Mitt's tax plan: Cut taxes for the rich, raise them on everyone else

[Politico]

Class warfare is ugly.

Ideally, everybody would pay the same percentage of their income regardless of how much or how little they earn (with the exception of a negative income tax for the poor, of course). No more deductions, loopholes, etc. A flat percentage of your income goes to Uncle Sam to fund what we've elected our representatives to ensure is provided to the public in the form of public goods.

If everybody saw their taxes go up or down by the same percentage of their income, I think we would see a convergence towards the tax rate and amount of government services that the vast majority of people actually want. In the process, we would minimize government abuse/waste while constraining the growth of government spending.

[Politico]

Basically Romney is hoping that he can rely on people's general ignorance in how the tax code and budget works. He offers specifics on the goodies (tax cuts and more military spending) and gets vague on the pain (budget cuts and deduction cuts). Then waves the magic "resulting growth" wand over it all.

In a world where people think the budget can be balanced without cutting any programs that they like (because cutting PBS and int'l aid should be enough to wipe out the deficit right?), Romney figures he can get away with it.

Yes, right now. Things will change once Romney gets in.

Obviously the nation needs a fiscal enema much like we needed a monetary enema in the late 70s/early 80s. It is the only path to real recovery. The alternative is a downward decline for four more years.

[Politico]

A graduated tax rate can be justified on the basis of diminishing marginal returns, an economic concept that applies to all forms of income and consumption. To take an extreme example, you could have an extremely poor family that earns just enough to eat, clothe, and pay rent at the poorest possible subsidized housing rate. Any more than a 10% tax means that the family can't afford rent, has to miss a meal, or perhaps can't celebrate Christmas. This is a heavy blow, and it means a lot to these people.

On the other hand, take the likes of Bill Gates. Gates has a huge charity because he knows he has more money than he could ever possibly spend. Even if he tried to spend, the biggest house in the world, an army of servants, the biggest yacht, the biggest plane, the most sumptuous food and entertainment, parties every single day, he could not possibly spend even a small fraction of his fortune. So he gives it away. 10% for him is nothing.

Now, if taxes need to be raised, would it not be worth it to raise Bill Gates' tax from 10% to 15%, and leave the barely-scraping-by family's tax at 10%? Than to raise both Bill Gates' and the barely-scraping-by families' tax reach to 14%? The latter proposal (the flat tax) would actually generate far less revenue, despite the fact that average tax rates under it are higher than under the progressive tax. The progressive tax can absolutely be justified on sound economic and moral grounds that have nothing to do with class warfare.

Obviously there needs to be an exception for the poor. The flat tax rate would need to only apply to those who are at some level above a reasonable threshold. If the rate is at a level that is deemed too high by a strong majority, people will elect representatives who will lower the rate accordingly. The most important benefit of this scheme will be the elimination of the psychological delusion that government intervention has only benefits and no costs. This delusion is bankrupting many parts of the world, and we need to prevent the contagion from spreading to America. Nothing is more important.

[Politico]

No one is saying government intervention "only has benefits" and no costs. Everything has a cost.

I know you have a firm appreciation of costs/benefits, but a strong plurality, if not majority, of our fellow citizens really do see government intervention as having only benefits without costs (This should not come as a surprise when one considers that over half of the population does not pay any federal income taxes whatsoever). IMHO, it is a costly delusion that can only be remedied with a real flat tax. Rolling out a flat tax would induce a recession, but it would pay off not long thereafter (a sort of fiscal version of Volcker's shock therapy, if you will). The alternative is far worse than my short-term pain for long-term gain.

[Politico]

(This should not come as a surprise when one considers that nearly over half of the population does not pay any taxes whatsoever)

No, that is a malicious lie.

Over half of the population does not even work, so how is it a malicious lie?

[Politico]

First of all, even those who do not work pay tax. Even little children pay tax on their toys, or their parents do. Every single person in this country who has reached voting age has at some point seen, firsthand, the cost of government.

Obviously I was talking about federal income taxes and federal spending. Furthermore, if we give tax dollars to somebody in exchange for their existence and they spend part of those tax dollars on taxes, is that person really paying taxes? If somebody receives bundles of benefits funded by "other" people's taxes and pays occasionally a few dollars/cents on their consumption goods, do they really gain an appreciation of the costs of government spending?

There is a mentality that is emerging that says government basically has benefits with little to no costs (or at least little to no costs to those individuals who want more and more spending). This bankrupt idea is going to bankrupt America if we do not eliminate the mentality one way or another. I firmly believe this, and I firmly believe the only solution is a real flat tax, at least when it comes to the federal level (I support allowing states to tax/spend whichever way they choose, but there should be no bail-outs for the fiscally irresponsible governments).

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Of course not.

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Volcker's objective was to slay excessive inflation, and his plan worked. A flat tax will slay excessive public debt and return America on a path towards real growth with freedom and individual responsibility leading the way.

[Politico]

Then why has Obama overseen the slowest spending growth in decades?

We've been running deficits in excess of $1 trillion every year under Obama, so of course the rate of growth is lower than previous administrations. We saw a massive spike in the wake of the financial crisis, and nothing has been done about this spike over the past four years. We need to get the deficit back under control soon before it is too late.

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We are talking about the federal government, not federal, state and local governments. The reason why the public sector is decreasing is because states and local governments need to balance their budget, and the vast majority of state/local governments are closing their gaps via spending cuts that exceed any increases in taxes.

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A flat tax will cover the costs of Medicare/Medicaid if the flat tax is at a necessary level. If people deem they are unwilling to pay those costs, the programs will need to be cut to a degree, or spending elsewhere in the budget will need to be cut. The bottom-line is that nothing is free, and everything eventually needs to be paid for one way or another. The only fair way to figure out exactly what the majority of the public wants is with the adoption of a flat tax rate that is set by representatives who were elected by the people to carry out their bidding. A flat tax will act as a sort of mechanism that ensures public debt gets under control and never goes out of control ever again. On the whole, people will get the level of government spending that they are willing to pay for; there will be no more delusions of free lunches and no more free riding.

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The adoption of the flat tax will need massive spending cuts coupled with shifting spending decisions onto the states wherever and whenever possible.

This is a pill that is difficult to swallow, but sometimes that kind of medicine is what cures you. When the alternative is dying, there really is no alternative.

[Politico]

(This should not come as a surprise when one considers that nearly over half of the population does not pay any federal income taxes whatsoever)

No, that is a malicious lie.

Over half of the population does not even work, so how is it a malicious lie?

I assume over half the population makes purchases subject to sales taxes, for instance.

Fixed.

Context is lost on some folks, I guess...

[Politico]

The adoption of the flat tax will need massive spending cuts coupled with shifting spending decisions onto the states wherever and whenever possible.

So why do you favor Mitt who calls for massive spending increases?  A buck is a buck even when spent to buy guns instead of butter.

Mitt knows the difference between politics and economics. I believe that Mitt, for better or worse, is our best only hope in achieving fiscal sanity before the end of the decade. If we do not have our house in order by 2020, meaning we need drastic changes over the next four years, I cannot even imagine what type of poor sight we'll be.

[Politico]

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The spike in the deficit is mostly due to falling revenues, which was tied to the recession.

TARP necessitated a massive increase in borrowing. Obama's stimulus added to the pile. Obama's Obamacare can only be projected to add further to it.

Obviously we've seen a fall in overall tax collection, but the deficit is largely the result of largesse. The federal government has become morbidly obese, and needs to be turned into a lean, efficient machine that focuses upon law/order, national defense and BASIC infrastructure (e.g., interstate highways and scientific research, not funding broke public union pension plans that could not possibly be saved without turning the private sector, including private unions, into the Santa Clause of public unions).

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Yes, which can be done via tax cuts. There is no reason why a flat tax cannot end up being a net tax cut on the whole for the population if it is coupled with spending cuts on WASTE. The ensuing boost to confidence can increase real investment in real things that consumers want, not what special interests want.

Where you and I largely differ is you buy into the notion that government can stimulate the economy with spending. I realize that most of the federal government is inherently inefficient. Feeding the beast simply makes the economy more inefficient as funds, whether they are taxes or borrowed funds, are moved from the efficient private sector to the inefficient public sector.

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Cutting taxes while cutting spending on waste is a net benefit for the economy. The economy becomes more efficient, growth ensues, the pie becomes larger, etc.

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How do you think the interest on debt is going to be serviced down the road (we're not all dead in the long-run)? The only way it can be: Increased taxation on the private sector either explicitly or implicitly (i.e., seigniorage).

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There is no way to test this hypothesis, so this claim is nonsense.

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You're being intellectually dishonest. Yes, we have nearly as many workers in the federal government now as we did in 1967. But do you wish to compare the numbers to 1996, back when Bill Clinton declared the era of Big Government to be over? That number would be 1.934 million. This number went down from 1996-2001. What happened in 2001? 9/11, of course, necessitating an increase in workers in Homeland Security. The number of federal workers was relatively constant from 2002-2007. Since Obama came into office, we've seen about an 8% spike in the federal workforce. This is coming at the expense of the private sector.

Unlike some folks, the people in the private sector know what deficits mean: Tax hikes in the future. They are tampering their spending and investment accordingly in anticipation of this. We need to restore confidence by eliminating these anticipated tax hikes. We can do so with a flat tax coupled with spending decreases. It is possible to cut taxes, decrease spending, and boost confidence in the private sector enough to avert a severe recession (although a mild one would be unavoidable in the short-run). The end result, how things will look four years from now, will be a lot better than four more years of the past four years.

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If the lack of confidence in the stimulus shows anything right now it's that people do not want higher taxes later to pay for more government spending now, especially if it is going to be wasted on special interests. Apparently this notion will not sink into the heads of many people in Washington until after the Republicans dominate the election...

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No, we will not die, but we will end up like Europe if we continue with four more years of Obama. Eurosclerosis is pretty much the economic version of "dying" (Or becoming a has-been who is a shadow of their former self).

[Politico]

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No it didn't. Thanks to the Obama administration's policies, what was originally projected to cost $700 billion only needed $416.1 billion disbursed, and of that, $350 billion has already been paid back, leaving only about $66 billion left outstanding. Less than one-tenth what the Bush administration thought it would cost (http://www.treasury.gov/initiatives/financial-stability/briefing-room/reports/tarp-daily-summary-report/TARP%20Cash%20Summary/Daily%20TARP%20Update%20-%2007.25.2012.pdf).

You'll have to excuse me for using TARP as a catch-all term for not just the assistance given to the banks, but the takeover of Fannie Mae and Freddie Mac along with the bailout of AIG. All of these events happened in late 2008 and they caused a massive spike in the deficit at the time (I believe the deficit doubled from 2007 over 2008, and much of it was increased borrowing for these events).

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The CBO can tell me that the sky is red, but that does not make it so. You cannot add an entitlement for poor people and expect it to lead to lower spending, thereby reducing the deficit. That is like telling a fat person that eating pizza everyday for the rest of their life will decrease their intake of unhealthy fats.

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Have you ever stopped and wondered why Obama's federal stimulus funds did not stimulate the economy to the degree Keynesian theory would anticipate? I'll give you a hint: Special interests. Go do some digging, my friend. You may not like what you uncover.

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The deficit has been over $1 trillion for each and every single one of Obama's years in office. I was not a fan of Bush, but the deficits on his watch were sustainable; these deficits are not. Obama has no plan to address them other than massive tax hikes. Obama ought to owe up to the fact that his plan is the same plan that Walter Mondale had for America: Massive tax hikes.

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That post is not science. It's finance masquerading as economics, and it's dead wrong.

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If the government borrows from the private sector and transfers it to various states so they can find clever ways to prop up public unions and pension funds that made promises that cannot be kept, those are real resources that could have been put to use in a productive way creating tangible goods/services that consumers want that were instead wasted on special interests. This is precisely what happened to a large degree, and it's why the stimulus did not stimulate the economy as predicted by Keynesian theory.

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Public unions and their servants in the Democratic Party.

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Not if it is coupled with spending cuts, and causes a real multiplier effect in the real economy.

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If you want to see the difference between increases in government spending versus tax cuts as a way of stimulating the economy and all that entails, compare the 1970s to the 1980s. The differences could not be more stark. We are better off today than we would otherwise be because of the adoption of tax cuts as a better, more efficient way of stimulating the economy. Tax cuts return income to the efficient private sector to spend as they see fit. Economic decisions and power are dispersed to millions of consumers/producers, rather than being made out of a centralized Washington hierarchy that cannot possibly know how to efficiently allocate resources given the immense complexity of the demands of the aforementioned millions of consumers/producers.

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Tax cuts have nothing to do with 2008. 2008 would not have been a big problem if commercial banking and investment banking were separate as was the case before Clinton repealed Glass-Steagall. Allowing investment banks to go belly up is not a threat to the money supply; allowing banks that engage in both commercial/investment banking to fail would have led to a massive decline in the money supply for obvious reasons. That's why what's done was done.

If there is another financial crisis, separation of commercial banking and investment banking will inevitably be restored. The public will demand it, both from the left and the right. The banks know this, so I would say they will likely be more prudent in the future and a repeat of 2008 is unlikely. The problem is that in 2008 they knew they could be reckless and still be bailed out, so we should not have been surprised when they did exactly that.

On a related note, a big problem was the government implicitly forcing banks to give out loans to people who could not possibly payback the loans. Government programs and the poor decision to separate commercial banking and investment banking are what ultimately led to 2008, not Bush's tax cuts.

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Low taxes coupled with unsustainable deficits causes most everybody to anticipate massive tax hikes down the road. Confidence and spending is lowered. We need low taxes and fiscally responsible spending.

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Bill Clinton is an infinitely better president than Barack Obama, but he had the good fortune of being president during the emergence of the Internet and all that entailed. Policy had little to do with the good times of the 1990s. The tax increase of 1993 had absolutely nothing to do with it. Getting spending under control, as he did in 1995-onward, did help.

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The plans submitted by both are meaningless. Everybody knows that Obama has a strong desire to raise taxes if he gets re-elected (he will not cut spending just like the Republicans will not budge on no new taxes); if he cannot do it with tax hikes because of a Republican Congress, he'll put in a new Chairman of the Fed who will do it via seigniorage.

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You've definitely been drinking the Kool-Aid hardcore the past few months, I see. The interest rates will only go back up once inflation goes back up. If you tax the interest earned before inflation is taken into account, which is precisely the case, you're basically transferring real value from the efficient private sector (which produces the real goods/services that consumers choose freely) to the bloated bureaucracies that produce/consume goods/services that taxpayers are forced to pay for via taxes. To a large degree, we transform market diversity into government conformity. I thought we were discussing economics, not finance/accounting.

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You're conveniently ignoring the fact that federal workers earn more than their private sector counterparts who do equivalent work. This was not the case decades ago when the government was seen as the employer of last resort. In other words, the secretary who pays taxes in the private sector is seeing a portion of their income (and therefore some of the fruits of their labor) transferred to a secretary in the public sector who gets paid far more to do equivalent work. Do you think that is fair, or will lead to efficient allocation of resources?

When Bill Clinton declared the era of Big Government over, he actually cut the federal workforce and confidence in the economy increased afterward. There is no reason to believe that similar cuts today would not have the same effect on confidence moving forward.

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It's actually an 8% increase over four years.

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Sorry, but it's our turn now...

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The root of that problem is the belief in excessive government intervention.

[Politico]

Beet, I cannot be bothered wasting my time responding to each point in your post. You're grasping at straws by defending $1+ trillion deficits. Numerous businesses not being able to adequately borrow because the federal government is borrowing too much is not a good thing. Go ask Bob Rubin and Bill Clinton. Not every business needs to deleverage. The government cannot spend borrowed funds better than America's entrepreneurs, the people who have created so many goods/services that have enhanced our standard of living.  Yes, the government can take from the private sector in the form of taxes, turn around and re-spend it in the private sector, but that does not necessarily lead to an efficient allocation of resources. Take a look at Solyndra (and god knows what else; the Romney Administration will uncover all of the boondoggles soon enough).

Economics is not about numbers on ledgers; it's about resource allocation in a world of scarcity. Government intervention alters incentives, creates negative (sometimes positive) spillover effects, and produces deadweight loss. With Obama's reliance on overwhelming levels of spending and excessive regulation, his version of government has created a toxic environment for the private sector. Businesses, who create the vast majority of jobs in America (always have and always will), are overwhelmed by uncertainty and malaise. Good intentions do not make up for poor results and unintended consequences. The problem with the $820 billion deficit is not that it was too small; it's that it was not allocated properly. We would have been better off just dumping $820 billion into the coffers of scientific research. Seriously. I mean, doing so surely would have produced something more remarkable than this failure of a stimulus.

Everybody on here should refer to Taylor's analysis of the stimulus. Here is a mainstream report:

http://online.wsj.com/article/SB10001424052970204138204576600630985154132.html

[Politico]

Nor will I respond to your post point by point.

I will make a few minor points- first of all, what you linked to was not a study, not really even a "mainstream report", as you put it- it was an opinion piece. Although the WSJ is certainly reputable and Taylor is reputable, the piece itself consisted only of a series of stylistic representations of historical events with no quantitative founding whatsoever.

This is a political forum, not an economics forum, so I posted a mainstream report ("opinion piece," if you insist) which ties in nicely with Taylor's paper on the stimulus (which shows the failure of stimulus spending from both Republicans and Democrats):

http://www.stanford.edu/~johntayl/JEL_Taylor_Final%20Pages.pdf

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Volcker's shock therapy slayed the inflation beast, preventing runaway inflation from destroying this nation, but Reagan's fiscal policy had a lot to do with the subsequent recovery as argued in the piece.

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It was a mirage as evidenced by the ensuing stagflation.

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Yes, we're in a liquidity trap. Borrowing rates are down for all, but that does not mean that  borrowing by large firms is taking place at a level that enables an adequate level of private investment. My point was that government spending is crowding out private investment. Case in point, we're almost three years into the recovery yet private investment is nowhere near the level it was before the recession:

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Many large businesses are hoarding cash and not hiring because of uncertainty about future costs (both explicit and implicit) and the ability to borrow in the future.

Furthermore, small firms represent 99.7 percent of all employer firms and employ half of all private sector employees (http://web.sba.gov/faqs/faqIndexAll.cfm?areaid=24). Many of these firms are having immense difficulty borrowing right now. While it is true that they do not explicitly compete with the government for loanable funds, they implicitly do so when you consider the opportunity cost facing commercial banks whenever they are faced with providing loans to a small firm (not to mention the high degree of risk aversion among banks right now as a result of this toxic environment; the president has failed to inspire confidence in the nation the way he did on the campaign trail in 2008).

Lastly, a recent poll by Gallup of small business owners found that two of the biggest problems they face today are regulatory burdens and lack of credit availability:

http://www.gallup.com/poll/150287/Gov-Regulations-Top-Small-Business-Owners-Problem-List.aspx

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It baffles me that you continue to act as if this debate is taking place in 2009. This is 2012. Clearly the Keynesian promises did not pan out as predicted by theory. The underlying reason is because government is inherently inefficient outside of its realm of specialty as espoused by Adam Smith (i.e., law/order, defense, and BASIC infrastructure). It is time to change course towards a more market-based approach. We cannot afford to have an entire lost generation. The Obama Economy is sowing the seeds of an entire lost generation that cannot find employment, and older generations fear for the future of their offspring. We must return towards real growth and prosperity, not continue on the path towards Eurosclerosis. We must return to American greatness, not embrace European-style decline.

[Politico]

Beet, to pick at one of your points at random, unfortunately rank is a pyramid, so there are far more "overpaid" folks at the low end, than underpaid folks at the high end. And if the higher end folks are underpaid, why don't they quit, and get a job commensurate with the market for their skill set?

Because, in many cases, they are not underpaid or they would do as you suggest. People who suggest they are not overpaid generally ignore their implicit pay (i.e., their pensions). Mind you, there are some people who are underpaid and stay out of a sense of duty. This is especially true in matters of national defense and law/order, areas of the economy that clearly require government intervention.

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I agree with this.

[Politico]

Why do people hate tax cuts for the rich

Because they want to free ride off public services/transfers provided by taxes funded by rich people. They think rich people owe them something rather than thinking that all of us should have to contribute the same percentage of our income towards public endeavors.

[Politico]

Why do people hate tax cuts for the rich

Because we are already running a budget deficit over a trillion dollars.

But if you cut spending and taxes, then the budget will be balanced, providing you cut more in spending.

(Common sense)^2

[Politico]

So, where do you get the >$1.4 trillion to balance your budget? Hint: You wont get there without hacking Social Security, Defense, and Medicare/aid - which no politician is willing to do (heard anything about the Ryan budget lately?)

Wait until January 20, 2013. We can get there while ensuring obligations towards Social Security and Medicare are met. Tax reform is essential in achieving this result, of course.

[Politico]

Why do people hate tax cuts for the rich

Because we are already running a budget deficit over a trillion dollars.

But if you cut spending and taxes, then the budget will be balanced, providing you cut more in spending.

We are running a $1.4 trillion dollar deficit. That means we collect $1.4 trillion less in taxes than we spend. You want to cut taxes (revenue). So, where do you get the >$1.4 trillion to balance your budget? Hint: You wont get there without hacking Social Security, Defense, and Medicare/aid - which no politician is willing to do (heard anything about the Ryan budget lately?)

Stegosaurus, don't bother trying to reason with him. He's a bigger troll than Politico and plays dumb to deny common sense.

Quite amusing being called a troll by somebody with Mondale in their username. You do realize Mondale is second only to McGovern in the quest for title of "biggest loser of them all," right? Heck, I'd put McGovern above Mondale if only because McGovern is a war hero.

[Politico]

So, where do you get the >$1.4 trillion to balance your budget? Hint: You wont get there without hacking Social Security, Defense, and Medicare/aid - which no politician is willing to do (heard anything about the Ryan budget lately?)

Wait until January 20, 2013. We can get there while ensuring obligations towards Social Security and Medicare are met. Tax reform is essential in achieving this result, of course.

Yes, because Mitt Romney being in the White House will make new revenues magically appear...

Tax reform will create job growth, causing new revenues to appear over time. Of course, the biggest part of the solution will be transferring spending off the federal books and onto the states. Allowing the states to decide what is worth paying for and what is not will pay huge dividends for economic freedom.

[Politico]

Why do people hate tax cuts for the rich

Because we are already running a budget deficit over a trillion dollars.

But if you cut spending and taxes, then the budget will be balanced, providing you cut more in spending.

We are running a $1.4 trillion dollar deficit. That means we collect $1.4 trillion less in taxes than we spend. You want to cut taxes (revenue). So, where do you get the >$1.4 trillion to balance your budget? Hint: You wont get there without hacking Social Security, Defense, and Medicare/aid - which no politician is willing to do (heard anything about the Ryan budget lately?)

Stegosaurus, don't bother trying to reason with him. He's a bigger troll than Politico and plays dumb to deny common sense.

Quite amusing being called a troll by somebody with Mondale in their username. You do realize Mondale is second only to McGovern in the quest for title of "biggest loser of them all," right?

Actually it would be Goldwater or Landon, but nice try...

http://en.wikipedia.org/wiki/List_of_landslide_victories#Presidential

Also, just because people voted for Reagan (who began the process of bankrupting this country and selling it piece-by-piece to the corporate class) doesn't mean his ideas had any merit. Or that he had any ideas for that matter...

Al Landon last mattered, what, when Hitler was alive? He ceded the title to McGovern back when he died, whenever the heck that was.

Goldwater's 52 EVs are a bit more impressive than Mondale's performance. The only reason Mondale even won Minnesota is because Reagan allowed him to. Had Reagan been mean-spirited, he would have spent more time and money in Minnesota.

[Politico]

Why do people hate tax cuts for the rich

Because we are already running a budget deficit over a trillion dollars.

But if you cut spending and taxes, then the budget will be balanced, providing you cut more in spending.

We are running a $1.4 trillion dollar deficit. That means we collect $1.4 trillion less in taxes than we spend. You want to cut taxes (revenue). So, where do you get the >$1.4 trillion to balance your budget? Hint: You wont get there without hacking Social Security, Defense, and Medicare/aid - which no politician is willing to do (heard anything about the Ryan budget lately?)

Stegosaurus, don't bother trying to reason with him. He's a bigger troll than Politico and plays dumb to deny common sense.

Quite amusing being called a troll by somebody with Mondale in their username. You do realize Mondale is second only to McGovern in the quest for title of "biggest loser of them all," right?

Actually it would be Goldwater or Landon, but nice try...

http://en.wikipedia.org/wiki/List_of_landslide_victories#Presidential

Also, just because people voted for Reagan (who began the process of bankrupting this country and selling it piece-by-piece to the corporate class) doesn't mean his ideas had any merit. Or that he had any ideas for that matter...

Al Landon last mattered, what, when Hitler was alive? He ceded the title to McGovern back when he died, whenever the heck that was.

Goldwater's 52 EVs are a bit more impressive than Mondale's performance. The only reason Mondale even won Minnesota is because Reagan allowed him to. Had Reagan been mean-spirited, he would have spent more time and money in Minnesota.

Yeah except Goldwater won ~38% of the popular vote, Mondale ~41%.

Go tell Al Gore that the popular vote matters.

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As opposed to four more years of struggle for middle class families under Obama? The last four years have not been hunky dory for America's middle class families, folks.

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Romney's tax reform plan would be a net cut for all but the wealthiest. The elimination of deductions will disproportionately affect wealthier Americans.

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You are the one who accused me of being a troll. I did not provoke you. I simply responded in kind without resorting to name calling (And I have merely pointed out that Mondale, NOT YOU, was a loser...I actually tend to like your posts, if you must know). In case you did not notice, I have put a lot of time and effort into contributing to the conversations in this thread.

[Politico]

Why do people hate tax cuts for the rich

Because we are already running a budget deficit over a trillion dollars.

But if you cut spending and taxes, then the budget will be balanced, providing you cut more in spending.

We are running a $1.4 trillion dollar deficit. That means we collect $1.4 trillion less in taxes than we spend. You want to cut taxes (revenue). So, where do you get the >$1.4 trillion to balance your budget? Hint: You wont get there without hacking Social Security, Defense, and Medicare/aid - which no politician is willing to do (heard anything about the Ryan budget lately?)

Stegosaurus, don't bother trying to reason with him. He's a bigger troll than Politico and plays dumb to deny common sense.

Come on Mondy, I'm not a troll, I'm just very, very right-wing.

Don't worry, pal. Some folks on here erroneously believe this is Diet Democratic Underground hence the accusations of "trolling" whenever somebody offers a right-wing point of view.

[Politico]

Tax reform will create job growth, causing new revenues to appear over time. Of course, the biggest part of the solution will be transferring spending off the federal books and onto the states. Allowing the states to decide what is worth paying for and what is not will pay huge dividends for economic freedom.

That's quite silly you think Romney would do any tax reform...

It will be the signature achievement of the Romney Administration, and a positive spillover effect will be the creation of millions of jobs in the process (obviously some accountants fear this change, but they're the only ones who will lose something with everybody else gaining immensely):

http://www.bakerinstitute.org/publications/Diamond-RomneyTaxReformPlan-080312.pdf

[Politico]

The Taylor article you linked is actually in the link that I pasted first-- it's the one study out of nine that didn't find a substantial effect from the stimulus. The other eight studies all found more effect.

I never looked at the link. Who said it had a positive effect? Future Nobel Laureates (like John Taylor)? I thought not...

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It does not matter. We are not back to pre-recession levels, which means private investment has not recovered. When it comes to any economic variable, every single one of them, we are not at the levels predicted by Keynesian theory in 2009.

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This simply reinforces the weakness in investment. Investment spending has clearly shifted from residential real estate into other forms, but it has not picked up the slack in an overall sense hence the overall investment levels being lower than before the recession. A key reason is the crowding out effect. The government is issuing more bonds than ever before, and confidence is dismal so people are seeking safety in hoarding cash and government bonds rather than making real investments in the productive sectors of the economy.

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This chart simply reinforces the above.

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Absolutely not. Domestic government bonds are "risk-free" in the sense that if the domestic government defaults, we have a hell of a lot more to worry about than getting returns. People are seeking shelter and they see it in the form of government bonds. It does not mean they think the government is best suited to invest rather than the private sector.

We have a toxic environment where confidence among businesses and consumers is in the doldrums. The president's policies and rhetoric have not inspired confidence the way that the president did on the campaign trail in 2008.

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Most of the stimulus went towards transfers (the grants to states mostly became in-state transfers), not hiring people, as documented in Taylor's paper. Furthermore, the government is crowding out private investment (maybe not to an ENORMOUS degree, but definitely a significant degree), preventing greater hiring in the private sector.

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Fixed.

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The government can play a role just as it can play too much of a role, doing more harm than good in the process. Ever play on a basketball team with a "ball hog" who wasn't as good as he thought he was, let alone as good as the other four men on the team? The government should not be "that guy."

[Politico]

Come on, Beet. You can do better than quoting that goofball.