Life On The A La Carte Plan
That would be my choice, along the lines of the Spanish proverb, "Take what you need, but pay for it," meaning you take what you need and pay for it, and I'll take what I need and pay for it. We won't all have our money sucked into some big pot for this pet program and that.
That runs contrary to the spend-and-spend Democrats and the spend-and-spend Republicans. And no, the Republicans aren't the party of small government. They're just the party of somewhat smaller government than the nitwit Democrats, who think you can just tax the mean old rich people and we'll all soon be on a cruise ship to Utopia.
Bob Packwood talks some simple economic sense about this sort of thinking in an op-ed in the NYT:
Some people might assume that we could afford the maximum amount of government largess and still avoid pain for most taxpayers by simply collecting more taxes from the "rich." Not a chance. Let's assume, based on historical patterns and President Obama's suggested spending, that at some point, the spending of all governments in the United States, federal and local, could add up to 40 percent of G.D.P. Mr. Obama proposes to increase the tax rate on income over $250,000 to 39.6 percent. The billions of dollars a year raised by the higher rate won't begin to cover the trillion or so a year in increased government spending. Nor would current state and local taxes support their share of that spending. Therefore taxes would have to be raised on Americans making less than $250,000.One other option would be a national value-added tax on goods. But this would ultimately take its hardest toll on lower- and middle-income consumers.
Even if tax increases are limited to the so-called rich, Mr. Obama's plan, compounded by state and local taxes, could slow the overall economy. Maybe we have not reached our limit yet. Maybe we can have a tax rate of 50 percent to 60 percent on income above $250,000 and people will still work. But at some stage the law of diminishing returns sets in.
The choice to spend less than 40 percent of G.D.P. on government services is not as easy as it once was, because the federal government has already assumed so much responsibility for shouldering the costs of health care and retirement. Fifty years ago, spending on Social Security, pensions and health care was a relatively small fraction of the total federal budget. Medicare and Medicaid did not even exist until the 1960s. Today, taxpayers are footing the bill for far more government programs. But we simply cannot raise enough money in taxes from the rich to pay for the programs the president wants.
So we basically have two options: raise taxes on the middle class, or demand that federal, state and local governments spend less.
I'll take the latter, thanks. And less government, while you're at it.
Oh, and I'd just like to send a big FUCK YOU out to all the asshats in California who thought it made sense to vote for a high-speed train from Los Angeles to San Francisco. Meanwhile, our state is going out of business and what business there is here is fleeing to all the surrounding lower-tax states. Thanks so much, Arnold! I see Cathy Seipp was right; I should've voted for Tom McClintock.
Oh, and regarding the silly, silly notion that merely taxing the stuffing out of the rich will pay our way, here's this from Megan McArdle:
This weekend, I was on a panel where the other economics journalist and I spent a great deal of time belaboring the obvious: Obama's health care plans are very, very expensive, and they mean higher taxes for everyone, not just that elusive klatch of greedy fools who are not in the 95% of working families now allegedly slated for stable or lower taxes. Otherwise, how could Obama hope to pay for it?
Taxing the rich is definitely not enough; I read recently that if we taxed the rich at 100% and were somehow able to collect we'd only increase revenue by a few hundred billion dollars.
Unfortunately, before things get better they're going to get worse. The statists in charge have made things pretty bad, but most Americans haven't been significantly affected yet. We're going to have prolonged double digit unemployment and inflation before it's clear to an overwhelming majority that government by special interest does not work.
What we need is a political movement that opposes all special interests, even the ones that help individual members of that movement. The problem to date is that we look at special interest proposals individually and not grouped together. Taken alone, a piece of special interest legislation proposes a small cost to everyone and a large benefit to a few, and when that's a worthy few (orphans, teachers, veterans) it's hard to oppose. When we add up all of the special interest costs together, though, it's greater than the economy can afford.
Pseudonym at May 12, 2009 5:58 AM
What we need is a political movement that opposes all special interests, even the ones that help individual members of that movement.
Exactly. That, to me, would be ethical government; practical, sensible, pragmatic government. Probably not going to even be considered until we're so far in the crapper we can't climb out.
P.S. Since you mentioned teachers, teachers unions work at cross purposes to educating children too much of the time.
And McArdle noted that Obama, while opposing vouchers for others, sends his children to an exclusive Quaker private school.
Amy Alkon at May 12, 2009 6:37 AM
Oh, and I'd just like to send a big FUCK YOU out to all the asshats in California who thought it made sense to vote for a high-speed train from Los Angeles to San Francisco. Meanwhile, our state is going out of business and what business there is here is fleeing to all the surrounding lower-tax states. Thanks so much, Arnold! I see Cathy Seipp was right; I should've voted for Tom McClintock.
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I had heard that the train was going from Los Angeles to Las Vegas. Possibly I got the wrong Info.
I thought Harry Reid had really pulled one over on Nancy Pelosi. Wow a high speed train taking all that money from L.A. to Vegas.
If California wants to save itself, it better start building some casinos and fast!
David M. at May 12, 2009 8:13 AM
...what business there is here is fleeing to all the surrounding lower-tax states.
That's not what I see in Silicon Valley - I work for a small startup that projects its third straight year of profitability for 2009, and I and other members of our team regularly meet with others who are starting their own innovative businesses both here and in the LA area.
Cheezburg at May 12, 2009 8:14 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/05/12/life_on_the_a_l.html#comment-1648018">comment from CheezburgOne of my friends is a lawyer who does very, very well and is moving to either Nashville or Florida because of the high tax rate in California. This is in the paper a lot lately -- about people leaving the state due to the high tax rates. George Will had a column about it in the WaPo last week.
Amy Alkon
at May 12, 2009 8:28 AM
So we basically have two options: raise taxes on the middle class, or demand that federal, state and local governments spend less.
Yeah, spend less.
Last night I learned that the highest paid California public retiree is getting $499,000 a year. Bruce Malkenhorst is the name, from California's tiniest city of Vernon,CA just south of Los Angeles. Interesting story.
Jason S. at May 12, 2009 8:31 AM
Vernon is a real Chinatown story.
Crid [cridcridatgmail] at May 12, 2009 9:33 AM
Amy: Thank you for posting such a forthright and powerful piece. My sense is that you speak for the vast majority of Americans (and people everywhere for that matter) who want less government involvement in their lives and less government altogether for that matter. I posted a link to your piece at http://YRNetwork.com as food for thought for those guys & gals.
Jason: Thank you for that fascinating story. I've never heard of it before and just blogged about it!
Robert W. (Vancouver, BC) at May 12, 2009 11:09 AM
Wanna know why there won't ever be a political movement that opposes all special interests? Because special interest groups fund political campaigns, and you can't win an election without campaign funds.
ahw at May 12, 2009 1:43 PM
The obvious problem with paying for increased spending by taxing the wealthy more heavily is that when the economy is contracting, there are fewer people making a lot of money. Hence fewer wealthy people to fund all the extra taxes.
So the notion that you can significantly increase revenues from the wealthy in the midst of an economic downturn is moonshine. All higher taxes will do is jeopardise what remains of the productive economy, and ensure any economic downturn will be longer and deeper.
It would be more economically sound to raise higher tax revenues from the wealthy during strong economic times, and put away more budget surpluses that could then be used to fund deficits during the economic downturns. The problem is that too often liberals don't have the self-discipline to manage this, after having to buy off various interest groups that keep them in business.
Nick S at May 13, 2009 5:30 AM
Did anyone else catch the news last night (Tuesday) that it's not just families with incomes over $250k that are going to get a tax rate hike; now it's $235k. I wonder how long it will take before we're down to $215k, and so on?
http://finance.yahoo.com/techticker/article/245620/Higher-Taxes-Coming,-Just-Like-Obama-Promised&comment_start=21
(It's at the bottom.)
ahw at May 13, 2009 8:33 AM
Actually, the proverb is "Take what you want and pay for it, says God", and it's as much a warning as it is a statement. It points out that there are ramifications (probably spiritual, but also probably practical) to your behaviors.
It doesn't mean "what I pay for is mine, what you pay for is yours." It means "sure, go ahead and do X, but you might end up in hell for it".
Which is, in fact, not a bad way to sum up your argument.
Tess at May 13, 2009 10:36 AM
I'm moving to Galt's Gulch, who's with me?
Seriously though, I very much believe that the governmental cost should be divided amongst residents of the country and each should have to pay his/her share,with offsets for the profits of the post office, etc. It would not only ensure that everyone was paying for their government, but it would also ensure accountability. If you get a bill in the mail due on April 15 that says you owe $100,000, you are within your rights to demand accountability for how your money is spent.
Right now, we get a bill, but it is so complex and difficult, we have no way to argue the correctness of the total, nor can we demand to see what they are spending our money on. Add to that the money spent on processing, auditing, and tracking down people who aren't paying and we have a huge expense that we could completely eliminate.
-Julie
Julie at May 14, 2009 7:53 AM
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