This map and accompanying discussion (via) should be more widely disseminated. As Kevin Drum notes, rural life is more expensive, and it is subsidized by city dwellers. Rural state Republicans used to know this, so they would often vote for pork-barreling blue dogs who were perceived as more effective in bringing home far more than their fair share of tax dollars. But in the past few years, they started to believe the Tea Party line that they were the last real Americans laboring under the oppressive yoke of elite urban taxation. They aren’t, and they ought to be reminded of that. When you have to start driving 20 miles to get to the Post Office, or a couple of hundred to get to the airport, then voters might start remembering who brings home the subsidies that allow unprofitable postal and air service.
Tax Policy
Who’s Taxing Whom?
Fair warning: what follows is a bit of a rant and contains nothing particularly new. But the fiscal follies of our overlords are unhinging me, and as misery loves company, I hope to share my derangement.
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I’ve been a little obsessed with light bulbs lately, as regular readers know. I continue to be dumbfounded at the depth, passion, and naked-mole-rat-stupidity of the GOP drive to ensure Americans waste money on illumination. Following a thought from one commenter, I’m bracing for the claim that bans on whaling are really an unconscionable assault on the liberty of the people to light their homes with oil lanterns.
But as I thought about the implications of the Republican House caucus’ relentless drive to undermine America’s energy security, I started to fixate on a penetrating glimpse of the obvious: the entire GOP approach to the federal government’s fiscal policy is a vast tax hike on most Americans.
That the GOPsters approach to policy will raise the cost of living in America is, I think obvious by this point: when you privatize public goods, by and large those goods cost more for the individual user to access. (There is a lot of detail obscured by that blanket statement, and certainly some instances where it might be otherwise, but the health care system (about which more below) is a familiar example of the basic problem, and there are many more.)
Republicans would say, I think, that cost isn’t the issue. Government shouldn’t pay for much that it does now and that individuals can make better choices about priorities and so on. They’d add that government musn’t pay for that which it can’t; that, to use a cliche repeated over and over again, that the government must behave like any household would, and not spend money it doesn’t have.
That last is nonsense, of course. I’m actually working on a next book that tells a grand story of fraud and deceit at the birth of the idea of government debt — and that tale turns on the ways that governments aren’t like households or small businesses.
For now, though, the point is that if you take the Republicans false metaphor at face value, then you see that despite the brave promises of “no new taxes,” the practical, household consequences of their actions add up to a huge stealth tax increase that differentially falls on to working people, the middle class, and the poor.
And yes, as noted above, I know I’m restating the obvious, but bear with me. Let’s take my lighting fixation for a spin. Recall that the energy efficiency standards that so offend the current Republican caucus* are predicted to save each American household $50 a year.
Now back to that bill-paying session over the kitchen table Republicans are so wont to imagine.
In the Integer-Based Community
I’ll give that unnamed Bush staffer credit.* It is possible to create an alternate reality — if only for a time — given the willing complicity of all those watching (and transmitting) the useful fantasies of the powerful. Just look at the success the Koch brothers’ subsidiary political arm, aka the GOP et al. have had in persuading so many that wealth transfers to the rich are the solution to all ills.
Hence the significance Bruce Bartlett’s entry today in The New York Times Economix Blog, in which the former Reagan, Bush I, Ron Paul and Jack Kemp policy advisor writes that, in essence, the entire Republican presidential field is lying about taxes to the American people.
He doesn’t quite put it that way — but he comes pretty close:
For years, Republicans have [said] …over and over again that taxes in the United States are exceptionally high and the primary obstacle to growth, and that a huge tax cut would do more to raise growth than any other policy.
For example, former Gov. Tim Pawlenty of Minnesota, a candidate for the Republican presidential nomination, has proposed reducing the top statutory income tax rate on individuals to 25 percent and abolishing the taxation of interest, dividends and capital gains. The Tax Policy Center estimates that this plan would reduce federal revenues by $8 trillion over the next decade.
Governor Pawlenty contends that unprecedented growth will result — to such an extent that there will actually be no revenue loss at all.
I am not picking on Governor Pawlenty; all of the candidates for the Republican presidential nomination support similar policies, and not one has criticized him for making outlandish claims.
Yup — that’s as card-carrying a GOP conservative (per commenter wvng below) stalwart as you can get, stating as fact (which it is) that the fundamental Republican position on tax policy is “outlandish.”
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Now this is, or ought to be obvious.
The Company We Keep
Looks like Sullivan isn’t the only one impressed with the “seriousness” of Ryan’s budget:
In other Palin news, it appears that Bristol Palin, who is uniquely unqualified to speak about teen pregnancy prevention issues (any one of the billion women across the planet who managed to not get pregnant as a teen would be more qualified), made a ton of money with her nonprofit. For her “labor,” she pulled in $265k, while they gave out 35k to teen pregnancy clinics. That’s probably how she was able to pay 172k in cash for a house in the Galtian paradise of Arizona. Just like average working people do every day when they buy their house with cash.
Why do I mention this? Because at $265 large, on top of all the other speakers fees and what else she “earned” last year, Bristol will be rewarded with a large tax cut under the very serious Ryan roadmap, Bristol will have a lot more money to not spend on condoms, while some poor working bastard will pay higher taxes and get kicked out of his health insurance because ACA was repealed and he has a precondition or can’t afford it on the meager vouchers he was given. The way God and serious people would want it.
They’re Not Even That Consistent
I like the general theme of Sullivan’s bit about the meaninglessness of labels with respect to modern Republicans. However, this is simply wrong.
Income tax rates are now lower than they were under Ronald Reagan and far lower than they were under Eisenhower. And yet it has become a Norquistian non-negotiable that no taxes can be raised at all on anyone[…]
Republicans will gladly increase taxes on poor people. Republicans will annul tax credits that favor the poor even faster.
You cannot predict Republican behavior with any single principle. Full stop. For one example, take Newt Gingrich (please). Or look at the Affordable Care Act. Orrin Hatch cosponsored essentially the same bill in the 90’s and defended it until the week when Obama embraced it as a compromise plan. Now he says it is worse than Hitler. Mitt Romney implemented the plan in Massachussetts, and it’s working great! Just don’t ask Mitt to defend his greatest achievement. He won’t. As another example, take any issue that Mitt Romney ever spoke about more than once.
True, virtually everything they fight for will make the rich more secure or subdue the not-rich, but not always, and certainly not if it means that they agree with something that a Democrat proposed first.
And there, my friends, is the main difference between Republicans today and the people Sullivan used to know and love. Once upon a time the GOP would gladly cross the aisle and work with Democrats to screw the poor. Now even that exalted goal must take a backseat to petty displays of spite by loud, stupid bigots like Richard Shelby, John Kyl and Jim DeMint. What was once a genteel agreement to slowly throttle the working class has devolved into a naked gibbering scramble for the bundle of fasces, and that just won’t do.
Grab Your Pearls and Smelling Salts
The Affordable Care Act had a provision requiring small business to issue a 1099 to every vendor with whom they spent over $600. This caused an outcry and the House passed a screwed up repeal provision, which the Senate will probably also approve.
Now that this odious regulatory burden is about to be lifted from the shoulders of small business, perhaps it’s time to mention a little fact that’s not often discussed–small businesses cheat on their taxes, a lot.
In the past few years, I’ve seen the following: A technology company owner who had his kids’ nanny on the payroll as an employee. A landlord using his business account to pay for supplies for a major home remodel. Numerous service providers who offer a discount for cash. And many, many SUV “company cars” driven by moms running errands.
There are plenty of small businessmen who pay their full honest share of taxes (I’m one of them), but let’s not pretend that the real reason that we’re repealing the 1099 provision of the ACA is “paperwork”. The ability to cheat on their taxes is just taken as a given by a lot of small businessmen. It’s sort of like the small business version of a farm subsidy.
Another Timing Question
Here’s another timing question that Steve Benen missed. Here’s Jim DeMint just a few months ago:
“I’m doing the job South Carolinians elected me to do, which is to review each bill carefully before it is passed, not after,” DeMint told McClatchy. “Only in Washington is it a radical idea to read a bill and know how much it costs before we agree to pass it. I’m not going to sit by quietly while big spenders try to secretly ram through bills that increase the debt and expand the size of government.”
DeMint’s aides said he’s not out to block all legislation and is focused on spending measures.
How on earth could DeMint and Pence offer commentary on the Obama budget already. Have they read the bill? Have they read the entire plan they are offering? Shouldn’t they “READ THE BILL” first?