« Von's "Idiotarian" Award. | Main | Al Qaeda Claims Credit for Madrid Blasts »

March 11, 2004

Comments

I don’t know what’s funnier, Kerry saying that an ad about “defense” and “the war on terror” has “nothing to do with making America safer in this world” or his attempt at accusing someone else of running of away from his record. There were a few useful things to be gleamed from this article:

Republicans said they welcomed the debate over Sept. 11 that the ads prompted and look forward to wrangling with Kerry over the size of any tax increases he would support. Kerry has never explicitly called for a $900 billion tax hike, but Republicans are basing their case on incomplete arithmetic in his own policies.

Just a reminder the “incomplete arithmetic” is because some of Kerry’s proposals for new spending have not been calculated yet. Meaning that unless he reverses himself on his new spending proposals or comes out with a “secret plan for reducing the deficit” (1), then his figures are being low-balled – particularly health care costs which are notoriously difficult to accurately forecast.

Kerry's plan to reduce health care costs (TW: don’tcha love how the AP tries to spin a plan to increase federal spending as a “plan to reduce health care costs”)would cost nearly $900 billion, according to a study by Emory University economic professor Kenneth Thorpe, who has been cited by Kerry's campaign and other Democrats as an authoritative source.

Thorpe was one of the architects of the ill-advised Clinton health care plan. For those of you who like myself are a bit on the wonkish side, you can read the actual report here. I would be willing to bet that Guinness that Jesurgislac owes me that that the $895 Billion figure turns out to be on the low side of things.

The presumptive Democratic nominee has vowed to roll back Bush's tax cuts for the wealthy, saving about $250 billion over 10 years by most estimates. He would keep — and perhaps enhance — middle-class tax cuts pushed by Bush.

Now this is what’s interesting, the “savings” from rolling back the tax cuts for the more productive citizens - by which I assume Kerry means raising the top rate from 35 to 39%, reversing the cuts in capital gains, restoring the double-taxation of dividends, and bringing back the death tax (2) – all of which are the parts of the tax cuts most likely to support long-term economic growth – are only expected to net the government about another $25 Billion a year. I have no doubt that the economic costs of these taxes (e.g. compliance with the death tax and the economic distortions created by altering behavior to avoid being hit with a tax) are far greater than the sums the government hopes to collect.

I look forward to reading the revised figures but right now – with $895 Billion in new spending on health care alone (which is undoubtedly being underestimated), plus other new spending on top of the current spending levels which has not been accounted for, and only $250 Billion in revenue from repealing tax cuts (which will probably cost the economy more than the government gets in revenue), and opposing any sort of entitlement reform, it does not look good for Kerry.

TW

(1) Shout out to you-know-who. ;)

(2) Contrary to what some may have believed, “estate taxes” have long been referred to as “death taxes” – this was not simply a term that Republicans invented when they proposed repealing them. I found a legal periodical with an article on estate tax law from the early 1970s, which referred to them as such. The author of the article took no position in the article of favor of their repeal or reduction.

Now this is what’s interesting, the “savings” from rolling back the tax cuts for the more productive citizens

You say "more productive citizens"; I say "stinking rich robber barons"...6 of one; half dozen of the other...but don't let class warfare stop you, Thorley, by all means play up that angle, it's served the Republicans so well in the past.

all of which are the parts of the tax cuts most likely to support long-term economic growth

Or short-term increases in the number of servants the robber barons are hiring for their new yachts..

are only expected to net the government about another $25 Billion a year.

source?

Well, gee, I hope Kerry doesn't fib about the costs of his proposals. That would make him just like this:

WASHINGTON - The government's top expert on Medicare costs was warned that he would be fired if he told key lawmakers about a series of Bush administration cost estimates that could have torpedoed congressional passage of the White House-backed Medicare prescription-drug plan.

When the House of Representatives passed the controversial benefit by five votes last November, the White House was embracing an estimate by the Congressional Budget Office that it would cost $395 billion in the first 10 years. But for months the administration's own analysts in the Centers for Medicare and Medicaid Services had concluded repeatedly that the drug benefit could cost upward of $100 billion more than that.

Withholding the higher cost projections was important because the White House was facing a revolt from 13 conservative House Republicans who'd vowed to vote against the Medicare drug bill if it cost more than $400 billion.

Rep. Sue Myrick of North Carolina, one of the 13 Republicans, said she was "very upset" when she learned of the higher estimate.

"I think a lot of people probably would have reconsidered (voting for the bill) because we said that $400 billion was our top of the line," Myrick said.

Five months before the November House vote, the government's chief Medicare actuary had estimated that a similar plan the Senate was considering would cost $551 billion over 10 years. Two months after Congress approved the new benefit, White House Budget Director Joshua Bolten disclosed that he expected it to cost $534 billion.

Richard S. Foster, the chief actuary for the Centers for Medicare and Medicaid Services, which produced the $551 billion estimate, told colleagues last June that he would be fired if he revealed numbers relating to the higher estimate to lawmakers.

"This whole episode which has now gone on for three weeks has been pretty nightmarish," Foster wrote in an e-mail to some of his colleagues June 26, just before the first congressional vote on the drug bill. "I'm perhaps no longer in grave danger of being fired, but there remains a strong likelihood that I will have to resign in protest of the withholding of important technical information from key policy makers for political reasons."

Knight Ridder obtained a copy of the e-mail.

(Oh, and I also loved the 'more productive citizens' line. One imagines Thorley ensconced in a comfortable chair, slippered feet upon an heirloom ottoman, smoking a pipe, wearing a robe of regal color. Gazing fondly at the framed limited edition photograph of George Will on the mantle.)

If all it took to make millions was sitting on your ass and drinking port, I'd be a friggin' billionaire by now.

Slarti, if you'd only picked the right parents, you can now look forward to making millions by sitting on your ass - drinking port is optional. George W. Bush wants his daughters to inherit his fortune intact - no pesky estate tax to bother them. (For that matter, George Bush's children, if Dubya Bush gets his way, will inherit their father's fortune by sitting on their asses - something George W. Bush has proved he's eminently qualified to do.) But, unfortunately, Slarti, you don't fall into the very small class of people whom George W. Bush intends to benefit by his tax cuts. The question is, are you going to be conned into voting for him anyway, the man who wants to make you poorer in order to make himself and his daughters far richer - or vote for Kerry? No rush - you've got till November.

George W. Bush wants his daughters to inherit his fortune intact - no pesky estate tax to bother them.

Shame on him. Everyone should strive to divest themselves of every cent before expiring.

the man who wants to make you poorer in order to make himself and his daughters far richer

No, I think I'll instead vote for the guy who wants to raise taxes, raise spending, and cut defense. When rocks fart, that is.

You're missing the "make you poorer" part Slarti. Bush's tax cuts have sent local and state taxes up...

Bush's tax cuts have sent local and state taxes up...

How so? How can a decrease in the marginal tax rate cause state and local taxes to increase? No connection there at all, Edward.

And...mine haven't changed a bit.

Edward wrote:

You say "more productive citizens"; I say "stinking rich robber barons"...6 of one; half dozen of the other...

Just so we’re all clear who Edward is talking about when he says “robber barons” he’s referring to over half of the working population who is invested in the stock market (capital gains tax cut and ending the double-taxation of dividends), the over 90% of millionaires who are first-generation, and small business and farm owners who wanted to leave it to their kids (death tax cut).

Or short-term increases in the number of servants the robber barons are hiring for their new yachts..

Perhaps if we had enacted the “short-term” economic stimulus favored by the opposition party hoping to “temporarily” “boost consumption.” Those tend to be geared towards short-term increases in consumption. The tax cuts Kerry wishes to repeal are mainly for capital formation not consumption which means they are more likely to encourage (or remove some of the discouragement) of further investment which means more capital for business expansion and retooling, new business startups (which are rarely captured in employment figures), and new capital investment which leads to higher productivity (and ultimately higher wages) over the long-term.

source?

It was in the article you posted which I quoted in my original post. I trust that I don’t have to explain what “saving about $250 billion over 10 years by most estimates” comes to an annual basis. Or do I need to find someone who works on a boat to do the math for you?

sorry Thorley, you'll have to try harder than that, at least until you can explain to me how leaving money to your kids makes you "more productive"

The comments to this entry are closed.

Blog powered by Typepad