Debate on Taxes Is Meaningless

As of Friday, July 20, 2012

Republicans are on the wrong side of the current, meaningless tax debate.

Arguing that a 3 or 4 percent increase on income above $250,000 will hurt small businesses and impede job growth is not going to convince very many people that the GOP has any useful ideas either to boost the economy or to begin to scale down the scope of government.

In fact, that sounds pretty foolish — Republicans defending the rich, as usual. Is that the best they’ve got?

This is not the year for small ball. What should be on the table is the entire tax code. Reduce rates, broaden the base, eliminate deductions. A few more dollars from the wealthy will not even begin to close our fiscal gap. In fact, no conceivable level of increased taxes, by itself, would bail us out, even if such an increase wouldn’t tank the economy, which it would.

If there was ever a time to campaign on a complete overhaul of the tax code, this is it. While the president blathers about fairness in an effort to inspire envy during a weak economy, Mitt Romney’s only response, so far, is to claim that increasing taxes on the wealthy will destroy jobs.

Well, maybe. But what is really destroying jobs is one of the highest corporate tax rates in the world, the utter failure of government anywhere to plan for anything, and an ever-expanding dependency on welfare. Oh, and an educational system that does not prepare our citizens to work and compete in an increasingly interdependent technological world.

You want a meaningful political debate? That is it.

Pollsters and pundits will say that is too complicated an argument to campaign on. They will say it can’t be explained in 30-second commercials. They will say, basically, that the American public is too stupid to understand it. They may be right, but if they are, conservatives might as well fold their tent now and prepare to become the next Greece or Spain a few years hence.

Our political culture is trapped in regurgitated sound bites, dead ideas and wasted time. The most rational and responsible proposal in years, that of the Simpson-Bowles Commission, was completely ignored by the president who initiated it — Barack Obama — and is rarely mentioned by any Republicans campaigning for anything.

Why is that? Because it impinges on too many special interest groups? Because most Americans would have to sacrifice something? Because, well, gee, it would just be too hard to accomplish politically? Four letter words come to mind.

The president is never going to make the case for either tax or government overhaul. He doesn’t believe in, or apparently even understand, the concepts. He only understands pandering to any constituency he can define, except those that actually drive the economy. It falls to Mr. Romney to make the case for a viable future. He is not going to do it arguing about a single blip in the tax code or defending Bain Capital in sound bites.

He needs to dig out and update Ross Perot’s 1992 campaign notes and videos and conduct a seminar on economics and politics for the next three months. He can get behind Bowles-Simpson as a ready-made, bipartisan plan to begin necessary changes, and he can do it before the president suddenly decides it might be a good idea.

The Republican campaign so far is pathetic. All that is being offered is the opportunity to vote against the president.

While that is enough for a lot of people, it will probably not be enough to win, and is certainly not enough to lay the foundations for the necessary changes that should be made in the very near future.

Can Romney pull it out, and, if he does, will he lead the country on a path back to rationality? We can only hope. In any event, he’s all we’ve got.

Fred Wolferman lives in Southern Pines. Contact him by email at fwolferman@ sbcglobal.net.

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JimRussell44 10 months ago

Mr. Wolferman makes several valid points in his commentary. The most notable being that Mr. Romney is "all we've got". With only about four months until it's time to cast our ballots, it would be wise for both sides to lay out, in specific terms, what their plan is for this country. From the Republicans, we'll need more than "we've got to get rid of Obama" or "we've got to repeal everything Obama has accomplished". The Democrats will need to tell us if their policies had the desired effect on the situations and how their continuation will get us back on track. I believe that when we get to the debates, it will become clear who is best suited to lead the next four years.

dbadmom 10 months ago

I believe the majority of Americans can agree that there definitely needs to be major changes made concerning economic. I am an independent who voted for Obama in 2008, understanding that change would not come overnight, but I'm a little disappointed that there has not been a significant amount of improvement since President Bush. However, Romney has not done a good job of outlining what he will do differently if he is elected, only that he will do the opposite of the president. It sickens me to see our nation in a state where the winner of the top position of the US may be determined by how much money one can raise, or who does a better job at tearing the other down, or when the rhetoric is "vote me, because I'm not him." It is definitely a sad time for the US, and it is time that there is serious look at what it will really take to get our nation out of the state it is in, and get rid of the politics of the parties.

The_AnonymusProfit 10 months ago

This is what I know about Romney, he is calm to a fault, smart, successful, and anything but a fool. He has been planning this campaign for the last 4 years of his life. He has put together a winning team and has the money to get it done. The talk of the Romney campaign is weak and not doing anything..is just stupid.

Barak Obama has been campaigning for 2 years and has never said a single thing different. The American people know what Obama has to say. While there are americans, mostly liberals and blacks, who will vote for Obama based on nothing more then the D next to his name, this country is a center right nation. Romney needs to do nothing more then show up to win.

With all the rhetoric of the Obama camp, Romney, with little to no ad fare has either tied or led obama since he clinched the nomination.

The point Im making is that Romney knows what he is going to do, this is not McCain, he has a plan, and he is executing it. And if it isnt fast enough for talk radio and the pundits...O well. My guess is Romney will really begin his campaign leading up to or leaving the GOP Convention.

The_AnonymusProfit 10 months ago

As far as taxes go, I added up what I pay, between, property, car, sales, income, on state and federal levels, FICA, gas, cigarettes etc...I pay roughly 54% of my income to the government in one form or fashion. Mostly through the hidden taxes like sales, or the taxes on my electric bill etc..it all adds up. I make less then 40 grand a year.....

This means that i work more then 182 days a year for free......

Jason 10 months ago

I have voted for elephants and donkeys but remain an independent. I too am frustrated with the Republican party for their fixation with "no new taxes" and anything Obama. We have short term problems (unemployment) and long term problems (debt, infrastructure, education, etc.) and the number of ideas to address the big picture are few and far between. I think it is too simplistic to harp on tax rates (individual and corporate) as long as there are deductions and loop holes that make those rates misleading. Short term we need to get folks back to work. That increases consumer demand (the main driver of the economy), tax revenue, stabilizes family units, and gives many Americans back their self-esteem. We still have a gap in spending from the peak as most have lost their ability to tap home equity. It continues to amaze me how little this is acknowledged on these boards! Americans work less, make less, and spend less. Right there is why the jobs went away-- decreased demand for goods and services. Now the second round is the end of the stimulus money and the significant reduction in government spending at the local, state, and federal level. Laying off government employees contributes to the short-term problem of consumer demand and reduced tax revenues. The deficit needs to be addressed over the long term because A) cutting spending rapidly will push us into a recession (regardless of what the R's say about the economy, we have GDP growth), and B) making radical cuts will significantly reduce our long term global competitiveness. We are the problem. We are too lazy to learn the root causes. We want simple answers. We allow our partisan politicians to manipulate our thoughts for their political gains. The answer isn't with our Second Amendment rights, it by using our brains and demanding accountability via rule of law. Step up people. We are are the problem. We either get our act together or we get the ineffective government we deserve.

MikeNC 10 months ago

Fred, I disagree to a point. Romney said he would REPEAL Obamacare. Right there, our deficit will be reduced over a Trillion dollars. Businesses won't have to stand on the side lines, wondering what other hidden penalties and new taxes may also be within Obamacare. He also said, he would immediately begin REFORMING healthcare, with Bipartisan input. Romney will also extend all Bush Tax Cuts, for a longer period of time. Small Businesses will then be able to project two and three years out, and HIRE more people SOONER. These one year at time tax cut extensions, do nothing in terms of businesses being able to expand, not knowing what will happen in 10 or 12 months later to their tax base. Romney will know better than to throw our tax money at high risk companies, such as Solyndra, with the dismal porfolio they had. And we all know, he won't ask for Trillion Dollar Stimulus Shovel Ready jobs, that will later have to be walked back and admit "weren't so shovel ready." Diane

dbadmom 10 months ago

The_AnonymousProft... "The talk of the Romney campaign is weak and not doing anything..is just stupid."

I'm sure Mr. Romney's campaign is not weak, and I'm sure they are doing something for him to clench the presidency, but my question is what are his plans for getting this country regarding the deficit, unemployment, healthcare, etc? From your post, it seems that all you are concerned with is the fact that Romney is opposite Obama, and the fact that he is smart, and has raised more money, and you said that he has a plan. My point is, as an independant who is really looking at the best candidate, I do not see the plan. Also, as an African American, I plan to vote for who I see as the better candidate for president, not because President Obama is part African, and certainly not because he is democrat, so your statement regarding blacks and liberals is very stereotypical, which is the cause of alot of division in our country, especially where race is concerned. Mr. Wolferman's well written article is about the tax issue in this election, and not about who will or won't vote for president based on race.

dustyrhoades 10 months ago

But by taking advantage of myriad breaks and loopholes that other countries generally do not offer, United States corporations pay only slightly more on average than their counterparts in other industrial countries. And some American corporations use aggressive strategies to pay less — often far less — than their competitors abroad and at home. A Government Accountability Office study released in 2008 found that 55 percent of United States companies paid no federal income taxes during at least one year in a seven-year period it studied.

The paradox of the United States tax code — high rates with a bounty of subsidies, shelters and special breaks — has made American multinationals “world leaders in tax avoidance,” according to Edward D. Kleinbard, a professor at the University of Southern California who was head of the Congressional joint committee on taxes.

http://www.nytimes.com/2011/05/03/business/economy/03rates.html

And now they want to pay lower rates...but I'm betting they'll get to keep the loopholes. Because they'lll whine like babies about "class warfare" and "job creators" if they don't. Mitt Romeny has so far avoided every question about whether he'd close any loopholes.

fugitiveguy 10 months ago

Arguing that a 3 or 4 percent increase on income above $250,000 will have any significant effect on the national debt is a silly notion. Its just the lefties trying to stick it to the rich because it feeeels so good and makes them look good to their base of zombie drones.

MikeNC 10 months ago

DBadMom, the stereotypical door does swing both ways. Romney went before the NACCP and look how he was ridiculed by both the liberal media and some officials within the NACCP. I've said it recently in other posts, and will say it again, it's because we have broken our society down into "groups". I prefer to think that Romney, went before a group of fellow Americans, and plead his case, rather than have him portrayed as a white Reupblican man going before a group of black people to plead his case. Americans continue to label and catergorize. Herman Cain said it best. "He's an American who happens to be black." I'm an American, who happens to be white. Diane

The_AnonymusProfit 10 months ago

@ Dbadmon

First, my comment on liberals and blacks is not stereotypical, in the last election Obama took 95% of the black vote, John kerry received 93% of the black vote, Al Gore got 95% of the black vote. These are just facts. I do not ad hear to stereotypes.

As to healthcare as an earlier post stated Romney will repeal Obamacare, then institute on of the myriad of healthcare plans presented in congress that holds Bi partisan support and relies on the private sector to improve our health care system while instituting certain regulations such as enhanced tort reform to decrease health care costs.

As to the deficit, by repealing ObamaCare, reforming medicade, medicare, social security, extending the bush TAX POLICY, (the bush tax cuts are not tax cuts, they are tax policy) you will see a definite reduction in the size of our debt. Also by doing this and reviving our economy the FED will be able to raise interest rates on short term loans which are currently at 0% which will give increased flow of revenue to the government. Romney goals will create jobs, not as a direct result but as an indirect result of allowing private enterprise to prosper which increases the tax base which increases tax revenue.

As to the race question, yes this country has a race problem, but it is not one created by the GOP, it is created by people like Al Sharpton, Jesse Jackson, Jeremiah Wright, and all the other race whores out there who profit by racial divides, Im sorry Dbadmon but if you think that the GOP is racially biased you have never read a history book nor do you open your eyes to anything other then what you hear on the 6 o'clock news.

WFB 10 months ago

Jason, few people here want to acknowledge total demand as being a key driver in our economy because they take their cues from supply-siders they see on TV or read in Heritage Foundation blogs. Any sort of research they do on their own is guided by confirmation bias and whatever predetermined narrative they, or some talking head on TV they think they can identify with, tell themselves. Ideological blinders are hard to remove.

I say this as a former libertarian that would have agreed with them (the supply-side, heritage fund stooges) 8 years ago.

Now, when it comes to the issue of cuts in military spending, Republicans/conservatives tend to become Keynesians who understand aggregate demand. Excellent illustration of this: http://thinkprogress.org/security/2012/07/18/543931/republicans-goverment-create-jobs-military-spending/

They're so close to getting it. But ideology and cynical politicking prevent much understanding beyond the relationship between defense spending and employment.

fugitiveguy 10 months ago

"But ideology and cynical politicking prevent much understanding beyond the relationship between defense spending and employment."

Its like Larry Flynt is preaching to me about morality and decency. Nothing biased about that website you linked to is there. I'm don't consider this the "eureka" moment the libs think it is.

AFCHIEF 10 months ago

Since when is making 250,000 a year considered RICH

MikeNC 10 months ago

Jason: I think if I hear we have to spend more on Education, I'm going to have a break down !!!! Throwing MORE money at our current Education system, is like pouring gas on a fire to put it out.

Where did all that great infracstructure stimulus money go the other year?

We work HARDER,not less. We spend less, because the government TAKES more. Not to mention the increase in food and energy prices because of the printing press in DC going 24/7.

The Deficit has to be addressed ! and it has been suggested as in the Paul Ryan Plan, reducing the deficit over a 10 year + span, not in 2,4, or even 6 years. And for heaven's sakes, the Government can surely find a 1/2 Trillion dollars in all avenues of it's bloath, that can be eliminated before civil jobs are eliminated. BUT it's never addressed !!!

JOBS grow the economy, grows demand, grows the revenue. And raising taxes, PERIOD now is as devestating as ridding the deficit too quickly ! Diane

Sherwood 10 months ago

"Also by doing this and reviving our economy the FED will be able to raise interest rates on short term loans which are currently at 0% which will give increased flow of revenue to the government."

I don't want to derail the conversation with my nerdiness, and I don't want to give the impression that I think your entire post is wrong, but this statement isn't entirely accurate.

When the Fed raises or lowers short term rates, what they are targeting are the rates on short term government bonds. Banks use the rates on government debt as a base rate for determining rates at which they will lend to other banks, businesses or consumers. In normal times at least (see my amateur attempt at describing our current unusual circumstances, here: http://www.thepilot.com/weblogs/funda... )

So when the Fed raises short term rates, what is being raised is the interest rate on short term government debt. Whenever the interest rate on short term government debt is raised, the amount the government pays out as interest payments also rises. This increase in interest payments represents a increased outflow, not a increased inflow.

But there are instances where government agencies may use idle cash they have to purchase government debt. For example I believe social security, medicare and (obviously) the Fed hold government securities. When the government pays interest on bonds held by these agencies, the treasury is essentially paying interest to social security, medicare, the Fed, etc. Or, the government is paying interest to itself! In the case of the Fed, any interest earned over and above operating costs is recycled back into the treasury.

Sorry for the derail!

AFCHIEF 10 months ago

Obama is not serious about balancing a budget. He proved this when he ignored HIS OWN debt bipartisan debt commissions recommendations.

Why should anyone want to give MORE TAXES to an uncontrollable entitlement spending machine.

Thatcher 10 months ago

I have no quarrel with the proposition that increased consumer demand is good for the economy and economic growth. However, you must first properly define "demand." Nancy Pelosi and Obama's top advisor, Valerie Jarrett, believe that demand and growth result from more food stamps and unemployment benefits. http://townhall.com/tipsheet/katiepavlich/2012/02/22/white_house_unemployment_stimulates_the_economy. The results of such an approach are obvious in the GDP numbers, and the unemployment rate. This approach does not work, because it cannot work. The federal government has no money until it first takes money (through taxes) from the private sector. And those who complain about tax loopholes appear to be intellectually lazy. There are no loopholes, only lawful deductions within our gazillion page tax code. Claiming an unlawful or disputed deduction is resolved by the IRS...just ask liberal hero Warren Buffett. http://www.huffingtonpost.com/2011/08/29/warren-buffett-taxes-berkshire-hathaway_n_941099.html. (Yes, I used the huffingtonpost cite because liberals seem to like that). And this business about taxing the "rich" more, or anyone more (including corporations), is always nothing more than taking money from the private sector and giving it to government to spend. And Nancy and Valerie and Obama have shown exactly how they think your tax dollars are best spent. Pleased with the results? Cheers!

pgericson 10 months ago

@AFCHIEF Obama did not ignore these recommendations. He offered to go along with the bipartisan deficit reduction proposal advanced by six Senators - three democrat and three republican- that had much in common with the recommendations of the debt commission. Unfortunately the Republicans in the Senate filibustered against the bill when it became apparent that Obama would go 'big'. The filibusters included the three Republican Senators who signed on to the proposal in the first place. Congress -not the President- gets the say and Republicans will not get serious when the voting gets serious.

Thatcher 10 months ago

Many of us who were around in the '90s when Clinton was President heard all the dire predictions from liberals about the Republicans' plan to deduce federal spending by reforming welfare...there would be folks dying in the street, etc. Clinton vetoed this plan twice before signing it. After signing it into law, and declaring that "welfare is over as we know it," he explained it like this...in his own words. http://www.nytimes.com/2006/08/22/opinion/22clinton.html. And for those who long for the Clinton-era marginal tax rates, would you agree to the same Clinton-era spending levels? If not, why not? Governor Bob McDonnell from Virginia eliminated his state's budget deficit by reducing spending levels to 2006 levels, and without raising taxes. http://www.bobmcdonnell.com/index.php/blog/P45/. And their unemployment rate is only 5.7%. http://www.businessweek.com/ap/2012-07-20/va-jobless-rate-ticks-up-to-5-dot-7-pct-in-june. Controlling spending works every time it is tried...just ask Gov. Scott Walker. Cheers!

AFCHIEF 10 months ago

pgericson, nice try but Obama soley blew off the debt commission because he was scared to make the tough decisions to cut entitlements to his voter base.

Thatcher 10 months ago

pgericson-- Perhaps you could tell us the date when the Republicans in the Senate filibustered the Simpson-Bowles plan? And please tell us how many Democrats on the Simpson Bowles Commission voted in favor of the Commissions' recommendations to Congress? Lastly, please let us know when Obama claimed to be in favor of the Commission's recommendations, and urged the House and Senate to pass it? http://www.bloomberg.com/news/2012-06-14/in-praise-still-and-again-of-simpson-bowles.html. Thanks so much!

Thatcher 10 months ago

And pgericson, no disrespect to you at all...you appear to be one of the most reasonable posters here. But I spent the better part of a month debating with a certain Democrat Chairman about whether a Simpson-Bowles Commission report was ever produced. He said no, never. I said read this: http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf. He replied, not enough Democrats on the Commission voted for it, so it did not exist. He was correct ONLY to the extent that the Commission's recommendation did not get enough votes from Democrats on the Commission to require an up-or-down vote by Congress. Cheers!

Thatcher 10 months ago

Lastly, to the extent (it is not clear from your exchanges with AFCHIEF), that you claim Obama favored an independent plan floated by 3 Democrats and 3 Republicans on the Commission, please let us know when this sub-plan was introduced in the Senate by Harry Reid and thereafter filibustered by Republicans, as well as how many Democrat Senators voted "no." And what was the date Obama urged Congress to pass this plan. Thanks!

WFB 10 months ago

"Its like Larry Flynt is preaching to me about morality and decency. Nothing biased about that website you linked to is there. I'm don't consider this the "eureka" moment the libs think it is."

fugitiveguy, whether or not the website i linked to was thinkprogress dot org, Republicans are acknowledging, on the record, that cuts in military spending aka cuts in government spending will result in job losses. but you're free to shrug it off with red herrings.

AFCHIEF 10 months ago

Here is some of Obamas hidden secrets

http://my.brainshark.com/The-President-s-8-Billion-Coincidence-356086344

fugitiveguy 10 months ago

"Republicans are acknowledging, on the record, that cuts in military spending aka cuts in government spending will result in job losses."

I fail to see the big deal, its a little like acknowledging on record "that water is wet". Is it really lost on you that jobs created by the private sector are far and away more preferable than those created by the government.

WFB 10 months ago

Yeah, fugitiveguy, I understand your preference. But I'm not suggesting public sector jobs are preferable.

JimRussell44 10 months ago

The discussion of who creates jobs, the private sector or the government, always completly ignores the correct answer: CUSTOMERS CREATE JOBS! Nobody sells anything until somebody buys it. Sure, you can build a factory (or rent a storefront), you can hire workers, you can produce a product or service. But until somebody buys, all you have is expense flowing from your bank account (or from your investors bank account). I would guess that you, as a business owner, would not care where the money came from that bought your product. I'll bet you would not ask your potential customer if they were spending government money or money they had saved up in a cookie jar. In fact, the next time you are in Fayetteville, stop into a store and ask them if they care if the customers are spending money paid out by the government. The problem, as I see it, is that we have customers spending money on products that are made in places that don't create additional jobs for the customers who are spending the money. This imbalance has gone on long enough now that the bulk of the customers are running out of money. We can debate why this happened and point fingers but one thing is very clear, this is the "new normal", so we may as well adapt and get used to it.

geoffcutler 10 months ago

T...speaking off the Democratic Chairman...we haven't heard from him lately. Wonder where he went? Undercover perhaps? And Moon....? Mysterious.

alladat1 10 months ago

The_AnonymusProfit - He has been planning this CAMPAIGN for the last 4 years of his life. - He wants to be president -other than want to be president we don't really know what his plans are. By not telling us what he intends to do he at least won't fail at it.

Bentpan 10 months ago

Ladies Golf Joke

A woman was playing golf when she took a big swing and fell. The party waiting behind her was a group from the White House that included Obama. Obama quickly stepped forward and helped her to her feet. She thanked him and started to leave, when he said, "I'm President Obama and I hope you'll vote for me this November."

She laughed and quickly said, "I fell on my ass, not my head!"

The_AnonymusProfit 10 months ago

Had a wonderful opportunity to speak with andrew soberino yesterday. I must say that for whatever his ideas, he is trully a respectful and smart young man.

fugitiveguy 10 months ago

bent-thats a good one

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