10 Steps to Defeat Boehner

[lostfan]

I'm sick and tired of the more taxes vs less taxes debate in this country, it's misguided at best, and if anyone took the time to open their eyes, they'd see how blind it really is. These "Bush Era" tax cuts are all we hear about now, they're expiring, the government needs more money, etc. In reality, taxes never really went down, they just shifted around, only nobody seems to notice...or care.

 

Meanwhile...

 

Liquor taxes went up.

 

Restaurant taxes went up.

 

Soda taxes went up.

 

Water taxes went up.

 

Sales taxes increased across the board, whether you buy a candy bar or a Ferrari.

 

Special entertainment taxes were added to your cable, phone and internet bills, most of which nobody can really explain since they seem like completely arbitrary values.

 

If you own a house, property taxes went up.

 

If you're a healthy eater, don't forget to increase taxes at your local product market, because they sure didn't!

 

You're city stickers/license plate stickers increased in price -- significantly.

 

The cost of work/building permits increased.

 

Bottom line...

 

These tax cuts have been and are a load of garbage, they just moved them from a national level to a local level, and neither are better off. Despite the nickle and dime increases on everything from bread to water, across the board, they're still increasing the state/local deficits, and it's not slowing down.

 

Bush era tax cuts. Meh. Great, I take a little bit more home every check, only I spend that much more one ever single little thing I buy.

But how many of these actually have any kind of effect at all on the federal budget? Like 2?

[southsider2k5]

But how many of these actually have any kind of effect at all on the federal budget? Like 2?

 

All of them?

[Balta1701]

All of them?

Except for the service fees like on phone service, I'd say almost all of them are state/local taxes, wouldn't you?

[lostfan]

All of them?

All those things are for city, county, state governments etc. I mean, I pay property taxes to Anne Arundel County, not the feds.

 

Further, let's say that all of it did have something to do with federal revenue, add it all up and sit that number next to the Bush tax cuts, how does it look? I'm guessing pretty tiny.

[Balta1701]

All those things are for city, county, state governments etc. I mean, I pay property taxes to Anne Arundel County, not the feds.

 

Further, let's say that all of it did have something to do with federal revenue, add it all up and sit that number next to the Bush tax cuts, how does it look? I'm guessing pretty tiny.

To be fair lost...I think when you add together all of the nation's property taxes and compare that to the yearly $300 billion or so cost of the Bush Tax cuts, I'm betting property taxes are quite a bit larger.

[southsider2k5]

All those things are for city, county, state governments etc. I mean, I pay property taxes to Anne Arundel County, not the feds.

 

Further, let's say that all of it did have something to do with federal revenue, add it all up and sit that number next to the Bush tax cuts, how does it look? I'm guessing pretty tiny.

 

All of them are money that is taken out of circulation in the general economy, and is subject to the governmental waste factor before getting redistrubted, probably to replace already lost funds. Those moneys that would be getting spent and subject to the multiplier effect and generating more income and income taxes instead are disappearing. Its all interrelated.

[Balta1701]

All of them are money that is taken out of circulation in the general economy, and is subject to the governmental waste factor before getting redistrubted, probably to replace already lost funds. Those moneys that would be getting spent and subject to the multiplier effect and generating more income and income taxes instead are disappearing. Its all interrelated.

Now not necessarily 2k5...for example, if the liquor taxes were dropped, wouldnt' that lead to: consumption of more liquor, and therefore potentially negative externalities associated with that?

 

Furthermore, would you disagree with the idea that things like the defense department, infrastructure, education, etc., have made positive contributions to the economy on their own?

[southsider2k5]

Now not necessarily 2k5...for example, if the liquor taxes were dropped, wouldnt' that lead to: consumption of more liquor, and therefore potentially negative externalities associated with that?

 

Furthermore, would you disagree with the idea that things like the defense department, infrastructure, education, etc., have made positive contributions to the economy on their own?

 

That direct economic impact is less than what the multiplier would have been without the waste factored in.

[Balta1701]

That direct economic impact is less than what the multiplier would have been without the waste factored in.

i'm going to be out of my league here quite soon, so let me just put this one up in reply, and note that whatever you say, I'm not going to respond unless it's something I know better.

But one argument I keep reading bugs me: it’s the claim that spending-based stimulus is bad because economic theory tells us that a marginal dollar of private spending is better than a marginal dollar of government spending.

 

That’s just wrong; it’s a misreading of basic, Econ 101 level, economics.

 

Yes, the standard theory of consumer choice says that a consumer gains more utility if he or she gets to freely allocate a dollar of spending than if someone else makes the choices: I’d rather buy myself a $10 meal than have you feed me $10 worth of food that you select.

 

But that’s not what we’re talking about when we talk about stimulus spending: we’re not talking about the government buying consumption goods for the public at large. Instead, we’re talking about spending more on public goods: goods that the private market won’t supply, or at any rate won’t supply in sufficient quantities. things like roads, communication networks, sewage systems, and so on. And every Econ 101 textbook explains that the provision of public goods is a necessary function of government.

 

When we’re asking whether it’s better to have the government stimulate the economy or to try to stimulate private spending, we’re asking among other things whether a marginal dollar spent on public goods is worth more or less than a marginal dollar spent on private consumption. And there’s nothing, even in Econ 101, that clearly favors private spending on private goods over public spending on public goods.

[southsider2k5]

i'm going to be out of my league here quite soon, so let me just put this one up in reply, and note that whatever you say, I'm not going to respond unless it's something I know better.

 

You aren't talking about stimulus spending though. You are talking about usage taxes. Usage taxes which affect the poor disproportionally more than the rich by their very nature. It is also money that is never able to be spent again by groups that by their very nature spend all of their incomes, usually out of necessity to survive. Again that means less money gets spent in the general economy to get taxed again and again, to create more income for the federal government to spend. This is money being taken out of circulation by local and state entities, which by their very definition are the least effective spenders of money for income creation purposes.

[lostfan]

Public spending doesn't just disappear. Yes I get that it's not an efficient way to distribute income but it doesn't just get eaten up by the tax demons forever and ever. The end result is eventually the same.

[southsider2k5]

Public spending doesn't just disappear. Yes I get that it's not an efficient way to distribute income but it doesn't just get eaten up by the tax demons forever and ever. The end result is eventually the same.

 

No it isn't. It takes more money to generate the same amount of income for the government. That either means smaller government (yeah, that'll happen), higher taxes, or more borrowing from China.

[lostfan]

No it isn't. It takes more money to generate the same amount of income for the government. That either means smaller government (yeah, that'll happen), higher taxes, or more borrowing from China.

I was trying to say, whether that money is collected through taxes and distributed by the government (I'm not arguing that this isn't ideal because this obviously means people get to keep less of what they earned) or whether it's spent by consumers or goes to mortgage payments or whatever, all of it eventually makes its way into "the economy." It doesn't just get burned up, it goes to a cop, or a teacher, or a construction worker and then they spend that money on goods and services like anyone else does.

[StrangeSox]

I was trying to say, whether that money is collected through taxes and distributed by the government (I'm not arguing that this isn't ideal because this obviously means people get to keep less of what they earned) or whether it's spent by consumers or goes to mortgage payments or whatever, all of it eventually makes its way into "the economy." It doesn't just get burned up, it goes to a cop, or a teacher, or a construction worker and then they spend that money on goods and services like anyone else does.

 

I've always wondered about this myself but assumed that I'm obviously missing something. There would be no waste or inefficiencies regardless of what money was spent on.

 

But I don't think you can look at things like infrastructure or public education and say private dollars would have been spent "better" or more efficiently. Without an educated populace or roads, we'd be little more than another developing economony with resources that are exploited by foreign companies.

[lostfan]

I've always wondered about this myself but assumed that I'm obviously missing something. There would be no waste or inefficiencies regardless of what money was spent on.

 

But I don't think you can look at things like infrastructure or public education and say private dollars would have been spent "better" or more efficiently. Without an educated populace or roads, we'd be little more than another developing economony with resources that are exploited by foreign companies.

I really am not disputing that you really would rather the government not be doing something that the private sector could do and there is a mostly finite list of exceptions to that rule. A government, of any size, really doesn't have the flexibility that a private business does (although this point starts to become moot when you're talking about tens of billions of dollars of revenue, and multinationals, etc.). I do argue about the nature of taxes, though. You'd think all that money just goes into a poisonous black hole or something. It doesn't.

[southsider2k5]

Honestly, a decent survey of this stuff is something that comes in an intermediate level college macro-economics class that involves lots of fun calculus. Its not really easy to explain, and Krugman is being ingeniousness as an economics professor by pretending otherwise. At the end of the day, sending money to the government means that instead of a $10 meal, you are paying $11 for the same meal you could have just bought yourself, but instead had to hire someone to buy for you. That is the very simple definition of waste, or inefficiency.

[lostfan]

Honestly, a decent survey of this stuff is something that comes in an intermediate level college macro-economics class that involves lots of fun calculus. Its not really easy to explain, and Krugman is being ingeniousness as an economics professor by pretending otherwise. At the end of the day, sending money to the government means that instead of a $10 meal, you are paying $11 for the same meal you could have just bought yourself, but instead had to hire someone to buy for you. That is the very simple definition of waste, or inefficiency.

I'm not arguing this point, I was converted to that point of view long ago although I don't act like it on here

[StrangeSox]

Honestly, a decent survey of this stuff is something that comes in an intermediate level college macro-economics class that involves lots of fun calculus. Its not really easy to explain, and Krugman is being ingeniousness as an economics professor by pretending otherwise. At the end of the day, sending money to the government means that instead of a $10 meal, you are paying $11 for the same meal you could have just bought yourself, but instead had to hire someone to buy for you. That is the very simple definition of waste, or inefficiency.

 

But how well does that work for "goods" like roads and education?

[StrangeSox]

Honestly, a decent survey of this stuff is something that comes in an intermediate level college macro-economics class that involves lots of fun calculus. Its not really easy to explain, and Krugman is being ingeniousness as an economics professor by pretending otherwise. At the end of the day, sending money to the government means that instead of a $10 meal, you are paying $11 for the same meal you could have just bought yourself, but instead had to hire someone to buy for you. That is the very simple definition of waste, or inefficiency.

 

 

Also, until you posted this, I had completely forgotten that I actually did take an intermediate macroeconomics course.

[southsider2k5]

But how well does that work for "goods" like roads and education?

 

You don't think sending money to Washington to send it back to its place of origin to be spent is going to result in waste?

[StrangeSox]

You don't think sending money to Washington to send it back to its place of origin to be spent is going to result in waste?

 

Regardless of the level of government it gets spent at, does the economic theory work well for all goods?

 

Hypothetically, let's remove all state and federal government. Only counties and cities/townships/municipalities/etc.

 

Would all public spending on items typically viewed as public services, such as roads and education, be less efficient than public spending--by definition?

[southsider2k5]

Regardless of the level of government it gets spent at, does the economic theory work well for all goods?

 

Hypothetically, let's remove all state and federal government. Only counties and cities/townships/municipalities/etc.

 

Would all public spending on items typically viewed as public services, such as roads and education, be less efficient than public spending--by definition?

 

By simple economic activity, that is a 100% yes. Anytime you involve extra layers to take money away, that results in less economic activity in total. The state and nationalization has been a disaster in funding compared to local property tax spending for districts that aren't seeing increases in student population. I can tell you that after having studied 8 years worth of school budgets in detail in my hometown.

[NorthSideSox72]

To be fair lost...I think when you add together all of the nation's property taxes and compare that to the yearly $300 billion or so cost of the Bush Tax cuts, I'm betting property taxes are quite a bit larger.

Cook County generates something like $3B-$4B in property taxes annually. Just to put it in perspective. Cook County has what, maybe 5-6 million people or so? If its $3.5B for 5.5 million people, that's about $650 per person in populace. If that ratio roughly extends laterally, you get $195B.

 

[Balta1701]

You don't think sending money to Washington to send it back to its place of origin to be spent is going to result in waste?

If I replace the word "Washington" with the phrase "Wall Street"...doesn't that argument work equally well?

[NorthSideSox72]

If I replace the word "Washington" with the phrase "Wall Street"...doesn't that argument work equally well?

Both have waste, but only one can turn a profit to offset that waste.

 

Now, before you go off the deep end in response, I am not saying that means private business should do everything. Some things are just better handled by the government, obviously, despite the fact that there may be more waste or inefficiency there.