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  • The Left and its delusions

    Posted by Michael Kennedy on August 23rd, 2010 (All posts by )

    Cross posted at my own blog.

    I skim the Washington Monthly blog as a window on the thinking of the far left. They are more civil (except in comments) than the DailyKos but the mentality is the same. Today is a reasonable example. The topic is taxes.

    Roll Call noted this morning that the Senate is moving towards “an epic election-year battle over Bush-era tax cuts.” That sounds about right.

    The dispute helps capture exactly what the two parties prioritize right now — Dems want to keep lower rates for the middle class, while reducing the deficit by letting the rich go back to the rates they paid when the economy was healthy. Republicans want to hold the Dem proposal hostage, fighting tooth and nail for breaks for millionaires and billionaires, and adding $680 billion to the deficit the GOP pretended to care about for a while.

    The “middle class” is a very elastic concept for them with the top income range going all the way down to $150,000 per year. Secondly, the group with incomes of $250,000 or more, the target class, consists of mainly small business people who are not incorporated and who file all income with a personal return.

    There is also no concept here of who pays the taxes. Shouldn’t “tax cuts” be distributed to those who pay taxes ? Otherwise, it is just one more government handout to those who are nonproductive. Here is a look. The top 1% of income pays 40% of the income taxes. Hmmm That’s also about $410,000 per year, not $2 million.

    The top 5% pays 60.63% of the income taxes. The threshold for the top 5% is $160,000. Well, what do you know ?

    Billionaires need little help from Republicans but they do invest and are the source of most new jobs. The concern for “the deficit” on the part of Democrats may be translated as the left side of the entire argument about spending versus taxing. Republicans want to talk about cutting spending, especially tea party Republicans. I even have a compromise: Let the tax rates go back to the Clinton administration rates but let’s also go back to the number of government employees of the Clinton period.

    [W]here would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year. But that’s the least of it: the policy center’s estimates say that the majority of the tax cuts would go to the richest one-tenth of 1 percent. Take a group of 1,000 randomly selected Americans, and pick the one with the highest income; he’s going to get the majority of that group’s tax break. And the average tax break for those lucky few — the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year — would be $3 million over the course of the next decade. […]

    Notice how the “richest” become those with incomes over $2 million when we are talking about one aspect of the issue but, when it is time to actually impose the taxes, the incomes shrink back down to $250,000 or, in some cases, it shriveles all the way down to $150,000 per year.

    Midwestern centrists such as Sens. Kent Conrad (D-N.D.) and Evan Bayh (D-Ind.) have called for an extension of all of Bush’s tax cuts, including those benefiting individuals earning more than $200,000 and families earning over $250,000 annually.

    Other Democrats say they would consider raising taxes on individuals and families earning below those thresholds, despite President Obama’s promise that middle-class families would not see their taxes increase.

    Some liberals balk at the notion that families earning $250,000 or more belong in the middle class.

    “Two hundred and fifty thousand dollars? Is that the top 1 percent of Americans, or half a percent? Come on!” said Sen. Tom Harkin (D-Iowa).

    Harkin said he would be willing to extend the tax cuts for families earning $150,000 or less annually.

    See how elastic that number is ? Families with a combined income of $150,000 are “rich.” We went from $2 million per year to $150,000 per year just like that!

    Or we’re told that it’s about helping the economy recover. But it’s hard to think of a less cost-effective way to help the economy than giving money to people who already have plenty, and aren’t likely to spend a windfall.

    Did you notice that one ? Tax cuts “give” money to people who have “plenty.” Just keep repeating to yourself; it’s not your money. It’s the government’s money and they are “giving you some of it.” They used to call that “To each according to his needs.”

    No, this has nothing to do with sound economic policy. Instead, as I said, it’s about a dysfunctional and corrupt political culture, in which Congress won’t take action to revive the economy, pleads poverty when it comes to protecting the jobs of schoolteachers and firefighters, but declares cost no object when it comes to sparing the already wealthy even the slightest financial inconvenience.

    Once again, a translation. Schoolteachers “need” the money. Firefighters is just a cover. The “wealthy” (Those with over $150,000 per year income) don’t “need” the money.

    Note, there is no concept of a private economy here. Nobody invests; nobody starts a business. The story of the 2001 tax cuts that Democrats want to repeal is here in more detail.

    This is what socialism looks like in practice.

     

    16 Responses to “The Left and its delusions”

    1. J. Scott Says:

      Excellent post.

      The individual is ignored, the state overall. Marxism goes after the basic institution of culture (the family) with the purpose of discrediting any relationship above the state–the state to a Marxist-socialist is god, and consistent with the attitude of those on the so-called, progressive left. The have attacked and continue to attack our institutions and our legitimacy as a nation. Terror on their part has been limited to rock-throwing at economic summits and eco-terroris—but make no mistake, terror is in their toolbox if history is a guide.

    2. sol vason Says:

      From each according to his ability, to each according to his need.

      The poor obviously need the money and we must protect their self-esteem. Money given to the poor cannot be labelled anything so crass as “charity”. “Tax cut” sings. If you don’t make enough money to get what you need, the government will give you the difference and call it a “tax cut” because its your cut of the taxes on those people who make more than they need.

      Now everybody is in the middle class, even those who get tax cuts but have never paid an income tax. Even Bill Gates is in the middle class because he may be rich but he has no breeding.

      There are lots of people who have more money than they need and they have an obligation to give all the excess to people who need it.

      But high class people like John Kerry and Charlie Rangel have so much class that they only pay as much tax as they feel is proper because they have lots of needs middle class people don’t have.

    3. Michael Kennedy Says:

      I happen to be a sailor with probably more sailing experience offshore than John Kerry. What is just unforgivable to me is that he would spend $7 million building a new boat that looks like a crass imitation of a classic yacht when there are gorgeous classic yachts being rebuilt, mostly by the Italians, or needing to be rebuilt, that he could save for posterity. Instead, like some nouveau riche social climber (Which he is), he wastes all that money on another boat that will be a derelict in 40 years. Every one of those classics would be happy to use his money (Teresa’s, of course) to return to former glory.

      It’s a bit like being a classic car enthusiast and seeing a newly rich jerk drive up in a Maybach with Texas long horns on the hood.

    4. Robin Goodfellow Says:

      For the record: $250k/yr is the top 1.5% of families, $150k/yr is the top 6%.

      Also, $100k is 16%, $75k is 27%.

    5. Michael Kennedy Says:

      For the record: $250k/yr is the top 1.5% of families, $150k/yr is the top 6%.

      Therefore ?

    6. Robert Schwartz Says:

      The whole thing is maddening on so many levels.

      First, the idea that extending the tax rates that have been in effect for the past eight years amounts to a tax cut is not even wrong, it is utterly misleading. The correct way to talk about it is whether or not Congress is going to allow a massive tax increase.

      Second, the idea that the current rate chart was a “tax cut for the wealthy” when it was put in effect is wrong. The rate charts in Section 1 of the IRC are only one step in the determination of the amount of the check that will be written to the Federal Government. Other calculations, deductions, exemptions, and credits are are also important. For myself, I never had my taxes decrease because of the 2001 changes in the Section 1 rate charts, because I have been paying the alternative minimum tax throughout the entire period.

      Third, the numbers that are thrown around like “it will cost $680 billion to extend the Bush tax cuts” are ludicrous. I acknowledge that under CBO’s methodology it looks like the Government would collect $680 billion more if it raised rates, but what would happen if they sent out invitations to a party and nobody came.

      The methodology assumes that the people do not change their behavior because of tax law changes. That is of course nonsense. Furthermore the CBO assumes that the economy will soon resume its historic growth patterns, even in the face of a whopping rate increase. Double nonsense. The IRS won’t collect taxes on interest earned next year, because market rates have gone through the floor. I think my last money market statement showed a rate of 0.01%. Nor will capital gains taxes be paid, investors will still be offsetting losses from 2008 and 2009.

      Bottom line is that if nothing is done to stop the rate chart from changing on January 1, the economy is going down for another eight count. Even the higher rates will not increase the revenue from a sick economy.

      Fourth, this type of language: “[W]here would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans …” is offensive. Tax revenues are not the Government’s money, they are the property of the people who earned them even if they are passive investors who simply failed to waste the earnings. In the dream lands of the academic left, property may be a gift from the state, and what any of us gets to spend may be only by its grace. But the United States was explicitly created by its citizens (We, the people),and that money is ours. The $680 billion wouldn’t go anywhere, it would stay in the pockets of its owners. Of course if it never comes into being .. see 3rd above.

    7. Shannon Love Says:

      [W]here would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year.

      I love to trap leftists with this argument. Just ask them, “If we just cut taxes across the board, say by 10% would most of the money go to the wealthy?” When the leftists answers, “yes,” just ask them why that is. They will be forced to concede its because the top 20% of the income distribution, aka the rich, pay 80% of all discretionary taxes. The top 5% alone pays 60%.

      The wealthy will always keep more of the money not taken in taxes because they most of the taxes. End of discussion. It is impossible to cut taxes across the board without the rich as a group ending up with keeping most of the money.

      Leftists say that the rich pay have to pay their fair share but that raises the question of what percentage of all taxes constitutes “fair.” If paying 80% of all discretionary taxes isn’t their fair share, the what is? Would it be “fair” for the top 20% to pay 100% of all discretionary taxes?

    8. Percy Dovetonsils Says:

      “The methodology assumes that the people do not change their behavior because of tax law changes.”

      The Ruling Class calls for higher cigarette taxes as a matter of public health, as making smokes costlier will prod more people to stop smoking.

      And yet they don’t seem to understand that by making working and investing “costlier,” you’ll get less work and investment.

    9. ned ludd Says:

      socialism is anything via govt that i do not like. FDIC, price supports, etc are ok, though.

    10. Paul Milenkovic Says:

      Somebody tell me that the Democrats even have a bill in any committee of the House Representatives to even extend the “tax cuts” to the “middle class.”

      What is it that the Republicans are holding hostage as a minority in both Houses? I thought Speaker Pelosi simply wants to let the tax cuts expire on everybody, contrary to Mr. Obama’s campaign promise. That the President or the Democrats support only extending tax cuts to po’ people is just talk right now.

      Let me say this one more time. Suppose I “support the President” and want to let the taxes (OK, OK tax rates) go up on the “top wealthy 1%” but want tax relief for the vast middle class, making less than, pick a number, 150K, 250K, whatever. Is there even a bill to do that, that has a number on it, that I could call my Member of Congress and ask that they support HR-XXXX?

    11. Mike H Says:

      Marxism goes after the basic institution of culture (the family) with the purpose of discrediting any relationship above the state–the state to a Marxist-socialist is god, and consistent with the attitude of those on the so-called, progressive left.

      Interesting point and one not stressed enough: the lefts war on the family. The doctrinaire socialist believes that since society is rotten to the core, it has to be rebuilt from the core and the core of every society is the family unit. The individual is nothing more than a product of its environment, so if the environment can be dramatically altered so to can the products of the environment. Robert Owen attempted this in his first socialist experiment at New Lanark where he separated children and their parents at a very young age so that the parents could not spoil the children’s minds with their old ways of thinking. This didn’t go over too well and was abandoned after several years but the concept of destroying the family and of propagandizing and shaping young impressionable minds has been used time and time again. The Communist Manifesto boasts that the “abolition of the family” is a cornerstone to transforming society.

      Why do you think Bill Ayer’s went into public education? It’s not because he wants to teach children, its because he wants to remake society.

      I don’t think that all leftists believe in abolishing the family, but they have submerged themselves in leftist though (as it were) so deeply that they blithely accept every crackpot social engineering scheme stamped with the “progressive” seal of approval seemingly unaware of the damage that these schemes have on traditional families.

    12. Michael Kennedy Says:

      I don’t think that all leftists believe in abolishing the family,

      As a matter of history, many practice traditional values with their own family but advocate the changes for others. The “elite” have lower divorce rates and single parenthood rates. They send their kids to private schools and follow lots of practices that contradict public advocacy. They do practice what they preach in not joining the military but that has other benefits.

    13. Mike H Says:

      Its funny you should mention that because I was just thinking about what a terrible father Marx was, both as a p[aren’t and a provider. He half assed supporting his family mainly through handouts from Engels.

      A fitting spokesman for socialism, no?

    14. PenGun Says:

      Your massive tax cuts for the rich enacted by W are, along with your wars, a big part of why you are about as solvent as Greece.

      You will default on your debts and will become just another country.

      The ideology you espouse is as confining as any socialist scheme and your language is reminiscent of the old Soviet language, substituting left for right etc. You have destroyed yourself with your greed and will suffer while telling each other how it’s not your fault.

      I gloat. Excuse me that just slipped out.

    15. Michael Kennedy Says:

      Dear Mr Gloater. Your rant illustrates the basic hostility of your type toward America and American citizens. This may be due to personal failure since few of your persuasion make a success of life. Since you are hopelessly in debt, it makes you feel better that other share your pain. Tax cuts for the rich have very little to do with the problems of the US since spending is the basic mechanism. Taxing the rich has little benefit on national tax collection numbers since the rich, of all people, are the most able to avoid taxation. In fact, this is one reason why poorly educated rich people, like Hollywood actors and actresses, for example, tend to advocate such measures. Partly they are secure that their own accountants will see to it they are protected from their advice. Partly, it is a sense that their own success is undeserved and, therefore, that must be true of others in other industries.

      Default on debts may be a real possibility, due to the percentage of the population who share your ideology. I think it unlikely since the coming election seems likely to reverse the policies of this administration which you support. Who knows ? That even might be the source of your bitterness.

    16. PenGun Says:

      Michael Kennedy

      I am not an American. There was a chance after the second world war for the world to move forward into a more reasonable state. For reasons largely concerned with money the USA while talking a good game set out to rule the world economically.

      Not at all surprising. Only the weak minded left would ever conceive of a world based on fairness and equality.

      As the US set out to rule so did everyone else. The competition is pretty brutal and China kinda won. After fighting and winning an undeclared economic war on the USA the Chinese are set to take over as the world’s major power around the middle of this century. They are very smart people and 6000 years of civilization gives them a large advantage in global competitiveness.

      You could have been a contender but the untrammeled greed of your financial aristocracy has made that impossible. There is no way you can pay what you owe as your economy declines. If you default you will lose your reserve status and become a basket case. Greed baby … it’s a killer.

      My agenda.

      This is a very violent universe. I believe the reason that there is no intelligent life around is because it has always been wiped out by physical events. We, if we get into space in a useful and large manner, will become less vulnerable. If we are spread about the solar system it’s quite possible we will be the first intelligent life in this Galaxy and possibly the universe to survive to maturity.

      I need a more united world to achieve my goals of getting humans into space soon. It would have been possible for the USA to have led the way but that will not be happening. The Chinese will do.