The American Spectator : Lessons From the Lame-Duck Tax Rates Battle

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Lessons From the Lame-Duck Tax Rates Battle

By Ron Ross on 1.6.11 @ 6:09AM

The last honest Democrat left standing may be Robert Reich.

In the recent debate about ending or prolonging the Bush tax rates, the Democrats subtly staked out a new fiscal doctrine -- not increasing tax rates costs the government money and increases the deficit.

What we heard ad nauseam from President Obama and congressional Democrats was that keeping the Bush rates in effect for those earning more than $250,000 will "cost" the government $700 billion in lost revenue over the next ten years and increase the federal debt by the same amount. That supposedly is the difference in revenue generated by the top income Bush rate (35 percent) relative to the Clinton era top rate of 39.6 percent.

The Bush tax rates had been in effect for seven years and represent what had become the status quo. Although they were originally passed with an expiration date, that hardly makes them unique in any meaningful sense. Since tax rates have been increased and decreased numerous times in the past, no one could assume they are ever permanent, whether they have built-in expiration dates or not.

The top rate decreased under President Reagan (from 70 percent to 28 percent), increased to 31 percent under President G.H.W. Bush, increased to 39.6 percent under President Clinton, and decreased to 35 percent under George W. Bush.

If we are going to calculate revenue lost when tax rates are not increased by 4.6 percent, why stop there? Following the Democrat logic, it "costs" the government money whenever taxpayers are allowed to keep any of their earnings. Accordingly, any tax rates below 100 percent on everyone are costing the government money and adding to the national debt.

This Democrat position reveals a profound difference in fundamental beliefs between liberals and conservatives. For liberals, the basic premise is that all wealth is, or should be, the property of government or the collective. That's their starting point.

The basic conservative belief is that wealth belongs to those who created it. Conservatives believe tax increases damage the economy. Conservatives are much more concerned about the health of the overall economy than they are about the well-being of the government.

The Democrats desperately need to believe that all wealth rightfully belongs to the government. They have a bottomless pit of wonderful things they want to spend the money on. Their avarice defines their ethic. Big-government Democrats have a desperate need for money. Wealthy people have money. Ergo, go get it!

The Democrats implicitly assumed that, for those earning more than $250,000, the Clinton era tax rates are "the way it's spozed to be." They projected federal tax receipts under the assumption that those rates would be reinstated. In anticipation of that revenue, they spent the money. In fact, they spent a lot more than that. As usual, the Democrats created their own problem by spending revenue before it existed. They literally could not wait to get their hands on your money. Republicans, of course, were not innocent bystanders in this shameful behavior.

One interesting inconsistency the Democrats maneuvered themselves into was their less than total rejection of the Bush tax rates. The rate structure they wanted was a Bush/Clinton hybrid, what you could call a political Prius, or maybe a genetically modified rate structure. They wanted the Bush rates for incomes up to $250,000, and the Clinton rates thereafter.

The Democrats have maintained for years that there was absolutely nothing good about anything George W. Bush did while he was in office. We were told that the only people he cared about were his rich cronies. Apparently that was not the whole story.

Something else revealed in the tax rate debate is that many on the left, including some in Congress and the administration, despise anyone earning high incomes. You can almost see their eyes bulging when they say "tax cuts for millionaires and billionaires." The left want these people not just to provide additional revenue, they want them punished. They apparently consider upper income tax rates as more of a fine than a tax. Exactly what millionaires and billionaires are guilty of is never specified.

Democrat politicians will rarely admit what they really want top income tax to be. It would be great if they could be up front about how much progressivity they want in their heart of hearts. They don't want to tell us that, of course, because they are well aware of how politically devastating it would be.

One exception is Robert Reich, the former Secretary of Labor under President Clinton. In a recent column he advocated a top rate of 70 percent. He did not specify how much it's costing the government not to have a 70 percent top rate.

The expiration or retention of the Bush tax rates has not been permanently resolved. The rates have been extended for two years only. This brief extension adds to the climate of uncertainty that is one of the biggest obstacles to economic recovery. Furthermore, in two years or less we will again be treated to a new round of class warfare.

Republicans were able to buy time for the full range of the Bush tax rates, but they had to hold the country's entire middle class hostage to do so (according to President Obama). They need to be well prepared for what we know will happen two years from now. If the economy is recovering by then, they will not be able to use the argument that you can't increase taxes in a recession. There are numerous reasons why raising taxes is a bad idea and the Republicans better be ready to articulate them.

About the Author

Ron Ross Ph.D. is an economist who lives in Arcata, California. He is the author of The Unbeatable Market. Reach him at rossecon@gmail.com.

Letter to the Editor View all comments (58) | Leave a comment

Bill Hussein O'Stalin| 1.6.11 @ 6:45AM

It would also seem prudent to make the case that a government that needs all your money is no longer a government, it's a dictatorship.

Brian Mc| 1.6.11 @ 7:05AM

Income Tax is socialism under cover of darkness.

Dan Hirsch| 1.6.11 @ 9:14AM

Brian, c'mon, "darkness"? Darkness like the darkness you find at high noon on the equator on the 21st of June, mebbe.

It's not even socialism - Dr. Walter Williams calls it right, 'taking money from someone at the point of a gun, is THEFT!'

If you think "point of a gun" seems strong, answer me this, who shows up, pointing what at you when you try to get back into your property after the IRS has locked it up under a tax lien, with no hearing?

If you don't know, it's local police or armed IRS agents. And they don't point pencils, laptops, or iPhones, they point 9mm automatic pistols, at the very least.

Wake up!

Nolite me conculcare!
Don't tread on me!

Brian Mc| 1.6.11 @ 9:48AM

I don't know about you but, when it comes to the Federal Gubmint, I feel like a mushroom. As far as the "point of a 9mm" goes. I'll stick to my 1911A1 Colt Mark IV Series 80 resplendent with Hornady XTP 250 JHP...! Just a tad more stopping power. After that, I'm screwed but as Dean Martin quipped in "Rio Lobo", "There may be six of you, but you're first".

Last of a Dying Bread| 1.6.11 @ 11:10AM

We need to impose a flat tax! The Progressive Income Tax is inherently communism and is written in Marx's Manifesto. Why should people you don't work and add to the productivity of our economy, be given everything. You get what you earn, go out and work. If you work enough to make over 250k, you rightfully earned it and the Gov't should not be allowed nor needs to take more from them because they have more. There should not be forced charity, charity is something that comes from the heart. If those with more want to give more, they can but should only do some voluntarily.

C.C. Ng| 1.7.11 @ 12:23AM

Flat Tax is Good. What you earned, what the tax will be. However, if the economic situation is not good, maybe Government do not have enough income to help the public. Let's try our best to pass the bad situation. The world will be better. Use the USB Wireless adapter to access to the internet. Stay at home, spend less and wait for the good day.

adammc| 1.7.11 @ 12:33AM

Many of you are missing the point---as usual. Brian Mc is onto something attacking income tax though.

Personal income tax should be zero. Zilch. Nil. Nada...

The federal government has the right to regulate commerce. This is an important role that costs much more than most people realize. It is essential for a strong economy...and it should be paid for BY the commerce itself. Simple AND efficient.
Our fuel taxes used to pay to maintain the roads. In the mistaken name of "lower taxes" the cost of fuel taxes has not gone up as the costs of maintaining the roads has. This hasn't resulted in lower taxes. What has happened is now the roads are paid for in part through personal income taxes. The burden was simply shifted around and now there is little connection between the cost and benefit.

There should be a direct link between the cost and the benefit. This is what Appleby is getting at with elections on April 16th, but it gets lost in all the complaining about taxes.

The problem isn't the AMOUNT of taxes it is the lack of connection between what is paid in taxes and what is bought.

The US hasn't actually paid all its bills in over 40 years so anyone who thinks we can cut enough out of the budget to not only balance THIS year but also pay off 40+ years of debt is full of it. It is a lie, and when you pretend it will work you are helping to destroy this country further.
There are things worth paying for. Freedom isn't free. Neither are police and fire services, a (somewhat) functional judicial system, or a (halfway) decent education system. I have a company located here, but that does a lot of international business. I have seen how other countries work and how they don't. There are no taxes in Somalia so those of you who don't like paying can move there and see how you like it.
I want to pay MORE in taxes than I do but have them actually linked to the things of value. I want to pay NO income tax, but will pay increased business taxes, import duties, much higher gas prices, food prices, and prices of goods. A flat screen TV should not be $500. Do you know how much it costs US in taxes to maintain the ports, customs, infrastructure and roads that allows walmart to import that TV from China? US taxpayers foot the bill for protecting the cargo, getting it where it needs to go, the safety costs, the environmental costs, the infrastructure costs. If the true costs of that TV were linked to the TV then it would cost $3000, not $500, but then WE would have a CHOICE. I could choose to by the $3000 dollar TV or NOT. Yes, everything would cost more, but think of how much more money you would have to spend (Did I mention income tax of $0). Personally, I would probably end up paying more than I do now, but the choices of what and how would be mine. Every time a parcel tax comes up I vote to INCREASE my taxes to support schools. Every single time, and we still are not paying enough to support our schools. I would vote to raise property taxes higher right now. The next town over has much lower property taxes and worse schools. People have a choice, and that is what this is really all about.

Appleby| 1.6.11 @ 7:23AM

Do away with withholding. Make Election Day April 16th.

Problem solved.

Dan Hirsch| 1.6.11 @ 9:14AM

You betcha!

Brubaker| 1.6.11 @ 12:04PM

You're exactly correct. Withholding makes payment of federal income taxes far easier. If everyone had to write a check for the full amount on April 15, they would quickly realize just how much is being taken from them.

As it is, huge numbers of people intentionally have too much withheld from their earnings so they will receive that wonderful "gift" from Uncle Sam, the refund check, after they file their tax return. Apparently they don't even realize that they've given the government an interest free loan.

Nick| 1.6.11 @ 12:29PM

Appleby,

Good point!

This is why the Republicans screwed up last month.

They should've demanded that the tax cuts be made permanent or make their expiration date a month before the 2012 elections.

Then, in 2012, they could've demanded they become permanent. The democrats wouldn't let taxes be raised a month before the election.

The GOP has no idea how to negotiate.
Nor, how to think strategically.

Lawrence Boccardi| 1.6.11 @ 7:25AM

For my entire (long), adult life, I have struggled with the idea of the "progressive" income tax. If everyone paid their fair share, that being the same percentage of income, we wouldn't any longer have a spending problem. The guy working in the hardware store or my deputy town clerk would not tolerate the wild spending of the last 10 years. But, that genie is long out of the bottle, no?

Bill| 1.6.11 @ 7:54AM

Flat tax for all. Everyone who enjoys the benefits of this country needs to have some skin in the game. The tax needs to be capped. If people are not paying taxes they should not be allowed to vote.

Ned| 1.6.11 @ 10:58AM

I'm not sold on the flat tax, but I know for damn sure that we are in an untenable position when more than half the people in the country pay NO income tax at all, and often receive a "refundable tax credit" (that's Dim longhand for "welfare")... if you live in these United States, and have income, you need to be contributing SOMETHING. Give it back as welfare if we must, but then call it what it is, NOT a "refundable credit"...

I've long maintained that everything that is wrong with this country in the modern era is the result of government intrusion.

Squarehead| 1.6.11 @ 8:02AM

"You can almost see their eyes bulging when they say "tax cuts for millionaires and billionaires." The left want these people not just to provide additional revenue, they want them punished. They apparently consider upper income tax rates as more of a fine than a tax. "

Put yourself in their place. They went to the finest Ivy League schools. Along with their political science professors, they have come up with the solutions to all the world's problems. They are the smartest people on Earth, yet others have realized far greater financial success in their lives than they have. The only logical explanation is that these wealthy boors have cheated to attain their wealth, or at the very least, benefitted from a rigged system. So of course, the government should penalize them with higher taxes.

Dan Hirsch| 1.6.11 @ 9:21AM

Squarehead!

When you put them in their place, you forgot the most important thing - those guys got rich and I had to work my butt off to get elected to this lousy office and I can't even take cash. It's ENVY!

Doubt me? Take a good look at Bill and Hill!

Arkansas to Yale back to Arkansas, of to DC then Chappaqua. I don't remember any palatial Arkansas Clinton plantation, other than the Governor's manse. These two are envy's poster children!

Look at what they do, not at what they say!!!

Melvin| 1.6.11 @ 8:16AM

For one thing, everyone should pay income tax. Do away with all the credits such as the earned income, child care credit, and the like.
My son has a wife and they have four children. He files every year, pays no income tax, and I couldn't believe what he received back from the government. He receives something back around $7000.00.
Now I have to be quite honest here. I to received this when I was a younger man and the children were young, but I still paid income tax. My withholding status was single and none even though I was married with children.
OK, by doing this the government would receive more revenue, and in turn Congress would be in hog heaven and spend this additional revenue and we would be right back at the same problem we are at right now.
The government could take 0 of everything we made and it still would not be enough. The more they collect the more they spend.
It is not that the revenue needs to change it is Congress's appetite that needs to change.

JP| 1.6.11 @ 8:25AM

Melvin,
You hit on a very touchy subject. If a "fair tax" is to be implemented, many families will see thier tax bill go up. The EIC increases under Bush gave large families who earn less than $70,000 substantial money back. Add in mortgage deductions and the sums increase. A flat tax with no deductions would initially be a hard sell. But, I think people would buy in when they realize they more the earn they more they retain.

Melvin| 1.6.11 @ 8:56AM

Oh! Absolutely JP. Fair Tax is the way to go. People need to realize with the Fair Tax it is not the magic bullet that will cure everything, but it sure as hell is a good colon cleanser, tax wise.
The Fair Tax is a damn good way to start, to revive this economy.
The point that I was making above is. Whether or not it is the Fair Tax, or making everyone pay taxes, is that before any of this is to take place, it has to start with the attitude of the politicians.
We could have the best and most fair tax system in place in the world, but if those who reside in the Halls of Congress don't relinquish their thirst for power and control, then the best and fair tax system is doomed.

Brian Mc| 1.6.11 @ 10:11AM

It's a perfect tax just so long as someone else is paying it...i.e. cigarettes...?

Pancho Wilson| 1.6.11 @ 8:29AM

If the govt. can single out one group of Americans, the uninsured, and force them to buy insurance, then the govt. should also be able to single out another group of Americans, wealthy Democrats, and force them to pay higher taxes. Let's start with 95%.

Dan Hirsch| 1.6.11 @ 9:26AM

Pancho, no, no, no! You tax one group at 95%, they'll spend it all and then go looking for somebody else's wealth. They will get to you eventually. You also establish the principle of taxing people for their party affiliation, effectively making political beliefs prosecutable!

Think about it some more, we need good ideas!

ACynic| 1.6.11 @ 8:32AM

Why doesn't that liberal progressive hypocrite Robert Reich send 70% of his income to the govt. if he thinks it is such a great idea? No one is stopping him. My guess is that he uses every trick in his tax accountant's bag of tricks to keep as much of his money as possible. He needs to lead by example; words are cheap.
Folks, don't hold your breath waiting for this to happen.
And yes, we ALREADY LIVE IN A TYRANNY and it is time the ruling elites are removed.

winterhawk| 1.6.11 @ 8:39AM

There are not now, there never have been and, there never will be anything known as an "honest" democrat. I'm sorry but,.

MikeD| 1.6.11 @ 8:47AM

One fact missing from this discussion is the 'bonus' the dems see in the progressive income tax: power to reward and punish. That is the core of the whole progressive income tax as envisioned by dems and other lefties. They HATE anybody who has more than they do; and; as "Squarehead" stated, they all went to the best ivy league colleges (That somebody ELSE most likely paid for!) and are obviously incredibly smart; much smarter than us dunces out here in "Fly-over" land; so we absolutely MUST have stolen our money. Combine that with the dems socialistic conviction that everything belongs to the government. ie., them; it all makes perfect sense in their warped (alleged) brains.

The solution has been proposed: Flat tax where everybody pays the same rate; with no thieving earned income credits which is just a fancy term for stealing money from the person who earned it and giving it to somebody the dems are trying to buy a vote from.

Stormy| 1.6.11 @ 8:56AM

"You can almost see their eyes bulging when they say "tax cuts for millionaires and billionaires." The left want these people not just to provide additional revenue, they want them punished."

Yes, you have very wealthy people like Nancy Pelsoi, et al, leading the charge. It's not just wealthy people they despise, it's the "other" wealthy people. In truth, they do not despise wealthy people at all. They just want other people's money, but keep your hands off their money.

Dan Hirsch| 1.6.11 @ 9:40AM

What class does Nancy Pelosi think she's in?
You could waterboard her for a week, somewhere's about Friday, she'd give up that she was upper middle class. This in spite of her family's income - they do very well, thank you - Yahoo "pelosi's husband company"

Most of us with normal incomes, (sub $250,000 to use Barack and Joe's number) have a hard time distinguishing $1,000,000 annual income and $100,000,000 million income. When you get to $1,000,000 income, it's pretty easy see the difference - you start wanting 'better' stuff and find that there's still you cannot afford.
Result in many, envy.

Also for those with the big incomes, they already have a flat tax!

Maybe the democrats might want to set different tax brackets for one, ten, hundred, and thousand million incomes. They'll have to figure out how to capture income, because these birds usually can configure their earnings so that they don't look like income to the brilliant IRS...

Don't tread on me!
Nolite me conculcare!

Anthony| 1.6.11 @ 9:10AM

You may call Robert Reich the last honest Democrat (I think that's an oxymoron) however, being "honest" does not absolve Reich of his leftist economic idiocy.

Pete| 1.6.11 @ 9:33AM

Their entire governing methodology is based on insisting on the absurd, so why not play the game? By keeping tax rates where they have been, we are "saving or creating" untold millions of jobs, stoping polar ice cap melt, etc....

Petronius| 1.6.11 @ 9:47AM

The thing that was left unsaid here is the Liberal definition of "fairness". That means, "nobody should have more than me." Yesterday I got into an argument with the local president of my union. When I told him I want to become rich, he told me he wants to kill them all, and then walked away. He doesn't give a rats rear that the "rich' industrialists he hates are our "customers" who pay the postage and keep the carriers on the streets delivering mail, after which he can collect dues and sit in his office. When he railed about unemployment being inflicted on "the people" by "the rich exporting our jobs", I pointed out that they did so because of all the imposts and expense his government piled on to business. He wants exporting capital and outsourcing outlawed.
Democrat is really a missnomer. We should call them Densocrats because they not only lack maturity, they're proud of it.

ACynic| 1.6.11 @ 10:09AM

Union leaders are thugs, criminals and just a legal version of organized crime. They could care less about workers. They care about mantaining their union leader perks, salary, benefits and car.
Never, once, in the history of the USA has a union leader suggested that they, THE UNION, own and operate a business; with union managers and employees. NOT ONCE IN AMERICAN HISTORY. They much prefer to use intimidation and terror to impose their will over those who own and operate businesses.
Unions spend millions doling out bribes (campaign contributions) to the communist democratic party, but they cannot spare one F^^K^N penny to actually own an operate a business. Just like the mafia, they prefer to use extortion and terror to impose their will on others. And in the long run, their strategies simply decrease the number of jobs, and guess what, the union leaders could give a S^^T.
Frankly, unions should be illegal and they should be treated like organized crime. And if not for the bribes they pay the elitist, radical left wing communist-democrats, they would be.Unions are criminal organizations, run by thugs and crooks, that screw over their own workers, while the union CAPOS line their own pockets.

Jack| 1.6.11 @ 11:56AM

Well Said! They are largely responsible for the lack of jobs along with irresponsible Gubmint regulation!

George S| 1.6.11 @ 10:07AM

If Reich were honest, he would say:

"The progressive income tax is fundamental to the objectives outlined in the Communist Manifesto. With a progressive tax, the bourgeoisie is humbled after his income is confiscated. The income is redistributed to the middle class, thereby draining them of their desire to be productive and look to the state for their happiness. When the state inevitably fails to meet that happiness, as a result of the lowering productivity of the middle class, the fury of the middle class is to be strategically redirected to the bourgeoisie. The class struggle is now in operation. The ensuing revolt readies the middle class for dictatorship of the proletariat. The wealth is now, in the minds of the middle class, in the hands of its rightful owners but State owns the means of production and all private property is abolished, an absolute necessity in keeping a populace in perpetual dependence on the State, and to give the State the moral authority to punish based on the good of the collective. The Individual has ceased to exist."

BrokeLT| 1.6.11 @ 10:10AM

What the Repubs seem to be missing is that there is a HUGE pool of dis-affected voters out there who'd gladly support any sort of tax cut if they get a job out of it!
Seems pretty simple; tax non-productive money-changing income like credit default swaps, exotic MBSs, derivatives and so on and cut taxes on productive investments in companies that hire people such as manufacturers, small business.

Leveut| 1.6.11 @ 10:55AM

"This Democrat position reveals a profound difference in fundamental beliefs between liberals and conservatives. For liberals, the basic premise is that all wealth is, or should be, the property of government or the collective. That's their starting point."

That isn't really the starting point, it's the basic premise. But it should be stated more clearly.

The basic, fundamental principle of Democrats, the left, the Supreme Court (for the most part, with only a few exceptions any more), the Congress, and most Republicans is this: You have no rights or property except that which the government allows you to have, because all rights are granted by the government and all property belongs to the government.

Paul from SA| 1.6.11 @ 11:05AM

Perhaps they can set federal tax rates based on what state you earn your money. After all, $250,000 is a lot of money in Texas, but not in NY or CA.

Old Soldier| 1.6.11 @ 9:31PM

$250k is the middle of the middle class here in NJ. Tax my income at 70% and I'll quit my job immediately. I'm nobody's slave.

youfamissim| 1.6.11 @ 11:09AM

100% taxation is slavery. The desire by Democrats to take 100% in taxes is in keeping with a long line of Democrats who argued to keep slavery, segregation, Jim Crow, and other laws where the targeted people were were controlled and abused to benefit the Democrat politician and his cronies. Place responsibility for paying taxes upon the wage earner and we would all see the end of Progressivism. That is all it will take. End employer with holding. Make every citizen responsible for writing their tax check to the IRS. I predict most will not write the check - the money will be spent. When revenues shrink precipitously, the government will not be able to enforce the tax laws upon tens of millions who can't or won't write that tax check. When tax payers confront missing government services, the potential tax payer must choose - keeping the money, or paying the tax. Ending employer with holding will bring down the government faster than any other plan. Government must then adjust to the revenue shortfall. That's a debate I want to see. Lets make popcorn.

Redstateboy| 1.6.11 @ 11:26AM

in my opinion.. the greatest single example of the hypocrisy of the Left is John Kerry. Net Worth? 264 Million dollars. He builds a 7 million dollar Yacht for himself in New Zealand!!!! then parks it in Rhode Island !!

LiveFreeOrDie| 1.6.11 @ 5:55PM

Off topic but I nominate Al Gore for 2nd place. Spending millions on a beach house while at the same time giving speeches about the oceans rising and flooding the coastal areas, flying around in his private jet scolding everyone for not driving a Prius etc.

Eric Cartman| 1.6.11 @ 11:37AM

You would think that after viewing Democrat after Democrat demanding higher taxes, and Reich's comments about 70% rate that the Republican's would have at least ONE commercial pointing out what the Democrats think about taxes - or ANYTHING for that matter. But no. Nothing. Zip. Nada. Not a peep. Can someone tell teh Stupid Party higher ups they need to hammer Democrats day in and day out.

Redstateboy| 1.6.11 @ 12:12PM

in my opinion the reason you're not hearing anything about Reich's pronouncements is he's to be considered a discredited, crackpot Liber-ul economists.

Seek| 1.6.11 @ 11:50AM

Robert Reich long has advocated aggressively graduated income tax rates. He's simply more open lately than normal. From his Berkeley redoubt I suppose he can afford to be. Back in the late 90s, "Locked in the Cabinet," his political memoir of his years as Bill Clinton's Labor Secretary, he denounced Clinton for being way too conservative. That tells you all you need to know.

Anthony| 1.6.11 @ 12:07PM

Who knew Reich had a sense of humor? That's a great title for a memoir from a dimunitive guy like lit'le Bobby.
I suppose it's more dignified than "Locked in Clinton's Humidor", or, " Going up in smoke with Bill & Monica".

Wayne | 1.6.11 @ 12:34PM

Its typical Democratic Newspeak. Under the same logic a 20% off sale in a department store is a new 20% expense. It would throw accounting on its head.

But also, how is keeping the tax rates the same a tax cut? The Republicans just need to not let the Democrats get away with Newspeak and call them out on it every time.

I am in Oregon, and we heard the class warfare argument to raise the taxes on the rich, and what happened? The number of rich dropped 20 percent and the tax revenue dropped. Again the GOP must ALWAYS counter these class warfare arguments. They need to say that the tax base needs to be broadened instead so that everyone has a stake in the cost of government as well as the benefit.

VBMax| 1.6.11 @ 12:41PM

I don't see anyone discussing a national sales tax in lieu of income tax. A Fair Tax may be better than what we have now but it still penalizes production. With a sales tax the individual has more control over how much he pays. I'm interested in other views on this. Why is this not the way to go?

jill| 1.6.11 @ 1:12PM

What is needed is solutions to the problems. The tax code is to big. I believe in the Fair Tax, where everyone gets their whole paychecks and everyone gets a prebate of $124 per adult and $64 per child.
The prebate should be sent to a private insurance company by the government. Then everyone would have insurance and we could get rid of medicare, medicaid and the VA. The employer or the state could then help pay for the deductable if they cannot afford to do so.

Social Security would be where 6% goes to the current enrollees and the other 6% goes into TIPS bonds based on 4 or 5 percent interest thereby saving the 1.2 trillion dollar transistion fee.

I told of plan to by congressmen and he said it would never work because it made to much common sense.

RD Martin| 1.6.11 @ 2:24PM

Clearly the Democrats are comfortable taking the debate up during the 2012 election as they extended current rates only through 2012. Considering they could have extended through 2013, an off election year, and chose not too, one could make a case of the Democrats being very comfortable re-engaging in the class warfare rhetoric to the point...they think they can and will win the argument in an election year.
Beware - they are preparing for a whole new level of class warfare rhetoric. We better be able to define and defend the principle behind why people are entitled to what they earn and not the government. If Democrats control this discussion or are allowed to control the discussion, most Republican politicians do not have a good enough understanding to defend the issue. Beyond Paul Ryan, Michelle Bachman, Jim Demint, those able to correctly and adequately defend are few and far between.

Who Knows?| 1.6.11 @ 2:37PM

There is a spectrum from 100% to 0% concerning taxes.

In Japan, when they were in the midst of do-or-die civil war times, when a samurai came upon a beggar, it was off with his head!

In Buddhist monasteries, a basic rule is a day without work is a day without bread.

Of course, these days we are more civilized, but the right idea is the RIGHT idea!

Essential, then, to understanding, is that it is the one who DOESN’T work for at least his or her minimal subsistence, to the best of their ability, who is lacking self respect.

Such “poor” people never grew up, and despite being able to receive enough created goods that OTHER people worked to make, their USUALLY overly large bodies belies the truth that they are just babies at societies tit.

So, truly, just as welfare reform was most beneficial to those “babies” as takers, while also relieving productive members of society from working for them, the same fact is applicable to ALL people who take more than they make, when it comes to all forms of taxes.

Also, a progressive tax system, ITSELF, is inherently unfair.

If a rich man and a poor one buy anything that has a percentage tax added to it, say a potato for a $1 with 5 cents added, surely fairness demands they both pay the same added nickel.

Why should, in fairness, she pay more, just because she has more?

I long ago realized that socialists and progressives, etc, at their core of being believe they ARE you.

They use the extreme idea that society is ONE to, in their own mind, justify such a taking from one “PART” of the societal “body” and shifting it to the most needy “part”.

What a TAKING party!

the realist| 1.6.11 @ 2:57PM

Ron Ross's disingenuous framing of the Bush tax cuts won't wash. Their expiration date was an explicit part of the the deal which allowed them to be passed. Now that the expiration date has arrived, you can't just say that the Bush tax rates have become the defacto status quo. No, what is the now the status quo is the rates which existed before the Bush tax cuts were passed.

Ross is just throwing dust into the eyes of the easily confused.

cary loos| 1.6.11 @ 4:10PM

I think that the bigger story is how the big lie was exposed. The dems railing against tax cuts for rich people seem to have forgotten that expiring
the Bush cuts would have hit a lot of little people.
Ergo, the Bush cuts, through all these many years have allowed a lot of moderate income people to
keep more of their own money. I think that they now know this to be true.

Oldefarte| 1.6.11 @ 9:59PM

The answer to the last sentence's question is that THE MONEY BELONGS TO THE INCOME EARNERS, NOT TO THE GOVERNMENT. The government does NOT earn money/income, and only receives same through the collective [and charitable giving] of taxpayers. Since the government did not earn the money, they are not entitled to it in the strictist sense. In the extreme, THE GOVERNMENT IS STEALING THE INCOME OF ITS EARNERS BY TAXING SAME, and are thus committing an immoral and illegal act by its taxing. The income earners are voluntary giving their taxes to government in order to pay for/fund its operations; and these earners can choose [since it is their money] how much to give, and to increase or decrease said tax amount. It is a voluntary decision on their part, and government has to accept whatever amount the earners so choose to give. Government is akin to an employee of the taxpayer, and if said taxpayer chooses to increase, decrease or not change the tax amount to its government/employee, that is their/taxpayers' choice. A similar private sector employee who works for a company must either accept their supplied wage or leave their employment, but cannot dictate to their company the amount of their wage/salary. The Democrats' socialistic game being played is to constantly increase taxpayers' taxes paid in order to fund their/governments' ever increasing welfare payments to the indigent population of the country. In turn, the Democrats demand that these indigents vote for Democrat politicians in return for their/indigents' received government supplied welfare benefits. Since taxpayers are the only population members that earn income and are therefore only able to provide tax payments to the government, these Democrats constantly want to increase taxes of same earners to pay for the governmental benefits being provided to indigents. It;s nothing more thatn the ROBIN HOOD SYMDROME, of robbing from the rich/income earners to give to the poor/indigent receivers of governmental benefits!!!!!!!

Yosemeti Sam| 1.7.11 @ 12:00AM

" ... Something else revealed in the tax rate debate is that many on the left, including some in Congress and the administration, despise anyone earning high incomes...."

Including Oprah and Cosby?

Sonny| 1.7.11 @ 5:16AM

I'm sorry, but this lead on statement, "The last honest Democrat left standing may be Robert Reich.", is about the most false and asinine and moronic statement, I have ever read..!!
The statement should have read, "Robert Reich will be the Last Liberal Democrat left standing, as there is no such thing as an Honest Liberal Democrat."

roadmaster| 1.9.11 @ 9:08AM

Charles Krauthamer, who I usually consider brilliant, also bought into this bogus "$700 billion loss" to the treasury by the extension of the Bush tax cuts.
Why cannot we get across the absolute PROOF that lowering taxes raises gubbermint revenue? It works every time it's tried - Coolidge, Kennedy, Reagan and Bush all did it.
Unfortunately liberal congresscreeps look at ALL tax revenue as THEIRS, to spend and disperse as THEY see fit, buying enough votes to keep themselves in their feathered nests.