In a shocking turn of events, when you keep cutting your revenue, you are unable to pay for services. The right-wing economic theory of cutting taxes to solve all our problems? Yeah, doesn’t really work. [Bumped. -ed.]
In a shocking turn of events, when you keep cutting your revenue, you are unable to pay for services. The right-wing economic theory of cutting taxes to solve all our problems? Yeah, doesn’t really work. [Bumped. -ed.]
We’ll see. Check back in 1yr to see if the city is still growing, and if crime has shot up relative to other cities.
OK, David, this is ridiculous. Very often, the point of lower taxes is to have less in the way of services – and that many services that most Americans think of as “basic” shouldn’t be done by the cities at all.
I’ll grant you Colorado Springs, which should raise its taxes if it can’t provide basic services like police service. But do cities REALLY need to provide all the services they do? Do parks need to be mowed more then once every two weeks, for example? Should the city really be spending money to keep the park green in an area of the country where this isn’t natural?
So yeah, I don’t buy your broad sweeping conclusion. AT ALL.
Key phrase: , while pension and health care costs for city employees continued to soar
The key problem in state, county, and city budgets across the nation is the public employee union troughs that need to be fed.
B. Minich – give the poor guy a break, wontcha ? Even if you’re not willing to buy it, could you not at least consider renting it from him for a short time, in this current economy ? As a mitzvah, already ! He does live in Seattle, after all, doesn’t he ? (Thus, he can’t be much better off, if at all, than the poor folk in the Denver area)
(innocent grin)
Really gahrie? Do you have any data to back that up? What percentage of the budget pays for those costs? How does it relate to private sector wages and rising health care costs over all?
In case you hadn’t noticed, health care costs are going dramatically up across the country because, *GASP* the private sector doesn’t do a good job of handling health care the way things are now. I mean of course you havne’t noticed that, because it would mean you’d have to give up your sacred cow that privatization and the free market are the answer to everything.
B. Minich, the problem is the right wing mantra is always “cut taxes” and their justification is that governments universally waste money and that lower taxes will just force the government to be more responsible and focus on the priorities. Of course it turns out this is bullshit, that there isn’t this massive moneyhole of wasted money that will suddenly get diverted to essential programs. Why? Because while any large system has waste, the vast majority of the tax revenue goes to pay for things. Things like parks, and police, and firemen, and roads.
Most rational people would understand that when you cut revenue you have to cut spending, and that can lead to the loss of essential services. If you are a libertarian you may think this is a good thing and its your goal. I think libertarians are wrong, but atleast they are consistent. On the other hand most conservatives don’t seem to grasp the idea that the services they take advantage of, services they actually consider vital are going to be impacted if all you ever do is cut taxes! Especially if you cut taxes and expect to keep paying for things you no longer have the revenue for (or worse at a national level paying MORE for things you don’t have the revenue for).
Colorado Springs is an absolutely perfect example of what happens when you cut, cut, cut cut, and run screaming everytime someone mentions the idea of new taxes.
Of COURSE everyone dislikes taxes, because everyone LIKES having more money, but you have to accept that in order to live in a society where things aren’t complete crap you need to accept that there will be costs. Of course that all builds on this ridiculous conservative notion that all the money you are paid is due solely to the work you put in, when in fact many things (such as a national transportation system, public saftey, public health, education, etc.) contribute to creating a stable environment in which you are capable of earning that money.
If you want to have an argument about whether or not parks should be green, and money should go there, thats one thing, but this case is a shining example of how it doesn’t stop there, tax cuts and avoidance to the level to which conservatives seem to aspire WILL impact essential services, in part because not everyone can agree on what is essential, but also in part because you start dropping down to bare bones levels, leaving no wiggle room for when things go wrong. The attitude seems to be “we should be taxed at the absolute minimum to get by right now”. Not surprisingly, the absolute minimum right now is not always good enough, especially in times of hardship, and the un-willingness to re-evaluate what is neccsary right now (i.e. raise taxes sometimes) leads to a situation where you can’t even pay for what is supposed to be basic things like road maintainance and firefighters.
No, Colorado Springs is a perfect example of the short sighted and selfish position advocated by conservatives, and it turns out it doesn’t work.
Well, to be accurate, modern conservatives are the main culprits here. Reagan may have had a point that taxes need to come down and waste cut. But he instilled this “tax cuts uber alles” approach to conservatism that has eaten away at it ever since. I argue this with my dad all the time. He’s always saying “Obama’s going to raise your taxes!” Which may or may not be true. But what bugs me is that nobody is honest about taxes! Everyone promises all these services without honestly saying that we need to pay for it! Republicans are the most guilty of this, but nobody in my lifetime has ever sat mdown and told us what his promises are going to cost. *sigh
B. Minich … actually, you will find that “modern conservatives” don’t have difficulties paying taxes … where we have difficulty is paying taxes so that limousine liberals can assuage their historical guilt (or their historical greed) …
At the Federal level, modern conservatives *really* don’t like earmarks … funding for hospitals, emergency care, fire, etc, not a problem … and then we see how the Speaker spends like a drunken sailor on personal trips on Air Force planes on CoDel trips … we dislike that we are still paying subsidies to peanut farmers, and to farmers NOT to plant certain crops …
At a State and County and Municipal level, modern conseratives *really* dislike each time the budget is challenged, and the local legislators vote to cut fire and police first, rather than their own perks and office staff and salaries …
Modern conservatives don’t give the proverbial rodent’s fundament whether a politician is a D or an R as much as whether or not said politician tries to live as he/she legislates …
Do they send their kids to the local public school ? Or do they insist that everyone else’s kids go to the local public school while their own goes to the private school ?
If they send their own kids to private school, do they support vouchers so that other people’s kids can at least have a *chance* of going to the private school ?
If you pay attention to what really went on with the tax cuts by JFK, Reagan, and Bush, you will find that the revenue taken in by the Federal Government actually went up each time … in Reagan’s time, the deficit went up even faster, but that’s not because of the tax cuts, that’s because the Federal Budgets during that time were not Reagan’s – remember the famous photo-ops on Capitol Hill when the leaders of Congress would ceremoniously dump Reagan’s Budget Proposal into a trash container while crowing “Dead On Arrival !’ …
David K says that the taxes pay for infrastructure – just how has that been going in recent years, just considering the bridges falling down, the levees crumbling (the funds went to Louisiana, but somehow didn’t get spent on the levees), the potholes in most of our cities (yet we have funds for ACORN and the like, yet have to vote for Bonds to pay for Police and Teachers) …
Some of us are trying to show you what we predict and why – and current economic trends and budgetary plans should be scaring the proverbial whatever out of you – cuz the last time we saw idiocy on this magnitude, a Republican named Hoover was in the Presidency … and some of us are aware of what that led to …
At a State and County and Municipal level, modern conseratives *really* dislike each time the budget is challenged, and the local legislators vote to cut fire and police first, rather than their own perks and office staff and salaries …
Case in point….if you look at the 2010 budget for the city in question, Colorado Springs, the budget for salaries and benefits for the city council went up over 250% from 2009 to 2010, while there were major cuts in both Police and Fire.
gahrie – the Los Angeles area legislators pull the same stunts … the California legislature does, too …
Each time someone like David K tries to tell me that the problems are all caused by the “conservatives”, all I have to do is point out how well off, how prosperous the folk in downtown LA are (under one of the more “progressive” city councils in the land) in the State of California (under one of the more “progressive” State legislatures in the land) … and especially in the last year, under one of the more “progressive” White House/Congress combinations the US has *ever* seen …
Just how well are we all doing, folks ?
David, its a nearly-indisputable fact that lowering the marginal tax rate raises revenue when top marginal rates are quite high. See the attached write up of the Laffer Curve to understand why. Where Republicans are disingenuous is in their claim that lowering tax rate always raises revenue, this is certainly not true when the top marginal rate goes from, say, 35% to 33% of income.
But when the top marginal rate goes from 70% to 60% of income, folks have known for, literally, thousands of years that such a change indeed raises revenue. YMMV.
Has there ever been a conservative anywhere who claimed that simply “cutting taxes” will “solve all our problems?”
Perhaps not*, Joe Mama, but as philosophies of governance go, it doesn’t get more ridiculously oversimplified (and thus inaccurate) than:
“Government is not the solution to our problems. Government is the problem.”
And yet this sound bite seems to be the core, almost-religious belief of the present-day Republican Party, without any regard for whether it makes sense to apply it to the particular situation at hand. (No one seems to remember, for instance, that Reagan actually started that sentence by saying “In this present crisis…”, thus suggesting that it would not necessarily apply to every situation ever, which is what today’s conservatives appear to believe.)
*Having said that, tax cuts are quite often what conservatives do indeed propose, no matter how absurd, like proposing a capital-gains tax cut as a “stimulus” at a time when NO ONE WAS GETTING ANY CAPITAL GAINS, and thus no one was paying capital-gains taxes anyway, so such a “cut” would have no immediate stimulative effect.
I would direct you to this article by Bruce Bartlett, one of the architects of Reaganomics:
I don’t see the connection between my question and Reagan’s quote, except to say that perhaps Republicans are guilty of adhering to oversimplified philosophies of governance, but Bruce Bartlett makes my point: According to the architects of “the right-wing economic theory” that is Reaganomics, it is “nuts” to think “that there is no economic problem that cannot be cured with more and bigger tax cuts.” I agree. I’m not sure who exactly Bartlett is referring to who thought otherwise “during the George W. Bush years,” but presumably the answer to my question is some unnamed economist in the previous administration. To the extent that’s true, as any of the countless conservative critics of GWB’s “compassionate conservatism” will tell you, the previous administration wasn’t exactly conservative in its economic policy. To take one of the more prominent examples, GWB uttered the oversimplified sound bite that “when someone’s hurt, government has got to move” — a ridiculous philosophy of governance that seems more at home in the present-day Democrat Party than the GOP.
As for capital gains tax cuts, while they may “have no immediate stimulative effect” (which of course can be said of the stimulus bill in general) — in particular because it is the taxpayers who choose when to realize the capital gains (which they won’t do when there are no capital gains to be had) and thus pay the taxes — they are very far from “absurd.” The notion that cutting capital gains tax rates is an excellent means of fostering economic growth is based on very sound and proven economic policy (which is probably why Alan Greenspan believes that the optimal tax rate on capital gains is 0%). Without getting into the details here, suffice to say that so long as the top statutory capital gains rate exceeds the optimal rate that is best for the economy (which obviously depends on who you listen to), the tax code’s bias towards consumption over investment and multiple taxation of investment returns limits investment and thus hinders economic growth.
I’m not saying capital gains tax cuts are, in general, absurd. I’m saying they were absurd as a stimulus counterproposal. Yet that was a key part of the GOP’s petulant “alternative” proposal, which they offered in bad faith for no other reason than to rebut the (correct) criticism that their actual posture in that debate was pure obstructionism, with no genuine attempt to engage the issue and make reasonable, good-faith proposals that the Dems could potentially have considered adding to the bill.
Your only available counterargument to the absurdity of this GOP proposal, which you dutifully made, is that aspects of the Dems’ stimulus proposals were also not immediately stimulative, or at least not fully so. That may be true, indeed I’ll stipulate that it is true with regard to some portions of the bill — but if there was even a single item in the stimulus bill that had even a 1% chance of having an immediate stimulative effect, that would be superior to the potential for an immediate stimulative effect from a capital-gains tax cut in early 2009. So while this may be a valid criticism of the Dems, it is not a valid defense of the GOP’s bad-faith non-proposal.
Actually, the GOP’s stimulus counter-proposal included a 5% across the board income tax cut, a 1% reduction in all non-defense discretionary spending for 2009, a freeze (not a cut) of capital gains and dividend tax rates at 15%, reducing the corporate tax rate from 35% to 25%, and repealing the AMT for for individuals. I don’t know what makes that a petulant/absurd/bad-faith/non-proposal” other than the fact that you don’t agree with those goals and it admittedly had no hope of being passed. One of the key arguments in favor of the GOP’s counter-proposal and against the stimulus bill was that Obama’s bill contained no market incentives to create jobs, a prescient argument given the unemployment rate.
Brendan – as and when you are making significant investments on behalf of yourself and your family, and when you are running your own business, you will start to realise that successfuly folk plan in advance …
In the current economic climate, with the current legislative clowns in control of Congress and White House, just how in Hades can any rational person plan ahead ?
Can you name one single solitary Dem stimulus proposal that was passed into law that was “immediately stimulative ?
As for Reagan’s “Government is not the solution to our problems. Government is the problem.” – at the time when he uttered it, in what way was he incorrect ?
(-y)
(sigh)
As for Reagan’s “Government is not the solution to our problems. Government is the problem.” – at the time when he uttered it, in what way was he incorrect ?
The Food and Drug Administration
Medicare/Medicaid
Social Security
The interstate highway system
The USPS
OSHA
The Army, Navy, Air Force, Marines and Coast Guard
Federal money making up the vast majority of money spent on scientific research
The number of ways in which the federal government (and state government, and local governmetn for that matter) make our lives better is patently ignored by conservatives. They baloon up the instances where it causes problems and completely, absolutely, shove under the rug the various and numerous successes. Its no different than how the internet gadget blogs often blow out of proportion this or that hardware problem. You only hear about the people complaining because when it works right, people just expect that.
It amuses me to no end that one of the biggest government run programs is also the one that conservatives love the most: the Military. It also costs the most (or close to it, not sure how Social Security compares, i know those are the top two). Yet conservatives have no problem with funding the military or having the government operate it because they think its important. Well guess what, other people don’t have a problem with funding different government programs because we feel THEY are important. But of course, only conservative backed ideas are worth funding because everything else just has to be wrong. Thats the problem with living in a Yes/No, with us or against us mentality.
This is an interesting argument from Joe Mama, in #14:
the tax code’s bias towards consumption over investment and multiple taxation of investment returns limits investment and thus hinders economic growth.
The implication is that the US (and western) economies are primarily investment driven, as opposed to consumption driven. Ultimately, the distinction is relatively arbitrary, such as debating whether the Washington Monument is “tall” or “white”. Obviously, both investment and consumption are key pillars to the US economy.
However, stating a “bias toward consumption over investment…hinders economic growth” puts one squarely in a particular economic, and political, camp. One could argue that the “investment > consumption” camp is the Tea Party/don’t tax me camp, the Fox News camp, so there’s nothing particuarly inconsistent with Joe Mama landing there. Four arguments occur to me in response:
1) The investment that drives the economy is largely businesses borrowing from banks, not George Soros buying shares of those businesses. When the financial markets were threatening our economy last year, it was because the banking system was frozen, not because George Soros was frozen (though he sometimes appears that way). It was the dysfunctional banks that almost killed our economy, whose lending drives economic activity – capital gains is irrelevant here.
2) Japan. In the “investment>consumption” model, Japan rules. Possibly a dream economy for the Joe Mamas of the world? Problem was, their lack of consumption – and too much individual investment – from 1989 to…pretty much today…has led them to a dreadful couple decades of economic hell. I don’t know that anyone denies that underconsumption among the Japanese has exacerbated their economic difficulties the last two decades.
3) All that money on the sidelines. If you watch CNBC or Bloomberg regularly, you know that continuing bulls point to the substantial investment dollars (several trillion) that has not yet reentered the market after the Q1 2009 selloff. Personally, I’m not sold that we’re out of the woods recession-wise, but certainly the business climate has improved with investors as a lagging indicator, if they are correlated at all.
4) Common sense. The great conservative Larry Kudlow frequently says that earnings are the mother’s milk of stock prices. Earnings, not investment in securities. What drives earnings? Consumption, pretty much.
All said to affirm that, while I am generally conservative and certainly very pro-capitalist, I am sympathetic to redistributive tax policies because, unlike Joe Mama, I think consumption is much more important than investment in driving our economic machine.
David K – #19 – you have me fascinated – what is your source for “Federal money making up the vast majority of money spent on scientific research” ?
You may be right, but it would astonish me – back during Reagan’s time when he spoke those words “Government is not the solution to our problems. Government is the problem.”” (January 20, 1981), White House (Carter) and Congress had been busy raising inflation in the US to record levels, raising interest rates in the US to record levels, lowering US stature internationally to record lows, et cetera … the US population agreed with him so strongly that they had just given Reagan a landslide result the prior November …
That’s why, when I see President Obama being Carter II, blended with Hoover II, it doesn’t exactly inspire confidence in rational folk who are aware of histrory …