Magic Dollars

Okay, here's what I can't figure out: If government spending doesn't stimulate the economy, why will defense spending cuts hurt it? Is there something about defense spending dollars that circulate through the economy better than infrastructure spending dollars?
Republicans (and some Democrats) are lining up to find ways around the defense spending cuts that they themselves voted to implement should the Supercommittee fail, which it has. Funny, but I don't see the same ardor to preserve the domestic spending also set to be cut by the triggers. Is this because defense dollars are magic? Or is it because defense dollars have a different trickle-down effect: money goes into campaign coffers, then trickles down into defense contracts? Gee, I wonder where the money in the first half of that equation came from?
On a related note, why is it Republicans (and some Democrats) won't allow the payroll tax cut to be extended without offsetting spending cuts that will hurt a lot of the people who receive the payroll tax break? Could it be because this tax cut only affects those making $106,000 or less? I don't remember them being this aggressive about a tax cut being revenue neutral when the Bush tax cuts for the wealthy went into effect, or when they were extended last year.
Please correct me if I'm missing something.

Double or Nothing

Among the primary arguments put forth for minimizing or doing away with corporate and/or capital gains taxes is the concept of double taxation. “That money is taxed twice,” proponents say. “Once at the corporate level, then again at the personal or capital gains level.”

We all know the word that describes this: bullshit.

First, money cannot be taxed. Money is inanimate and abstract. It has no inherent value aside from what we agree it’s worth. (This includes gold, by the way, so let’s not start that bogus Gold Standard argument unless we want to include the world is flat, the sun revolves around the earth, and dinosaurs co-existed with people. Oh, wait…maybe I shouldn’t include that last one.)

People are taxed. Therefore, since the Supreme Court and Mitt “The Twenty Percent Solution” Romney have declared corporations to be people, corporations should pay taxes. If they are to have all the rights of people, let them shoulder the same responsibilities. For now, whenever a conservative complains about how many people don’t pay any income tax at all, it should be understood they include General Electric in their condemnation.

Class Warfare. Again.

Republicans have their kickers in knots because noted Socialist Warren Buffet has advocated raising taxes on the super-rich. “Class warfare!” is the rallying cry from Fox News and its ilk. (Is there any way for “ilk” to sound complimentary? Certainly not when used in conjunction with “Fox News” or “Tea Party” or “child molester.” Not saying Fox news and the Tea Party are child molesters. I just tried to think of the worst thing I could call someone, since “Fascist” lost all meaning when Obama was declared one by Lyndon Larouche’s acolytes.)

Apparently the Right believes class warfare can only happen by pitting one class against the rich. This is not true, though that is traditionally how it has been done, primarily because the poor do not have anything anyone else wants. Ah, but this is the Twenty-First Century, where Brave New World is as passé as “See Dick run” and Ayn Rand has replaced Thomas Jefferson as the paragon of rational political thought. Conservatives have found one thing the poor have that’s worth taking.

Money.

Taking money from people who don’t have any is not just hard to do, it’s hard to advocate. We’re not quite ready for the Al Swearengen approach of “hit them over the head, take their money, and throw their bodies in the creek,” though we’re headed down that slippery slope. No, for this we have to resort to a tried and true conservative meme: these people are screwing you, and we’re your only friend.

Conservatives have a revered tradition with this approach. For years blacks were the enemy, taking white jobs, sleeping with white women, and looking better with shaved heads than any white man. Immigrants had their day, but vilifying them has lost its sheen since the economy became so bad even Mexicans don’t want to come here anymore. Now it’s the poor’s turn, except no one can say “let’s take money from the poor” without invoking Dickensian images even from those who think a Dickensian is someone whose work pants aren’t Levis or Wranglers.

“How can we take money from the poor and get the middle class to think it’s a good idea?” Oh, how this must have tortured many a conservative soul late into many sleepless nights. Then some 60-watt bulb noticed that almost half of all Americans don’t pay income tax, and boom! Inspiration.

All real Americans hate freeloaders, and in tough times everyone (except the rich) are expected to contribute. Never mind that most of those non-taxpaying goldbricks are seniors living on Social Security who don’t draw enough benefits to pay tax. Most of the others either make so little money the standard deductions wipe out their Gross Adjusted Income, or programs like the Earned Income Credit or Child Tax Credit bring them under the line. (Note: Republicans repeatedly vote for these programs, and have expressed no interest in undoing them.)

While the poor don’t always pay income tax, they do pay Social Security and Medicare taxes. (If they’re lucky enough to have jobs.) These are regressive taxes, especially Social Security, thanks to the cap, which means there are poor people in this country who pay no income tax, yet still pay a higher percentage of their wages in overall taxes than do the rich.

Conservatives have no sense of irony. They fail to realize a flaw that is implicit in their argument: we now live in a country where almost half the people don’t make enough money to pay income tax.

Does that bother anyone but me? Of course, I’m one of those who still thinks the banks and financial institutions were responsible for the current mess, and refuses to blame the public workers and unions because it was their unreasonable salary demands and lack of work ethic that caused mortgage-backed securities and credit default swaps to lose their (perceived) value and become exposed for the Ponzi schemes they always were, thus precipitating the Great Recession of 2008. Silly me.

The State of the Nation

Thanks to the Beloved Spouse for providing this link on income distribution, taxes, and trends in America. The comment section is available for any Tea partiers and "cut taxes but not any spending that will make a difference" conservatives.

I'm not counting on much of a response from those quarters.

Who Pays?

Alan Simpson and Erskine Bowles have made their initial recommendations on how to cut the deficit. The legislation that comes of this, if any, will look very much different, but what they presented may serve as a blueprint, especially for those areas where there is not a hard and fast constituency.

The way it looks now, I'll take a beating. They recommend eliminating the home mortgage interest deduction, and my employer-provided health benefits--which my employer has reduced each of the past few years--will become taxable. I don't like it, but I can live with it. This country rode the gravy train for too long, and even though i wasn't one of those who overextended himself and defaulted on a credit card or mortgage, I understand everyone will have to pitch in.

Just so long as everyone does.

I don't mind if my tax obligation increases twice as much as someone who makes half as much. Hell, I don't mind if it increases more than twice as much if that guy's still raising small children, with the million expenses kids accrue. I just want to make sure the guys who make twice what I make--or ten times, or a hundred times--get nicked, too.

Conservatives complain about the "redistribution of wealth" every time a new tax is proposed. What has been done since 1980 with every tax cut? Those, too, have been redistributions of wealth, though in the other direction, taking money away from those who didn't have as much and giving it to those who already had more.

I'll pay my extra share willingly, so long as those above me on the income ladder pay theirs. If not, then I'm going to get belligerent about this. Enough's enough.

Abso-fucking-lutely

From Ezra Klein's blog in The Washington Post (read the entire post for proper context):

As Miller says, this sort of politics lends itself nicely to thinly sliced marginal tax rates. Right now, the top tax bracket begins at $373,650 and extends into infinity. But there's no reason you couldn't have a slightly higher rate starting at $500,000. And then a bit higher at $1 million and on and on...