What a field day for the heat
A thousand people in the street
Singing songs and carrying signs
Mostly saying, "hooray for our side"

Sunday, November 7, 2010

Sunday Talking Heads

On the "repudiation" - I call bullshit. The people have said, "we're tired of nothing happening, we'll try the other side. Fix it and move faster." With the jobs report this past week, the conservatives will start with an improving economy. Their policies, IMHO, will pretty much stop that in its tracks. There will be some improvement in the next two years, but I doubt with the conservative policies, that we'll get above 2% GDP growth.

There's two arguments going on that are just idiotic on the face of them.

On the tax "increase" (actually, roll back to the Clinton Era rates, which were low compared to the Reagan Era rates). There's a whole bunch of words being thrown around, and it's time to make the argument clear.

If the "richest 1-2%" were actually increasing payrolls, that would be an expense, not net revenue. You are taxed on net (yes, you start with gross on the forms, but then you subtract all the expenses and work you're rate after all those expenses are taken out). So, if you're actually hiring more people, your net taxable income is less. If taxes are low, you have a disincentive to hire (that is, you can bank more of your money, and if you're an S1, that can be money in your pocket). If taxes are higher you have a greater incentive to hire so you can increase your expenses and lower your taxable income.

Of course, if your sole goal is to maximize your income (and here, just to remind everybody we're discussing if you make $10 million a year or $15 million a year), the tax rate going from 28% to 32% won't mean crap in regards to hiring. It does, however, mean a great deal to the person being taxed in regards to their income (if they're able to make that $15 million instead of just $12.5 million).

Second there's the "devolve to the States" (or State's Rights). Yeah. Anybody live in a state that doesn't have their own fiscal problems? About the only one is Texas, and there growth isn't better than anemic (and I'll just point out the hidden costs of that, higher than average poor, lower than average academic performance, and a looming environmental problem). How well do you think the states will do with the added responsibility? Here in Ohio, the incoming republican "wave" is talking about cutting what we already have. If we add more, guess what will happen to your state taxes?

Along with that is the "privatization" call. Really? We've had now 15+ years of experience of privatization that disproves all the arguments for it (lower costs, faster service, greater customer/tax-payor satisfaction). Privatization raised costs (student loans, medicare advantage, IRS processing, food inspections). It increased the time for processing (IRS, food inspections, Medicare). And it lead to greater dissatisfaction (IRS, and do I need to mention the failure of food and product inspections).

In the real world, these ideas don't work. But, I bet if we clap harder this time, they will. Oh. I'm sure they will. Irony, it's what's for dinner.

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