Pondering a Possible Tax Increase
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In my ideal world, the >federal government >would do comparatively little. It would "promote the general welfare" by "providing for the common defense"... not much else.
So neither the North Koreans nor the Russians would invade. There would be no need for children to fight a guerrilla war outside Seattle during a "Red Dawn." Otherwise, there would be little for the president to do other than tell jokes at a Catholic dinner in New York once each year. >
But my vision of a small national government is not in America's immediate future, no matter how I might pontificate. >
I, like my fellow conservatives, have to make peace with a bloated national government. That does not mean I have to surrender my conservative principles. Yet, if I want to be a positive influence on national policy, I must think "outside the box" to bring conservative principles to the national discourse regarding the possible.
I must first realize that our federal government spends too much. Yet, much of what it spends is so politically sacred that there is no chance it will be eliminated from the federal budget. For those things, we need to either >raise revenue or borrow from China. And if these are my only two choices, I must reluctantly choose taxes.
But what taxes? Raise income tax rates? Cut rates and "broaden the base"? The latter is another way to say "raise taxes on lower-income-earners" And, while I might choose to "broaden the base" as a way of > giving more citizens some "skin in the game," I know that raising income tax rates on the 47 percent is "dead on arrival."
One alternative might be to raise sales taxes, not income taxes, and in doing so, level the playing field between Internet retailers and brick-and-mortar stores. Currently, many Internet sales are sales-tax-free. That is because a retailer collects sales taxes only if goods are shipped within a state or to a destination where the retailer has a store or office.
So if Internet sales do not originate in a state with a sales tax or originate in a state with a sales tax with product shipped out of state, then the seller is often not responsible to collect or pay a sales tax.
Technically, the recipient of the merchandise is supposed to pay a "use tax" to the state in which the recipient lives. In reality, almost everyone who buys goods on the Internet does not pay a use tax and is, therefore, guilty of tax evasion. In effect, we are a nation of use-tax cheats and do not even know it - although, to be fair, no state has an effective use-tax collection policy.
The result is that Internet sellers have a 5 to 9 percent tax and price advantage over brick-and-mortar stores. Congress could have the federal government collect from retailers and send to the states the use tax for the state in which an Internet customer lives.
Congress could then reduce aid to state and local governments by the amount it collects. The result of this "spending neutral" proposal would be a lowering of federal spending to state and local governments, while keeping those governments funded in the same amount as before.
This proposal would provide an additional bonus. It would return some control of state spending policy to the states. In practice, the federal government sets priorities for state spending and gives aid to states for spending on these federal priorities. This proposal would return some funding decisions to the states, each of which might have a separate priority.
Now, I am not a fan of raising taxes. I would prefer to cut spending on both social and defense programs to amounts well below the current unsustainable levels. Indeed, "we have a spending problem, not a taxing problem."
But the reality of life is that Americans voted in November to refrain from severe spending cuts and endorsed some tax increases. We have to live within that reality.
But within that reality there is opportunity. If taxes are going to be raised, perhaps there are taxes which can marginally benefit the economy. Perhaps there are ways to both raise taxes and cut spending - not as severe as that proposed by the "fiscal cliff," but with a positive economic effect.
Robert M. Levy is chairman of the Moore County Republican Party. Contact him at Law52@prodigy.net.
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Comments
kzowens 5 months, 3 weeks ago
Bob, Your thought process certainly wanders and is rather difficult to follow. It is a mystery to me why you even wrote the column. I get the feeling that you haven’t a clue what is involved in “promoting the general welfare” and “providing for the common defense.” Do you really believe that the average “47%” does not pay a fair share of taxes. Of course they do!! Are you suggesting there are alternatives to not increasing taxes on those making more than $250K? I have never understood why you and so many lower income workers in the Republican Party (or more appropriately—the Tea Party) think it is just fine that the people with the highest incomes should not have a greater tax responsibility than the lower 47. Maybe you rely on the babble of Rush Limbaugh—the de facto head of the Republican Party.
Toyboy52 5 months, 3 weeks ago
The problem is that the common defense is funded by the income tax and 47% do not pay for the common defense. Nor are social programs paid by the 47%. They all expect the upper 2% to pay almost all the tab and provide jobs with the money left over. At some point the 47% are "eating the seed corn" and left wondering why there is no new crop.
OldPilot 5 months, 3 weeks ago
The concept that the federal government should promote the general welfare by providing for the common defense, and not much else, ignores: 1) forming a more perfect union, 2) establishing justice, 3) insuring domestic tranquilty, and 4) securing the blessings of liberty to ourselves and our posterity. Apparently Levy doesn't understand the meaning of "We the People of the United States" and prefers "we the conservatives".
jonathan_poverud 5 months, 3 weeks ago
OldPilot, Mr. Levy and his ilk love the Constitution until some reads it too them.
I can only imagine the hollowing if Obama ordered the Army to shoot those who refuse to pay Federal taxes. George Washington did that during his first term.
pgericson 5 months, 3 weeks ago
I'm not sure if George ordered people to be shot; his sending of substantial numbers of troops to quell the whiskey rebellion - over the taxation of alchohol- was designed to avoid bloodsheed. I really don't get your point johathan since OldPilot is quoting from the Constitution.
jonathan_poverud 5 months, 3 weeks ago
pgericson, nice attempt to whitewash history. If the President sends armed troops to confront armed citizens in the 18th century he has given them permission to shoot. It is not like today where you have constant contact with the situation room.
pgericson 5 months, 3 weeks ago
I understand that jonathan: the point I was making was that he did everything to ensure that this would not be necessary by using overwhelming force. Moreover, the problem facing Washington was armed insurrection, not a simple refusal to pay taxes. Rising up against the government was the bigger issue. It would be if residents in Pinehurst formed an armed milita and marched on Raleigh to force a change in the law. :)
Toda 5 months, 3 weeks ago
"Americans voted in November to refrain from severe spending cuts and endorsed some tax increases. We have to live within that reality."
When will the TEA Patriots begin understanding the reality of who pays and who saves?
Toda 5 months, 3 weeks ago
So what's with the < > math symbols? They are a distraction and not academically correct.
JimHeim 5 months, 3 weeks ago
Bob, The 47% don't pay federal income taxes mainly because if you subtract the exemptions we are all entitled to, there's nothing left to tax. The 40 richest families in this country have more wealth than the bottom 200 million.
Tell me again why the poorest among us need to pony up to protect the wealth of that tiny group.
JimHeim 5 months, 3 weeks ago
By the way, Bob, if the federal government were to stop aid to the states, the very states who vote Republican would suffer the most. Your treasured red states are the nation's biggest moochers.
The_AnonymusProfit 5 months, 3 weeks ago
The_AnonymusProfits Grand Tax Compromise.
Ending of ALL tax deductions for ALL people and ALL corporations.
Across the board reduction in Federal spending by 5% Excluding Social Security Checks.
Elimination of taxes on SSI
Capital Gains tax reduced to 5%
0-10,000 0% Income Tax
10,0001 -30,000 5% Income Tax
30,001 - 100,000 10% Income Tax
8 100,001 - 500,000 15% Income Tax
9 500,001 - 1,000,000 20% Income Tax
10 1,000,001 and up 30% Income Tax
There ya go short sweet and simple.
clarabelle 5 months, 3 weeks ago
Holy Shi............... I actually agree with The_AnonymusProfit.............
The world really must be coming to an end!
packwilleat 5 months, 3 weeks ago
I got your and sweet........ repeal the 16th amendment. Done!!
fugitiveguy 5 months, 3 weeks ago
Obama is full of crap. Increasing taxes on the top earners is meaningless as far as debt and deficits go. Its just obama and the libs getting in a dig on the wealthy. Estimates that it would raise 88billion. The interest on the debt alone is near 400 billion annually. Each year the presidents budget has added more than a trillion of new debt.
fugitiveguy 5 months, 3 weeks ago
AP, I like it. I would eliminate all income taxes on overtime wages. If someone is industrious enough to work overtime, they should get it all. taxing the first 40hrs should be enough.
clarabelle 5 months, 3 weeks ago
southernpinesupperwestside - fugly is always complaining - typical republican - the only skill they ever master ...... sobbing!
Courseaire 5 months, 3 weeks ago
"...obama is full of crap..." really? not according to most americans that just voted to re-elect him president of the united states for another four more years! It just means that most americans are gullible and foolish.
clarabelle 5 months, 3 weeks ago
"Courseaire - It just means that most americans are gullible and foolish."
No - it means you are a typical conservative - stupid and braindead!
You are falling into the right wing looney classification more and more!
Courseaire 5 months, 3 weeks ago
CB - Not falling. I have been conservative my entire life and I must say it has served me & my family well. If you don't believe most americans are gullible & foolish, how do you explain the popularity of Reality TV and the voluntary tax program called the Lottery (just to name a few)?
AFCHIEF 5 months, 3 weeks ago
Clarabelle you are the one who is brain dead with their head up your A$$. Can you not do simple math when it comes to budgets. Lets say we tax all the rich like you want this nets you about $88 billion, so where do you find the other $900 billion to make up for all the overspending.
Middleman522 5 months, 3 weeks ago
Can Owens or Heim explain why Barry's radicals were running ads in English and Spanish, to get people to sign up for Food Stamps. Does it ever bother you that everytime there is a vote on taxes since Barry took over, there is also an extention of UNEMPLOYMENT handouts. When raising taxes on 5% of the population will only get you 1% of where you want to go, and it's all Barry talks about, what is it but CLASS WARFARE! Nothing else. A whole lotta noise about nothing, except creating more HATE!
buddysmith 5 months, 3 weeks ago
how about a cash co-pay on public assistance benefits?
JimHeim 5 months, 3 weeks ago
middleman, If you're eligible for food stamps (or the SNAP program for those not locked into the 1970s), you should sign up and use it. That's what it's for.
If you're eligible for Medicaid, it's the same thing. We have these programs for a reason and there's no point in keeping it secret.
JimHeim 5 months, 3 weeks ago
For those who point out that taxing the rich won't eliminate the deficit, you are correct. That's not the point. It's been shown that a marginal tax rate of 70% or so for the top 0.1% will stimulate economic growth that benefits not only the bottom 99.9% but the top earners as well. That's a worthy goal.
buddysmith 5 months, 3 weeks ago
Jim, you honestly believe that a 70% tax rate on 0.1% of the population will stimulate economic growth? Please explain how.
fugitiveguy 5 months, 3 weeks ago
Thats crazy talk even counting the fact that its Jim. Fact is, even if we had a 70% tax for the rich it would only be a matter of time before leftist loonies would again be banging the fair share drums.
fugitiveguy 5 months, 3 weeks ago
"For those who point out that taxing the rich won't eliminate the deficit, you are correct."
we've known that for some time captain obvious, it won't even cover 3 months of interest on the debt. The only reason Obama is pushing it is because it will further endear him to the dumb masses who hate the rich. Only mental illness would account for someone who takes pleasure in taking something from someone else just for the sake of doing it.
Thatcher 5 months, 3 weeks ago
I have to assume that since no liberal/Democrat here has called out JimHeim on his economic nonsense, that you either agree with it or don't know enough about economics to form your own opinion. Sad. Cheers!
fugitiveguy 5 months, 3 weeks ago
Thatcher21 minutes ago
I have to assume that since no liberal/Democrat here has called out JimHeim on his economic nonsense,
there is no diversity of opinion on the left, or either they refuse to voice it
Thatcher 5 months, 2 weeks ago
fugitiveguy-- You are correct. Cheers!
JimHeim 5 months, 2 weeks ago
TAP - Let us in on the numbers. How much revenue does your plan provide? How will it impact GDP? Will it raise or lower the deficit. Inquiring minds want to know.
Or are you just gong to pull the GOP trick of making vague plans and not letting us know the actual details?
JimHeim 5 months, 2 weeks ago
buddysmith - It works the same way that the 90%+ rate worked in the post-war period when US economic growth was astounding. It's a matter of encouraging financial growth. Someone with an income over $5 million (in 2012 dollars) would have an incentive to leave his money in the company (thus growing it) rather than taking the lump sum. Better to take it our a few million at a time and avoid the big hit.
Economic studies show that it works. Companies have access to more capital to grow and high-end taxpayers spread out their wealth accumulation. It's hardly a secret.
Thatcher 5 months, 2 weeks ago
JimHeim-- Please let us know what Obama's plan is to provide revenue, and whether it will raise or lower the deficit. Feel free to use accepted economic theories or your "modern economic theory." We'd like to know. Cheers!
Thatcher 5 months, 2 weeks ago
Jimheim-- "...rather than taking the lump sum." You are serious? Seriously, you are serious? "Lump sum?" Uh, this isn't the lottery. Your posts on economics are intentionally false, or either you have no idea what you are talking about. Take your pick. Cheers!
packwilleat 5 months, 2 weeks ago
If you want to know how Hitler came to power, just listen to the stupid f'ers on the left.
packwilleat 5 months, 2 weeks ago
Scapegoat........... CAPITALISM.
Thatcher 5 months, 2 weeks ago
packwilleat-- You are correct. Watching Rudolph the Red-Nosed Reindeer with the kids...haven't got to the "Bumbles Bounce" part yet. JimHeim and Obama would tax the Bumble to make sure he can't claim the "lump sum." Cheers!
The_AnonymusProfit 5 months, 2 weeks ago
Jim I will be happy to Score my budget for you but I wont be able to post it tonight.
packwilleat 5 months, 2 weeks ago
Thatcher ~ it's sad to say it, but the left should just man up and wave the socialist flag already. Nobody likes a coward!!
Thatcher 5 months, 2 weeks ago
pack-- Looks like they already have manned-up and admitted they want socialism: http://www.gallup.com/poll/158978/democrats-republicans-diverge-capitalism-federal-gov.aspx. Of course, JimHeim will jump on these poll results and say "dang right!" My guess? The rest of the liberal posters here will say nothing. They will simply wait until they are free to say "dang right!" Be well. Cheers!
packwilleat 5 months, 2 weeks ago
Thatcher ~ oh they are free to say "dang right" now. They are just waiting until we don't have the right to say "dang wrong".
Yukonjohn 5 months, 2 weeks ago
I heard this the other day and it makes sense to me. Start a national lotto and use the proceeds to fund govt. A voluntary tax!! All I know is that l do not believe that the Dems have the right approach to this horrible problem.
Dang, another cold day here...cold enough that the area light quit working about three days ago. The high (if you can call it that) was about 35 below!! It is back to 44 below and headed south!!