I like his plan, just don’t like the guy. Me being an arch conservative, he creeps me out but cannot put a finger on why. Still siding with Herman.
The best thing about the Perry plan is that, like 999, it is raising public awareness of tax alternatives. We now need the number crunchers to weigh the different economic plans and point out the pros and cons of each in real numbers, especially as respect to deficit reduction. I don’t see any current proposal as the last word. Paul Ryan will have a big say in the final legislation. I hope the candidates can discuss their differences and state in understandable language why they take a certain position. I welcome the opportunity to evaluate candidates on the way they think about solving our financial problems. The devil is always in the details. If these need to be changed, I would like to know why.
excellent expat
“I hope the candidates can discuss their differences and state in understandable language why they take a certain position.”
Me too. Perry can’t.
Sounds like a good plan. Unfortunately it doesn’t have a snowball’s chance with today’s dumbed down Americans.
He’s the first one to address the spending issue specifically, and set at a % of GDP that, on average, would leave us with a budget surplus so we can, you know, actually pay down the debt. But agree that Perry just doesn’t seem likely to get it done.
IMO the flat tax is the way to go, but 20% is too high. !0% is enough to fund the essential duties of DC. I feel the same about Cain’s 999. Its too much. 555 is more to my taste. If we restricted DC to the powers granted by the constitution the annual budget would automatically be cut by 50% (or more).
Yes, I know its a dream.
Parker writes: ” . . . 20% is too high. !0% is enough to fund the essential duties of DC.”
I’m reminded of something Prof. Walter Williams wrote once on the subject, back in the 1990s.
Almost verbatim, here,
“If 10 percent is good enough for the Baptist Church, 10 percent ought to be good enough for the federal government.”
“I hope the candidates can discuss their differences and state in understandable language why they take a certain position.”
Me too. Perry can’t.”
With all due respect, that’s an opinion…not a fact.
I read the linked article and while it could only be a broad outline, it seemed clearly stated to me, much more specific than Cain’s 999 plan, and didn’t require 59 points which in my opinion. few will bother to read (shouldn’t be that complicated).
I had no trouble at all comprehending it and I understand it was outlined in Perry’s speech today with almost no reference to his notes.
Having said that, I’d still prefer a 100% consumption tax…and NO income tax Filing it for an individual wouldn’t even require a postcard.
I like Gingrich’s plan better. I believe his is a 17% flat tax and 12.5% Corporate tax.
I wish that people understood that Corporations DON’T pay taxes even when they do. Corporate taxes are factored in to the “Cost of Goods and Services”. Only Consumers pay that tax.
Something with Perry just doesn’t sit right with me. Can’t put my finger on it.
Corrected:
Me too. Perry can’t. That’s my opinion.
I like the plan. One big reason is that it would incentivize investment and economic activity.
As expat says, the devil is in the details. This is Reagan supply side economics and the other part of it – the hardest part – is getting the government to cut its spending. Otherwise the deficit grows way beyond where it is now.
Reagan got the tax cuts and the economic activity expanded. He never got the promised spending cuts. But the deficit then was not so huge that it threatened the credit and viability of the country.
The spending must be brougtht under control or no new tax plan is worth a hoot.
For those who don’t recall all the departments and agencies added to the government since 1960 and what it has done to spending here’s a great reminder: http://tinyurl.com/3hotk5d
We did some big things when the government was smaller and less intrusive. We need to move back in that direction. Less nannyism and more doing.
I agree that 20% is too high.
Married, filing jointly on about $93,000 gross income and taking standard deduction, plus whatever credits you get for being old, my effective rate is 10-12%. How can Perry squeeze 20% out of me and call it a good deal? If the 40+% of the population who pay no taxes are going to be brought in to the fold, why should it require a 20% flat rate?
Someone is pushing a simplified, 3 bracket system. I believe that is the way to go.
It is all smoke and mirrors. We know that politicians are not going to give up the power to reward through the tax system, those whose votes they covet. Even if it starts out simple with just a few favorite deductions and loopholes, it will grow ever more complex as time passes.
MJR
That 10% was good enough for Moses.
“The spending must be brougtht under control or no new tax plan is worth a hoot.”
Agreed. Prioritize, cut, eliminate, shrink, and cut some more. The first candidate who states in exact, emphatic terms that he/she will veto any budget that is not balanced is the only candidate I can support wholeheartedly.
The question is not whether Perry will cap spending at 18%, but whether congress, especially the Democrats, will; it’s a great idea, but a highly dubious supposition…
Like texexec, I prefer scrapping the income tax entirely and replacing it with a consumption tax.
Since that’s not an option, and based on what I know now, I think I prefer Cain’s 999. It’s at least partially consumption based, and he’s said he hopes 999 will ultimately lead to repealing the income tax and replacing it with a consumption tax.
Oldflyer, under Perry’s plan, I believe both you and your wife will be eligible for a $12,500 standard deduction. So, your tax will be ($93.000 – $25,000) * 20% = $13,600. That puts your effective tax rate at 14.6%.
Not quite as good as your current rate, but in an era of a $16 trillion national debt and $1.5 trillion annual deficits, how much longer do you think you’re going to get to pay tax rates of 10%-12% on your income? And as I understand it, you can continue to pay taxes the way you currently do. Perry just wants to give you another option. (That sounds creepily like Obama’s, “if you like your current health insurance plan you can keep it”), so who knows what Congress will actually enact.
He might as well just cut spending to zero.
He’s not going to create any jobs with his tax plan, that’s for sure. All the tax cuts in the world won’t make up for the difference in wages between American workers and Chinese prison labor. All the tax cuts in the world won’t replace a single job lost to automation. And honestly, when multinational corporations don’t pay that effective tax rate now, getting even less money out of them won’t do us any good.
The only real solution is to raise taxes and give them teeth for the “big boys” not just Joe Schmoe, AND slash spending dramatically. At least if you are really interested in solving the deficit issue. Of course many Republicans imagine we can grow our way out of this, with more tax cuts when tax cuts have done nothing to increase real employment in nearly 4 years. So no, people that talk like Perry aren’t really concerned about the deficit.
“Of course many Republicans imagine we can grow our way out of this..”
I agree that anyone who believes we can grow our way out of this dilemma are insane.
“The only real solution is to raise taxes… ”
That is never a solution. DC will simply, as past history shows, spend and borrow more.
STRAVE THE BEAST!
“And honestly, when multinational corporations don’t pay that effective tax rate now, getting even less money out of them won’t do us any good.”
Economics 101: Businesses large & small factor taxes into the cost of the products or services they provide. Thus, taxes on commerce are in fact a tax on consumers.
“When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.”
P.J. O’Rourke
Brad,
Taxes aren’t the only thing hemming investment and jobs. Uncertainty with regard to regulation and future costs due to taxes and employee benefits is probably more important. When Obama identifies an new demon of the month every month, who can plan for the future. It should have been rather easy to get the Gulf oil workers back to work, but Obama can’t get his bureaucratic monsters to move. Or he doesn’t want to. I suspect that the economy will start to move as soon as the Reps consolidate behind some sort of platform and have a candidate or 2 that seem able to beat Obama. That’s one reason our jumping from one messiah to the next will have to stop. The party has to be more reliable than the Dems.
OT: but I just saw this at Ace of Spades.
“It turns out Gerard Vanderleun’s sudden [Internet] silence was actually due to a serious heart attack last week (he’s now recovering okay).”
I hope he is, and I always love Vanderleun’s comments here.
“”So no, people that talk like Perry aren’t really concerned about the deficit.””
Brad
The deficit is not the problem to be concerned about. It’s a logical symptom of the real problem. An obese and oppressive federal government.
Being concerned about the deficit is like a fat man thinking the rising cost of groceries is his biggest problem.
Spending by all governments, especially the federal government is a big problem, but it’s not the only problem.
For a long time, almost all of us have been buying things we really don’t need. That creates debt everywhere including federal and other government debt (eg. Fannie Mae guaranteeing private loans for houses many couldn’t afford or the Fed printing money to buy things from China which gets turned into Treasury note and bond debt).
Our tax system encourages consumption and discourages production. And we wonder why the two are out of balance.
I think 100% of our government revenue should come from consumption taxes. I might go along with food items being exempted.
EVERYONE pays something for what they take out of the system.
Parker:
Given that I think the “beast” is as much out of control multinationals as out of control government, the only real way to defeat them is to starve them both WHICH you have to do in different ways.
As for the multinationals it would be quite simple. I’d threaten to tax capital gains and do other things to make the lives of the owners quite miserable (and I can think of quite a few) if they raised prices simply because they’d rather bring in twenty percent profit rather than 10.
I know the next protest will be about how they will all move to China, Mexico, Hondoras, or whatever, but since they are already doing that anyway with the full blessing of a brought and paid for US government, I’d nationalize their assets here and tell them to have a good life.
Brad,
“I’d threaten to tax capital gains and do other things to make the lives of the owners quite miserable (and I can think of quite a few) if they raised prices simply because they’d rather bring in twenty percent profit rather than 10.”
Do you really believe that? Do you know who the owners are? The owners are – you and me. At least i assume yioiu have some investments in a 401k or IRA. Everyone who hopes to retire some day has to have some investments in the engines of wealth and gowth called corporations. Part of the reason all the promised public employee pensions are in trouble is because the pension plans have earned bupkis over the last eleven years when the plan administrators had projected 6-8% growth. Getting the economy moving again and getting normal returns from the stock and bond markets again would do wonders for all the financial problems we have. I guess you don’t believe it, but the business of America is business. It is what made us rich. It is why the Chinese and others are trying to emulate us.
I have just dipped my toe into Gingrich’s plan and like it even better than Perry’s plan, but it would require even more spending discipline.
The problems are:
1. The economy is performing way below its potential.
2. New business activity depends on a stable regulatory and tax outlook with an opportunity to make profits.
3. The government is taking too many dollars out of the private economy in the form of taxation thta blunts investment and growth.
The solution is less government spending, less government regulation, and lower taxes to allow the economy to perform up to its potential. A growing economy would provide more revenue for the government that, if it can control spending, would solve the deficit problem.
Things like this only matter IF we get that far..
Occupy Infestations Begin to Degenerate in Riots
It was inevitable, and no surprise that it began in Oakland, the riot-friendly fifth most liberal city in the USA behind Washington, DC – the Occupy infestations are degenerating into a total breakdown of public order. The hippies and communists illegally infesting Frank Ogawa Plaza were finally removed. When they tried to reclaim their extremely sordid squatter encampment, hell predictably broke loose.
the real key is knowing what to pay attention to… and which comes first..
ie.. unicorns come AFTER we have utopia, so discussing them is irrelevent unless you think utopia is coming up fast.
well, we have to get to november elections to be able to have them… and the way it looks, we are going to be nationalized (thorugh fiat and extra legal games and even appointee advocacy judges), and regulated before that.
ie… if there is no constitution, there will be no real elections.
so discussing the plans of the potentials that are running, precludes the existence of a race.
national riots whether really large or not is the perfect and ANTICIPATED point i said a long time ago.
ignoring it will not get us to the election
ignoring it WILL get us their idea of utopia
JJ:
On your points 2 and 3 we totally disagree.
As far as investments, currently no. My last investment got wiped out during the Late Fun of the market crash in 2008. I don’t think I’m ever going to retire, and with my current income I’m worried that I won’t even be getting healthcare when I’m older so I’m considering finding a way of painless suicide.
I live in Texas. I like Perry. A lot. I like his economic plan. A lot. I enthusiastically support Rick Perry for President.
Perry is bad at debates. A lot bad. Debates are his Kryptonite.
Perry is intelligent. I promise: Rick Perry is a smart man who is a sincere and discerning economic conservative. It is just that he is horrible at debate.
Perry is not smooth. He is a blunt instrument. I wish he was a smooth as Ronald Reagan. He is not. Remember, however, that Ronald Reagan was derided as an idiot who would lead the world into nuclear war. I wish Perry was as cool and collected as Dick Cheney. He is not. However, the actual cool and collected Dick Cheney did not necessarily appeal to American voters.
Perry is a sincere and discerning economic conservative. He understands business climate, personal freedoms, limited government, responsible spending, problems created by stifling overregulation, the Laffer Curve.
The really good things about Rick Perry: he is a sincere economic conservative, and he is like a dog on a bone. Perry has decided to run for President, and he will pursue it, well, doggedly. The man is determined, is not easily dissuaded.
Another good thing: Perry is excellent in one on one interviews. Watch him, tonight, on the Bill O’Reilly show. He will be excellent, because he understands governing and he understands business climate. Bonus: Perry is an extrovert who loves to meet voters; is fabulous in personal encounters with voters.
Many of y’all will think I am crazy, and I understand why you have that opinion, but: Rick Perry is going to be the next President of the United States. And it will be the best thing which could have happened to America.
Last time a flat tax was making news, iirc, the plan included an exemption for a family of four of $36k. Other households were proportionally exempted. So the guys paying, effectively, 10-12% today on a W2 of $95k would be paying the tax, whatever it turns out to be, on $59k. Most proposals have few or no deductions beyond the basic exemption.
When Perry’s plan was unveiled it impressed me as both unserious and purely political.
The primary problem with both Perry’s and Gingrich’s plans are that they are optional. Since they are optional they do nothing to broaden the tax base or to get skin in the game from those not paying taxes. They do nothing to reform the existing tax code, nor to reduce compliance costs, nor to reduce the scope and intrusiveness of the IRS.
Taxes with deductions for certain economic behaviors, like mortgage interest, are not flat. I don’t have a particular problem with saying that a certain amount of income is untaxed as long as that number is the same for everyone. Where there are deductions the government can still pick winners and sell favors.
Both Gingrich’s and Perry’s plans are political talking points to blunt the popularity of Cain’s 9-9-9 (or for people at the poverty level 9-0-9) plan.
Assuming that we believe that either an optional flat tax or 9-9-9 could get passed by the government I would strongly prefer 9-9-9.
At this moment in history, 9-9-9 cannot get passed. 9-9-9 is a wonderful proposal .. because it moves the national conversation in the proper direction. Kudos to Herman Cain.
Perry’s proposal is closer to something which can be acted upon. And, insofar as reducing the intrusiveness of the IRS, doing your taxes on a postcard is a good start. Btw, Perry stole the postcard idea from Herman Cain, who stole if from Steve Forbes. Kudos to all who steal a good ideas.
Brad, if your situation is as you say, then my sympathies go out to you. You belong with the OWS people because you have not been able, for whatever reasons, to climb up the ladder of opportunity.
My own sentiments were somewhat similar back in the 70s. The future looked bleak until Ronaldus Maximus road onto the scene. It took me almost four years to realize that Reagan really did turn the economy around because the MSM was so busy telling everyone it wasn’t so. I was certain that there was no future worth considering, but I was wrong. Lower taxes and less regulation made the difference. Between 1980 and 1993 when I retired my financial situation improved by a whole lot. Eighteen years and I’m not having to eat dog food or skip any medications yet.
The problem is that every time we begin to get things right, the progressives always want to increase the size and scope of government putting us back in the hole.
uncleFred,
I have the same reservations about the mortgage deduction, but I’ve seen a few comments elsewhere saying that getting rid of it in one swoop with today’s housing situation is probably too disruptive. The commenters prefer a phased-in elimination. If the plan is serious, I could go with that.
Beverly: yes, he had a scare, but is recovering and posting (a little bit) at his blog now. He promises more articles to come about what he went through.
Ed Morrisey reports on a conference call with Paul Ryan about the Perry plan. Ryan says the option of flat vs status quo taxes is meant to allow time for individuals to adjust to a new tax structure. He also says that once you choose the flat tax, there is no switching back.
I love it that we are talking about meat other than RINO meat these days.
Thanks for clarifying Scott.
Like others, and being a small consumer, I really prefer a consumption tax. I also think that is the fairest form of tax. Being a little selfish I would also favor more user fees, e.g. school fees on those using schools. (It really rankles to see the mini-Taj Mahals that are required to educate, or not educate, children today and which I am expected to help fund. The schools I went to would be condemned out of hand now.)
Sorry to hear about VandDerleun’s problems. He is a treasure
Expat it comes down to dollars in hand. A 9% personal income tax means that you don’t need the mortgage deduction.
gcotharn – the problem is that the post card doesn’t help if you need to do your regular tax prep first to see if the “flat” tax is a better deal. Further the notion that a flat tax, even an optional flat tax, is materially easier to pass than 9-9-9 is pretty dubious. The entrenched interests in the congress will fight like dervishes to protect their ability to sell tax favors, I’d rather fight it and end up with a no exemption 9-9-9 than get a fungible flat tax, which is not flat, and have to have the fight again in two decades.
No mention of FICA. This proposal represents a 35.3% tax on wages. (Somewhat flat 20 + paycheck FICA + hidden employer FICA)
I call that a fail. It’s as if he didn’t really think through the tax code.
Spending reductions are awesome, but they’re not properly part of a *tax* proposal. They should be part of a *budget* proposal. Focus, Rick, focus!
With the deductions, it isn’t a flat tax after all. It is a politician applying an appealing label to fool the public. Orwell has a cousin in Texas.
Foxmarks:
We need to put in place some mechanism that links budgets and taxes so that we don’t end up in the all to common situation that we trade tax increases for spending cuts and the cuts never happen (or the other way around). Perhaps that they get written and negotiated separately, but both spending and tax policy are voted on together. They both pass or neither passes.
uncleFred said: We need to put in place some mechanism that links budgets and taxes […]
That sounds like some kind of Balanced Budget Amendment to me. I haven’t been in favor of it in the past, believing that you can’t legislate responsibility.
But I’m changing my mind. The Founding Fathers recognized the need for divided government and separation of powers. They recognized the need to strictly enumerate the powers of the national government. And isn’t it AMAZING that they felt the need to include the 10th Amendment in the Bill Of Rights, to ensure that all power not specifically vested in the national government were retained by the States, or by the people.
Of course, Congress has since ceded its authority over lawmaking to the Executive Branch, culminating in Obama’s czars. And the meaning of the enumerated powers has been stretched beyond recognition. And the 10th Amendment is, these days, utterly ignored. The same could happen with any balanced budget amendment.
But I’m changing my mind. A direct link, as uncleFred said, between revenue and spending could be considered necessary, based on our experiences with an ever-expanding national government. I now believe it would be useful to have that link be Constitutional. Perhaps you could require a 2/3 vote to depart from it in both houses of Congress, to deal with national emergencies, such as war. If you can’t get 2/3 vote in both houses, then I guess it’s not really an emergency, is it?
They could still play nasty budget hide-the-money tricks such as was done with ObamaCare. But it would still help. Heck: As a prior year’s actual data resolves any discrepancy between its budgeted (guessed) revenues and expenditures, you can require this year’s budget to deal with any such discrepancy, thus putting an even better corrective into place; at the risk of adding complexity to such an amendment.
Leave a Reply
HTML tags allowed in your
comment: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>
I like his plan, just don’t like the guy. Me being an arch conservative, he creeps me out but cannot put a finger on why. Still siding with Herman.
The best thing about the Perry plan is that, like 999, it is raising public awareness of tax alternatives. We now need the number crunchers to weigh the different economic plans and point out the pros and cons of each in real numbers, especially as respect to deficit reduction. I don’t see any current proposal as the last word. Paul Ryan will have a big say in the final legislation. I hope the candidates can discuss their differences and state in understandable language why they take a certain position. I welcome the opportunity to evaluate candidates on the way they think about solving our financial problems. The devil is always in the details. If these need to be changed, I would like to know why.
excellent expat
“I hope the candidates can discuss their differences and state in understandable language why they take a certain position.”
Me too. Perry can’t.
Sounds like a good plan. Unfortunately it doesn’t have a snowball’s chance with today’s dumbed down Americans.
He’s the first one to address the spending issue specifically, and set at a % of GDP that, on average, would leave us with a budget surplus so we can, you know, actually pay down the debt. But agree that Perry just doesn’t seem likely to get it done.
IMO the flat tax is the way to go, but 20% is too high. !0% is enough to fund the essential duties of DC. I feel the same about Cain’s 999. Its too much. 555 is more to my taste. If we restricted DC to the powers granted by the constitution the annual budget would automatically be cut by 50% (or more).
Yes, I know its a dream.
Parker writes: ” . . . 20% is too high. !0% is enough to fund the essential duties of DC.”
I’m reminded of something Prof. Walter Williams wrote once on the subject, back in the 1990s.
Almost verbatim, here,
“If 10 percent is good enough for the Baptist Church, 10 percent ought to be good enough for the federal government.”
“I hope the candidates can discuss their differences and state in understandable language why they take a certain position.”
Me too. Perry can’t.”
With all due respect, that’s an opinion…not a fact.
I read the linked article and while it could only be a broad outline, it seemed clearly stated to me, much more specific than Cain’s 999 plan, and didn’t require 59 points which in my opinion. few will bother to read (shouldn’t be that complicated).
I had no trouble at all comprehending it and I understand it was outlined in Perry’s speech today with almost no reference to his notes.
Having said that, I’d still prefer a 100% consumption tax…and NO income tax Filing it for an individual wouldn’t even require a postcard.
I like Gingrich’s plan better. I believe his is a 17% flat tax and 12.5% Corporate tax.
I wish that people understood that Corporations DON’T pay taxes even when they do. Corporate taxes are factored in to the “Cost of Goods and Services”. Only Consumers pay that tax.
Something with Perry just doesn’t sit right with me. Can’t put my finger on it.
Corrected:
Me too. Perry can’t. That’s my opinion.
I like the plan. One big reason is that it would incentivize investment and economic activity.
As expat says, the devil is in the details. This is Reagan supply side economics and the other part of it – the hardest part – is getting the government to cut its spending. Otherwise the deficit grows way beyond where it is now.
Reagan got the tax cuts and the economic activity expanded. He never got the promised spending cuts. But the deficit then was not so huge that it threatened the credit and viability of the country.
The spending must be brougtht under control or no new tax plan is worth a hoot.
For those who don’t recall all the departments and agencies added to the government since 1960 and what it has done to spending here’s a great reminder:
http://tinyurl.com/3hotk5d
We did some big things when the government was smaller and less intrusive. We need to move back in that direction. Less nannyism and more doing.
I agree that 20% is too high.
Married, filing jointly on about $93,000 gross income and taking standard deduction, plus whatever credits you get for being old, my effective rate is 10-12%. How can Perry squeeze 20% out of me and call it a good deal? If the 40+% of the population who pay no taxes are going to be brought in to the fold, why should it require a 20% flat rate?
Someone is pushing a simplified, 3 bracket system. I believe that is the way to go.
It is all smoke and mirrors. We know that politicians are not going to give up the power to reward through the tax system, those whose votes they covet. Even if it starts out simple with just a few favorite deductions and loopholes, it will grow ever more complex as time passes.
MJR
That 10% was good enough for Moses.
“The spending must be brougtht under control or no new tax plan is worth a hoot.”
Agreed. Prioritize, cut, eliminate, shrink, and cut some more. The first candidate who states in exact, emphatic terms that he/she will veto any budget that is not balanced is the only candidate I can support wholeheartedly.
The question is not whether Perry will cap spending at 18%, but whether congress, especially the Democrats, will; it’s a great idea, but a highly dubious supposition…
Like texexec, I prefer scrapping the income tax entirely and replacing it with a consumption tax.
Since that’s not an option, and based on what I know now, I think I prefer Cain’s 999. It’s at least partially consumption based, and he’s said he hopes 999 will ultimately lead to repealing the income tax and replacing it with a consumption tax.
Oldflyer, under Perry’s plan, I believe both you and your wife will be eligible for a $12,500 standard deduction. So, your tax will be ($93.000 – $25,000) * 20% = $13,600. That puts your effective tax rate at 14.6%.
Not quite as good as your current rate, but in an era of a $16 trillion national debt and $1.5 trillion annual deficits, how much longer do you think you’re going to get to pay tax rates of 10%-12% on your income? And as I understand it, you can continue to pay taxes the way you currently do. Perry just wants to give you another option. (That sounds creepily like Obama’s, “if you like your current health insurance plan you can keep it”), so who knows what Congress will actually enact.
He might as well just cut spending to zero.
He’s not going to create any jobs with his tax plan, that’s for sure. All the tax cuts in the world won’t make up for the difference in wages between American workers and Chinese prison labor. All the tax cuts in the world won’t replace a single job lost to automation. And honestly, when multinational corporations don’t pay that effective tax rate now, getting even less money out of them won’t do us any good.
The only real solution is to raise taxes and give them teeth for the “big boys” not just Joe Schmoe, AND slash spending dramatically. At least if you are really interested in solving the deficit issue. Of course many Republicans imagine we can grow our way out of this, with more tax cuts when tax cuts have done nothing to increase real employment in nearly 4 years. So no, people that talk like Perry aren’t really concerned about the deficit.
“Of course many Republicans imagine we can grow our way out of this..”
I agree that anyone who believes we can grow our way out of this dilemma are insane.
“The only real solution is to raise taxes… ”
That is never a solution. DC will simply, as past history shows, spend and borrow more.
STRAVE THE BEAST!
“And honestly, when multinational corporations don’t pay that effective tax rate now, getting even less money out of them won’t do us any good.”
Economics 101: Businesses large & small factor taxes into the cost of the products or services they provide. Thus, taxes on commerce are in fact a tax on consumers.
“When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.”
P.J. O’Rourke
Brad,
Taxes aren’t the only thing hemming investment and jobs. Uncertainty with regard to regulation and future costs due to taxes and employee benefits is probably more important. When Obama identifies an new demon of the month every month, who can plan for the future. It should have been rather easy to get the Gulf oil workers back to work, but Obama can’t get his bureaucratic monsters to move. Or he doesn’t want to. I suspect that the economy will start to move as soon as the Reps consolidate behind some sort of platform and have a candidate or 2 that seem able to beat Obama. That’s one reason our jumping from one messiah to the next will have to stop. The party has to be more reliable than the Dems.
OT: but I just saw this at Ace of Spades.
“It turns out Gerard Vanderleun’s sudden [Internet] silence was actually due to a serious heart attack last week (he’s now recovering okay).”
I hope he is, and I always love Vanderleun’s comments here.
“”So no, people that talk like Perry aren’t really concerned about the deficit.””
Brad
The deficit is not the problem to be concerned about. It’s a logical symptom of the real problem. An obese and oppressive federal government.
Being concerned about the deficit is like a fat man thinking the rising cost of groceries is his biggest problem.
Spending by all governments, especially the federal government is a big problem, but it’s not the only problem.
For a long time, almost all of us have been buying things we really don’t need. That creates debt everywhere including federal and other government debt (eg. Fannie Mae guaranteeing private loans for houses many couldn’t afford or the Fed printing money to buy things from China which gets turned into Treasury note and bond debt).
Our tax system encourages consumption and discourages production. And we wonder why the two are out of balance.
I think 100% of our government revenue should come from consumption taxes. I might go along with food items being exempted.
EVERYONE pays something for what they take out of the system.
Parker:
Given that I think the “beast” is as much out of control multinationals as out of control government, the only real way to defeat them is to starve them both WHICH you have to do in different ways.
As for the multinationals it would be quite simple. I’d threaten to tax capital gains and do other things to make the lives of the owners quite miserable (and I can think of quite a few) if they raised prices simply because they’d rather bring in twenty percent profit rather than 10.
I know the next protest will be about how they will all move to China, Mexico, Hondoras, or whatever, but since they are already doing that anyway with the full blessing of a brought and paid for US government, I’d nationalize their assets here and tell them to have a good life.
Brad,
“I’d threaten to tax capital gains and do other things to make the lives of the owners quite miserable (and I can think of quite a few) if they raised prices simply because they’d rather bring in twenty percent profit rather than 10.”
Do you really believe that? Do you know who the owners are? The owners are – you and me. At least i assume yioiu have some investments in a 401k or IRA. Everyone who hopes to retire some day has to have some investments in the engines of wealth and gowth called corporations. Part of the reason all the promised public employee pensions are in trouble is because the pension plans have earned bupkis over the last eleven years when the plan administrators had projected 6-8% growth. Getting the economy moving again and getting normal returns from the stock and bond markets again would do wonders for all the financial problems we have. I guess you don’t believe it, but the business of America is business. It is what made us rich. It is why the Chinese and others are trying to emulate us.
I have just dipped my toe into Gingrich’s plan and like it even better than Perry’s plan, but it would require even more spending discipline.
The problems are:
1. The economy is performing way below its potential.
2. New business activity depends on a stable regulatory and tax outlook with an opportunity to make profits.
3. The government is taking too many dollars out of the private economy in the form of taxation thta blunts investment and growth.
The solution is less government spending, less government regulation, and lower taxes to allow the economy to perform up to its potential. A growing economy would provide more revenue for the government that, if it can control spending, would solve the deficit problem.
Things like this only matter IF we get that far..
Occupy Infestations Begin to Degenerate in Riots
the real key is knowing what to pay attention to… and which comes first..
ie.. unicorns come AFTER we have utopia, so discussing them is irrelevent unless you think utopia is coming up fast.
well, we have to get to november elections to be able to have them… and the way it looks, we are going to be nationalized (thorugh fiat and extra legal games and even appointee advocacy judges), and regulated before that.
ie… if there is no constitution, there will be no real elections.
so discussing the plans of the potentials that are running, precludes the existence of a race.
national riots whether really large or not is the perfect and ANTICIPATED point i said a long time ago.
ignoring it will not get us to the election
ignoring it WILL get us their idea of utopia
OPDs Response to Occupy Oakland MIRROR
http://www.youtube.com/watch?feature=player_embedded&v=QiURSwIui-o
JJ:
On your points 2 and 3 we totally disagree.
As far as investments, currently no. My last investment got wiped out during the Late Fun of the market crash in 2008. I don’t think I’m ever going to retire, and with my current income I’m worried that I won’t even be getting healthcare when I’m older so I’m considering finding a way of painless suicide.
I live in Texas. I like Perry. A lot. I like his economic plan. A lot. I enthusiastically support Rick Perry for President.
Perry is bad at debates. A lot bad. Debates are his Kryptonite.
Perry is intelligent. I promise: Rick Perry is a smart man who is a sincere and discerning economic conservative. It is just that he is horrible at debate.
Perry is not smooth. He is a blunt instrument. I wish he was a smooth as Ronald Reagan. He is not. Remember, however, that Ronald Reagan was derided as an idiot who would lead the world into nuclear war. I wish Perry was as cool and collected as Dick Cheney. He is not. However, the actual cool and collected Dick Cheney did not necessarily appeal to American voters.
Perry is a sincere and discerning economic conservative. He understands business climate, personal freedoms, limited government, responsible spending, problems created by stifling overregulation, the Laffer Curve.
The really good things about Rick Perry: he is a sincere economic conservative, and he is like a dog on a bone. Perry has decided to run for President, and he will pursue it, well, doggedly. The man is determined, is not easily dissuaded.
Another good thing: Perry is excellent in one on one interviews. Watch him, tonight, on the Bill O’Reilly show. He will be excellent, because he understands governing and he understands business climate. Bonus: Perry is an extrovert who loves to meet voters; is fabulous in personal encounters with voters.
Many of y’all will think I am crazy, and I understand why you have that opinion, but: Rick Perry is going to be the next President of the United States. And it will be the best thing which could have happened to America.
Last time a flat tax was making news, iirc, the plan included an exemption for a family of four of $36k. Other households were proportionally exempted. So the guys paying, effectively, 10-12% today on a W2 of $95k would be paying the tax, whatever it turns out to be, on $59k. Most proposals have few or no deductions beyond the basic exemption.
When Perry’s plan was unveiled it impressed me as both unserious and purely political.
The primary problem with both Perry’s and Gingrich’s plans are that they are optional. Since they are optional they do nothing to broaden the tax base or to get skin in the game from those not paying taxes. They do nothing to reform the existing tax code, nor to reduce compliance costs, nor to reduce the scope and intrusiveness of the IRS.
Taxes with deductions for certain economic behaviors, like mortgage interest, are not flat. I don’t have a particular problem with saying that a certain amount of income is untaxed as long as that number is the same for everyone. Where there are deductions the government can still pick winners and sell favors.
Both Gingrich’s and Perry’s plans are political talking points to blunt the popularity of Cain’s 9-9-9 (or for people at the poverty level 9-0-9) plan.
Assuming that we believe that either an optional flat tax or 9-9-9 could get passed by the government I would strongly prefer 9-9-9.
At this moment in history, 9-9-9 cannot get passed. 9-9-9 is a wonderful proposal .. because it moves the national conversation in the proper direction. Kudos to Herman Cain.
Perry’s proposal is closer to something which can be acted upon. And, insofar as reducing the intrusiveness of the IRS, doing your taxes on a postcard is a good start. Btw, Perry stole the postcard idea from Herman Cain, who stole if from Steve Forbes. Kudos to all who steal a good ideas.
Brad, if your situation is as you say, then my sympathies go out to you. You belong with the OWS people because you have not been able, for whatever reasons, to climb up the ladder of opportunity.
My own sentiments were somewhat similar back in the 70s. The future looked bleak until Ronaldus Maximus road onto the scene. It took me almost four years to realize that Reagan really did turn the economy around because the MSM was so busy telling everyone it wasn’t so. I was certain that there was no future worth considering, but I was wrong. Lower taxes and less regulation made the difference. Between 1980 and 1993 when I retired my financial situation improved by a whole lot. Eighteen years and I’m not having to eat dog food or skip any medications yet.
The problem is that every time we begin to get things right, the progressives always want to increase the size and scope of government putting us back in the hole.
uncleFred,
I have the same reservations about the mortgage deduction, but I’ve seen a few comments elsewhere saying that getting rid of it in one swoop with today’s housing situation is probably too disruptive. The commenters prefer a phased-in elimination. If the plan is serious, I could go with that.
Beverly: yes, he had a scare, but is recovering and posting (a little bit) at his blog now. He promises more articles to come about what he went through.
Ed Morrisey reports on a conference call with Paul Ryan about the Perry plan. Ryan says the option of flat vs status quo taxes is meant to allow time for individuals to adjust to a new tax structure. He also says that once you choose the flat tax, there is no switching back.
I love it that we are talking about meat other than RINO meat these days.
Thanks for clarifying Scott.
Like others, and being a small consumer, I really prefer a consumption tax. I also think that is the fairest form of tax. Being a little selfish I would also favor more user fees, e.g. school fees on those using schools. (It really rankles to see the mini-Taj Mahals that are required to educate, or not educate, children today and which I am expected to help fund. The schools I went to would be condemned out of hand now.)
Sorry to hear about VandDerleun’s problems. He is a treasure
Expat it comes down to dollars in hand. A 9% personal income tax means that you don’t need the mortgage deduction.
gcotharn – the problem is that the post card doesn’t help if you need to do your regular tax prep first to see if the “flat” tax is a better deal. Further the notion that a flat tax, even an optional flat tax, is materially easier to pass than 9-9-9 is pretty dubious. The entrenched interests in the congress will fight like dervishes to protect their ability to sell tax favors, I’d rather fight it and end up with a no exemption 9-9-9 than get a fungible flat tax, which is not flat, and have to have the fight again in two decades.
No mention of FICA. This proposal represents a 35.3% tax on wages. (Somewhat flat 20 + paycheck FICA + hidden employer FICA)
I call that a fail. It’s as if he didn’t really think through the tax code.
Spending reductions are awesome, but they’re not properly part of a *tax* proposal. They should be part of a *budget* proposal. Focus, Rick, focus!
With the deductions, it isn’t a flat tax after all. It is a politician applying an appealing label to fool the public. Orwell has a cousin in Texas.
Foxmarks:
We need to put in place some mechanism that links budgets and taxes so that we don’t end up in the all to common situation that we trade tax increases for spending cuts and the cuts never happen (or the other way around). Perhaps that they get written and negotiated separately, but both spending and tax policy are voted on together. They both pass or neither passes.
uncleFred said: We need to put in place some mechanism that links budgets and taxes […]
That sounds like some kind of Balanced Budget Amendment to me. I haven’t been in favor of it in the past, believing that you can’t legislate responsibility.
But I’m changing my mind. The Founding Fathers recognized the need for divided government and separation of powers. They recognized the need to strictly enumerate the powers of the national government. And isn’t it AMAZING that they felt the need to include the 10th Amendment in the Bill Of Rights, to ensure that all power not specifically vested in the national government were retained by the States, or by the people.
Of course, Congress has since ceded its authority over lawmaking to the Executive Branch, culminating in Obama’s czars. And the meaning of the enumerated powers has been stretched beyond recognition. And the 10th Amendment is, these days, utterly ignored. The same could happen with any balanced budget amendment.
But I’m changing my mind. A direct link, as uncleFred said, between revenue and spending could be considered necessary, based on our experiences with an ever-expanding national government. I now believe it would be useful to have that link be Constitutional. Perhaps you could require a 2/3 vote to depart from it in both houses of Congress, to deal with national emergencies, such as war. If you can’t get 2/3 vote in both houses, then I guess it’s not really an emergency, is it?
They could still play nasty budget hide-the-money tricks such as was done with ObamaCare. But it would still help. Heck: As a prior year’s actual data resolves any discrepancy between its budgeted (guessed) revenues and expenditures, you can require this year’s budget to deal with any such discrepancy, thus putting an even better corrective into place; at the risk of adding complexity to such an amendment.