth. Or are these charts inaccurate?
http://en.wikipedia.org/wiki/File:USDebt.png
It’s one thing to grow the economy while growing the deficit. True, if you spend the credit card, you can grow anything. The 1990′s economy was far more impressive.
bayam on April 6, 2010 at 11:33 PM
How cheerfully the Obama Regime seems to grin
How neatly it spreads it’s claws
And welcomes little fishes in
With gently smiling jaws!
Cheshire Cat on April 6, 2010 at 11:34 PM
entitlements brah
gotta fix that.
however no one is willing to sacrifice.
the average 16 year old today is going to live to be heinously old
we have to raise the retirement age for some people.
blatantblue on April 6, 2010 at 11:35 PM
Kind of pathetic response. So Warren Buffet wants to pay a higher capital gains tax because it makes him richer? Good point.
bayam on April 6, 2010 at 11:36 PM
A conservative recognizing that the rich are playing the rest of us for suckers?! Somebody call Guinness…
Dark-Star on April 6, 2010 at 11:36 PM
This time the cat may get caught, if the GOP were to play their cards right. They should at least bate the trap and see if there is any interest.
DFCtomm on April 6, 2010 at 11:36 PM
And then we smell the rabid dog. And recoil.
Key West Reader on April 6, 2010 at 11:36 PM
Here’s some bait for the WH phisch.
I have a whole lotta dirt on Alan Grayson. He was planted in 2006. Here, fishy fishy, here fishy fishy. Bite me.
Key West Reader on April 6, 2010 at 11:38 PM
While visiting my relations in the UK a few years ago they were going on about the VAT and the local councils and such. We were only to use power at a certain time and in my mind it was odd. I never really got the hang of it then, but the light is starting to shine now. It’s all about control. Control the people by limiting their power. Or maybe I’m just another whackjob conspiracy nut.
kellyjane on April 6, 2010 at 11:40 PM
Thank you for putting it into words before me!
VibrioCocci on April 6, 2010 at 11:41 PM
Warren Buffett is an opportunist who chooses sides that will advance his agenda best. The notion that consumer demand will expand HIS profits is great as long as consumers have expendable cash to expand HIS business. When the general population, i.e., middle class, has no real expendable or discretionary income, then his business fails. When the public is taxed beyond their means, they will reserve any and all non-essential income to savings or a mattress. In the case of a VAT, discretionary spending is held to a minimum. Warren Buffett’s premise may have been correct in the past, but the current state of the economy and the future economy is much more uncertain and unpredictable. What does Warren Buffett really know, did he predict the financial meltdown? The progressives have demagogued the regressive tax issue for nearly a century, and they are now going to say that maybe they have been wrong????? I don’t think it will fly.
belad on April 6, 2010 at 11:41 PM
How about we cut spending 30% and leave taxes alone?
Crawford on April 6, 2010 at 11:43 PM
Democrats please, please, please take this position in November. : ))
Taxed Enough Already.
Moving water from one end of the pool to the other doesn’t work, neither have your bailouts, stimulus, or nationalization of health care and the auto industry.
Your party is more screwed up than the Republicans and that IS saying something.
Angry Dumbo on April 6, 2010 at 11:44 PM
Bayam, for perspective, Clinton raised taxes to pay down the national debt. Not to enact programs that are little more than massive voter drives disguised as handouts.
byepartisan on April 6, 2010 at 11:45 PM
How come is it that I NEVER hear the left talk about reducing spending or cutting fraud laden programs from the budget? Its always increase taxes to pay for more wasteful spending?????
belad on April 6, 2010 at 11:45 PM
What does Warren Buffett really know, did he predict the financial meltdown?
Yes he did, although he didn’t time it. Buffet contended that the wide dispersion of debt in the financial system, through derivatives, didn’t increase risk but actually compounded it- derivatives were weapons of financial mass destruction. Next to no one believed him until the economic crisis.
Since Buffet has specifically called for higher taxes on capital gains and people who earn over $1 mil per year, I’m not so sure that he’s targeting the little guy.
bayam on April 6, 2010 at 11:48 PM
How doth the Obama crocodile
Spin it’s deceiving tale
And test the nation with attempted guile
On such a grand scale!
Cheshire Cat on April 6, 2010 at 11:48 PM
I agree with everything but gen X. If we can replace that with millenials, 100% in agreement. I am a solid GEN X at 40 and millenials are the 23 to 30 maybe. My company has actually had parents show up with these kids for interviews and also call to complain about a poor performance reviews. In a training class they tell us we must change for them, keep them entertained, and even a millenial (probably like bayam) mentioned it would be good if we wrote a letter to their parents telling them how good their child is doing. The you can do and be anything you want and you are never wrong group is that group to me. They also have/had now, zero problems with jumping jobs 2 times a year. I deal with it daily, it is quite disconcerting.
bluemarlin on April 6, 2010 at 11:50 PM
I don’t have a problem with that, but I don’t think it’s possible. The cost of fighting wars abroad and the bloated ‘office of homeland security’ (if you believe that) pretty much rule that out.
bayam on April 6, 2010 at 11:50 PM
Ahh yes, the glorious rapist president, the right hand of god for the millennium generation. If the administration ushered in a period of extended growth, then what is that drop off I see about 1995?
Also you lecture about political courage to solve the budget and your answer is to use the police powers of government to confiscate through threat of detention one group’s livelihood to fund itself. Wow, you are the pinnacle of bravery.
ClassicCon on April 6, 2010 at 11:51 PM
All the reasonably smart liberals i know stopped complaining about Bush’s deficits.
Bayam isn’t fit to hang with them just yet. Hopefully he’ll read the news.
Chuck Schick on April 6, 2010 at 11:51 PM
You’re right, but my point was that sometimes the only way you can balance the budget is to raise taxes. And if done the right way, it will help the economy over the long term.
bayam on April 6, 2010 at 11:52 PM
Liberals love spending and taxing because it makes more constituents dependent upon government. This increases their voting base.
carbon_footprint on April 6, 2010 at 11:52 PM
No that wasn’t your point. Obama’s taxes are not intended to balance the budget.
You were wrong, and now trying to backpedal.
byepartisan on April 6, 2010 at 11:53 PM
Warren Buffett is correct about the derivatives, but has the derivatives been reduced or disappeared? No, there has been very little reduction in the outstanding derivatives.
BTW, Warren Buffett doesn’t give a crap about taxes on income because he doesn’t technically have income. All of those ‘evil super rich’ have all their investments in ‘TAX-FREE’ instruments and don’t worry about it. That’s why he could tout that his secretary paid more ‘INCOME TAX’ than he did.
belad on April 6, 2010 at 11:54 PM
LSM – Of course you are, please report to the nearest obamaglo refill station.
The rest of us – winner, winner, chicken dinner
bluemarlin on April 6, 2010 at 11:54 PM
Whatever. I never defended Obama’s spending. I think some deficit spending is needed to control the recession but I never defended raising taxes to do anything other than balance the budget.
bayam on April 6, 2010 at 11:55 PM
VAT=Is the Death Knell of the US Economy!
canopfor on April 6, 2010 at 11:56 PM
bayam,
So if tax rates are higher and consumers have less disposable income what can one reasonably expect will happen to consumer demand?
It will decrease, right? Barring a dramatic expansion of cheap credit, consumer demand has to.
So how then will this reduced consumer demand impact Warren Buffett (or anyone else’s) decision to “expand” their business?
Think about that for a second and get back to me.
Mike Honcho on April 6, 2010 at 11:58 PM
I’m kind of curious to know what you think abut “social engineering” and the effect the Community Reinvestment Act had on our economy…
Seven Percent Solution on April 6, 2010 at 11:58 PM
Bayam trashes voodoo economics, yet supports both Clinton and Obama simultaneously
This is what partisan fueled stupidity looks like, people.
Chuck Schick on April 6, 2010 at 11:59 PM
Hmmm, I just told the daughter of a friend about the VAT when she commented she wanted to live in Europe so that she could have “free” health care. When will they understand that NOTHING is free.
And this just added more joy to my night:
http://www.nytimes.com/2010/04/07/business/07cars.html
Pension plans at GM and Chrysler are underfunded to the tune of 17 Billion. And WE are on the hook for it if they can’t put some serious coinage together.
journeyintothewhirlwind on April 7, 2010 at 12:00 AM
I can’t remember exactly when, but Obama said that he thought we should have the VAT in ADDITION to the existing tax structure.
Laura in Maryland on April 7, 2010 at 12:00 AM
No, you’re just a run-of-the-mill tea partier. I talk to many people like you every day.
platypus on April 7, 2010 at 12:00 AM
Hey Journeyintothewhirlwind, don’t forget the companion piece:
http://www.nytimes.com/2010/04/07/business/07pension.html?ref=business
about California’s half-trillion dollar pension gap, too.
byepartisan on April 7, 2010 at 12:02 AM
What is scary to me is that more people care about posting on Lesbia!ns and a prom (6+ pages last time I checked) and not even breaking 3 pages on somethingas imporant as an economy killing tax such as this. :(
Dire Straits on April 7, 2010 at 12:02 AM
Good idea. I say we start by having Axelrod fire his trolls. Poor Dayam…he won’t get paid for edjeekating us any more.
Laura in Maryland on April 7, 2010 at 12:03 AM
Buffet only pays long-term capital gains tax (investment income), which comes in at 15%. If his secretary earns $50k per year, then she falls into the 25% tax bracket. So Buffet pays more tax than his secretary in total, but he pays into a lower bracket and he pays zero income tax.
In the past, Buffet would have paid both the 15% capital gains tax plus personal income tax, but personal income tax on capital gains was removed by Bush. There’s really no mystery as to why this country has such a huge national debt.
bayam on April 7, 2010 at 12:03 AM
We could kiss…
Seven Percent Solution on April 7, 2010 at 12:04 AM
Medicare, Medicaid, Social Security… and that’s before we even get to the Health Care boondoggle.
byepartisan on April 7, 2010 at 12:06 AM
Truth be told, we already know how to deal with this tax crap – vote the ba$tards out in November. Once you get that far, there ain’t much to talk about.
Now le$bo p0rn and proms and allahpundit dating dramas – well, that is perpetually interesting.
platypus on April 7, 2010 at 12:07 AM
byepartisan on April 7, 2010 at 12:02 AM
dear lord, help us.
journeyintothewhirlwind on April 7, 2010 at 12:08 AM
Keynesian economics : output depends on demand, high savings are a bad thing, big government necessary for stabilization
not so
capacity drives output (not demand), savings and investment drive capacity
there is plenty showing how households and business respond to taxes. increase in taxes cuts consumer spending, cost of capital increases, american products become less competitive globally – all that retards recovery
Clinton years: revenue increases (IT) overshadowed the tax increases plus, Republican congress clamped down on government spending
runner on April 7, 2010 at 12:08 AM
Bingo. And keep in mind that all this spending is nothing more than the politicians way of bribing people to stay in power. A system built around power rooted in pay-offs and bribes is going to run into debt.
pearson on April 7, 2010 at 12:09 AM
Fair point, and your’e right. I was trying to explain why Buffet said that higher capital gains don’t affect corporate decisions to expend and invest in growth. Capital gains taxes have less of an impact on everyday consumers, although any tax that takes money out of consumers’ hands will reduce consumption.
If higher taxes positively impact the bond market, then taxes can help set the economy up for long-term growth, as occurred in the 90′s. (Note that I’m not mixing up Clinton economic policy with his perverted sex life.)
bayam on April 7, 2010 at 12:09 AM
You are right…
… there is no mystery.
Seven Percent Solution on April 7, 2010 at 12:10 AM
You’re kidding, right? I don’t remember surrendering any of my rights to your Chief, or having any delusions of having “peace.” Didn’t you hear all the sane voices in 2008 telling you, “Don’t drink the kool aid!”?
Gang-of-One on April 7, 2010 at 12:11 AM
good point.
Dire Straits on April 7, 2010 at 12:13 AM
There won’t be any fiscal responsibility. The government is any different from most American households. No matter how much people earn, they live beyond their means. You could take someone who is dirt poor and give them a $500K/yr salary and I guarantee you they would find a way to spend it all and still go into debt. Reagan’s way is the only way that works. You have to cut off the money supply; it’s the only way government will even consider spending less.
NoLeftTurn on April 7, 2010 at 12:14 AM
Ha ha, that’s good. Well, better that it go to charity than stay in the family and fund future liberal politicians, right?
When you remove the death tax on all income over $2 mil, yes a lot of rich people will give it away instead of leaving it to their sniveling little offspring. But that’s generally considered a good thing. No one ever said that Rockefeller or Carnegie had hearts of gold but their impact has been tremendous.
bayam on April 7, 2010 at 12:16 AM
Comment pages: « Previous 1 2 3 Next »