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The Republican Marginal Revolution
Posted by: Jon Henke on Wednesday, May 10, 2006

I'm late to this discussion, but this month's Cato Unbound topic — "The GOP and Limited Government: Do They Have a Future Together?" — provides a lot of food for thought. I'll eventually have more to say about some good follow-ups by Bruce Bartlett, Ryan Sager, David Boaz and Ross Douthat/Reihan Salam — all of which are worth reading — but let's start with the essay of David Frum's discontent...
The fairest chance to achieve the limited-government agenda passed with only very limited conservative success. [...] And the day in which we could look to the GOP to have an affirmative small-government vision of its own has I think definitively passed.
Frum goes on to list three main reasons why the small-government windown has closed...

  • "First, while small-government conservatism remains an important faction within the Republican party, it is only a faction [and therefore] not strong enough to enact a program by ourselves..."


  • "Second, I think it’s been fairly established now that the Republican party responds far more attentively to the practical needs of business constituencies than to the abstract principles of free-marketeers."


  • "Third, for the GOP to reinvent itself as a limited-government would require it to repudiate much or maybe close to all of the domestic agenda of the Bush administration."

Finally, Frum suggests that the limited government approach may merely "live on as a tendency within both parties rather than as a compact and self-conscious movement in control of one of them". This is, I think, indisputably accurate.

People like the the big government programs we'd like to cut.That's not to say that I think that "limited government" is a lost cause. Progress can be made...but not with our current approach. Before we embark on another anti-leviathan revolution a la 1994, Republicans need to remember a practical problem with such a crusade: Government is a very popular tool, and there's just not much reason to believe that the US public will repudiate that tool in the near future. People like the the big government programs we'd like to cut.

Oh, sure, they’ll complain about taxes, pork and other easy targets or painful reminders of the cost of government, but they generally approve of — and vote for — the programs that constitute the bulk of the "size of government" about which we complain. In a recent CBS/New York Times poll, fully 62% said "the federal government should guarantee health insurance for all Americans". That result is not an outlier. As for the other major federal liability, social security, numerous polls show the public trusts the Democratic Party substantially more than the Republican Party to deal with Social Security, which should tell you all you need to know about their interest in cutting it back.

The Democratic Party strategy is "Look what Government can do FOR you", while Republican Party counters with "Look what government is doing TO you". Porkbusting is helpful and it certainly energizes the limited government types, but we could eliminate pork entirely and it wouldn't substantially reduce the size and scope of government; nor would any likely cuts in military or discretionary spending. The problem programs for libertarians and fiscal conservatives are the entitlement programs and those are, let's face it, popular programs. On the question of the size of government, the Left has indisputably won.

The problem, I think, is in our very un-economic approach to the cost/benefit calculation of government. The Democratic Party strategy is "Look what Government can do FOR you", while Republican Party counters with "Look what government is doing TO you".

Both views get sympathy from the voting public and power shifts according to the current zeitgeist. It's a never-ending cost/benefit Kabuki dance, where — with apologies to Kipling — cost is cost and benefits are benefits and never the twain shall meet.

The problem, however, is that neither party is particularly acknowledging the trade-off. Government does fulfill a public demand; it also extracts a public cost. In a free market economy, we balance these competing interests with the price mechanism.

A price mechanism is the process by which a market ensures an efficient allocation of resources – as prices rise or decline, consumers react by altering the quantity demanded. Unfortunately, there’s not much of a market mechanism for determining the marginal utility of additional government spending, so voters simultaneously want more benefits and lower taxes – ultimately contradictory demands. Because consumers always overdemand goods and services that are underpriced—or paid for by someone else—this helps the Party (i.e., Democrats) that promises more public benefits rather than the Party (that once upon a time) promised less.

The path forward for libertarians and fiscal conservatives, then, is accept that voters will demand benefits, but to ensure that voters feel the costs of additional government through a Price Mechanism for Government.

I've briefly touched upon such an approach previously here. The primary policies towards this kind of Republican Marginal Revolution would be Transparency and a Tax Price Mechanism. Some suggestions toward that end...

Transparency:
(a) so that the public is aware of what is being done in our name and with our money and can speak up in time to make a difference, all spending legislation (save classified material) should be made public on the internet prior to a vote;

(b) to avoid the game theory and public choice problems wherein politicians vote for unnecessary expenditures simply because they are attached to otherwise-important bills (or to get their own provincial expenditures passed), all expenditures should require a separate up-or-down vote from each Congressman or Senator. Russel Roberts observed in the WSJ 10 years ago that, under our current pattern of diffused-cost spending decisions, "self-restraint goes unrewarded".
The Price Mechanism:
The next tax reform should not merely seek to simplify our tax burden, which was recently estimated at a “compliance cost of over $265.1 billion”, which amounts to a “22-cent tax compliance surcharge for every dollar the income tax system collects.”. Tax simplification is cyclically inevitable, but inevitably prone to what Christian Sandstrom called “the marginal utility of satisfying rent-seekers” – i.e., a simplified tax code will invariably become more complex.

The next tax reform should seek to internalize the costs of government programs, such that any increase (or decrease) in spending would have an immediate and apparent affect on all taxpayers. A flat tax could do just that with a floating tax rate, indexed to overall spending levels. What's more, a flat tax could quite easily be designed to be effectively progressive, with the inclusion of basic income and housing exemptions, while not overly distorting the economic decision making process.

In fact, a variant of this – “Efficient Taxation of Income” — was proposed in Harvard Magazine by economist Dale Jorgenson. He suggested "a new approach to tax reform based on taxation of income rather than consumption. This would avoid a drastic shift in tax burdens by introducing different tax rates for property-type income and earned income from work."

This kind of flat tax could be widely popular among disparate political interests. Libertarians would love to the price mechanism aspect; liberals would appreciate the mandatory effective progressivity and the end of special interest tax breaks or favors that create regressivity. Conservatives would go for the increased simplicity and reduced marginal rates.
We must stop appealing to an unsustainable interest (cutting taxes) and start appealing to the margin.Ultimately, however, the specific mechanism of the tax is less important than the existence of a price mechanism. If we want to make limiting government a reality, we must stop appealing to an unsustainable interest (cutting taxes) and start appealing to the margin – that area where voters can decide just how much they value what government does for them, compared to what government does to them.
 
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The Democratic Party strategy is to play the "Look what Government can do FOR you" angle, while Republican Party counters with "Look what government is doing TO you".
I’ll agree when we are talking about money. When it comes to civil liberties and the patriot act, the opposite seems to be true.
 
Written By: Tito
URL: http://
A flat tax could do just that with a floating tax rate, indexed to overall spending levels. What’s more, a flat tax could quite easily be designed to be effectively progressive, with the inclusion of basic income and housing exemptions, while not overly distorting the economic decision making process.
I believe that will only work when a majority of the citizens pay some non-zero amount of tax. You’d also have to account for future outlays or else we’d end up with another Social Security shell game.

 
Written By: Mark A. Flacy
URL: http://
This reeks of defeatism. The real problem has been a lack of leadership. When the senior senators of your party and the president himself is a big government type then that is the direction you will go.
To say that big government is popular well, yeah so is American Idol, so what?
Public opinion is molded by events, speeches, and leadership. It all comes down to that, the "L" word!
 
Written By: kyle N
URL: http://impudent.blognation.us/blog
Jon,
I think the way to enact limited government, and limited taxation, is through the active devolution of powers to states and localities. I used to think the GOP agreed with this.

But it has screwed the pooch: currently, it cannot credibly propose a "loose-federal" platform that devolves cleanly to the states because it has hobbled itself with contradictory stances.

We all know what the GOP’s favorite Federal over-reaches are: the infringements on states rights associated with the Interstate Commerce Clause, "mandates attached to "Freeway Spending", Education funding (remember "school-bussing," and Affirmative Action?), the exigencies of the Federal War On Drugs, and countless others.

One day, when the GOP can draw a straight line through its respect for the sovereignty of states like Tennessee and Arizona, and its other positions on National Defense, Drug Prohibition, Trade and Commerce, Immigration and Education, then it may be able to walk the talk.

Right now its walking like a duck and braying like a mule.


 
Written By: grass
URL: http://
Well KyleN you nailed it last night, but dropped the ball tonight... It’s ain’t leadership, right now. People LIKE government programs. You want to cut Foreign Aid, go right on...uh you want to cut anything else be prepared for one HECK of a fight. Economists point out that most programs cost you and me a few dollars, so eliminating them saves you and me very little, BUT those programs contribute a WHOLE LOT to FEW people and those folks vote and will fight the cuts! Bottom-line: those few "howlers" outweigh us, in fact Trnet Loff might lose his job over cuts in some programs, so he will NEVER cut them, and it’s not worth your and ours time to overcome the opposition to cutting them.

I am not bereft of hope, but what this takes is NOT Leadership, but rather Time. The Federal Government did not "explode" during the New Deal. In the 1950’s the Federal GOvernment was less than 10% of GNP. It exploded in the 1960’s when people thought it was necessary to spend the money. If we work hard on education, people may come to see that the Great Society needs massive REFORM. So it’s not lack of leadership, but rather the fact that at the moment most people benefit from some program and don’t see the need to fight for the elimnation of others.
 
Written By: Joe
URL: http://
The limited government conservatives have been pushed out by the pro-lifers. They can’t coexist.
 
Written By: Alan
URL: http://
People are so fed up with the GOP not living up to conservative ideals, and the immigration issue is confusing everyone so much (since there is no clear left-right position on the issue), that a 3rd party candidate is almost certain in 2008. This will screw up both parties’ campaigns greatly.
 
Written By: Tester
URL: http://futurist.typepad.com
Jon, I think this is a pretty good idea.

I think it will eventually catch on, in some form.

I don’t know if it’s libertarian, exactly. Do you?

The immediate problem is that I wouldn’t trust George Bush or anyone within 1000 intellectual miles of him to guarantee progressivity. Every economic move he’s made to date has been regressive, and I don’t see it changing.

This leads to the larger problem: you have a serious PR hurdle with flat taxes, because Steve Forbes wanted to use them to massively shift the tax burden to poor people. Couldn’t a consumption-based tax with excemptions on neccesities consumption still be linked to government spending?
 
Written By: glasnost
URL: http://
The limited government conservatives have been pushed out by the pro-lifers. They can’t coexist.
BALDERDASH, Alan... that statement says more about YOU than the situation. I’m pro-life and think government is too big... and many feel like me. You’ve gotten yourself caught up in some personal/philosphic bind about "Jesusland" or "Red Staters" that simply isn’t true. And BTW, we’d better coexist, because in a show down, right now, YOU (assuming you are a small government kind of guy) would lose the p*ssing match between the Pro-lifers and the small government/libertarian Republicans. You’d lose and then what, you’d leave the party and be impotent like the REAL Libertarians under Badnarik and company.

Of course the break-up would shatter the GOP for a few years and benefit Pelosi, Reid and the Clintons and I don’t see them as conducive to the "Small Government" cause. We’d both lose, in the short- to medium-term. So I have news for you bucko, we NEED EACH OTHER. You need me a little more than I need YOU, but we are crucial to the cause of the GOP.

So, we’d better learn to get along, because otherwise it’s like Franklin said, "Gentlmen, we must all together or assuredly we shall hang separately." As I told Kyle it’s about the zeitgeist of the time, it’s 1954 and people might agree that segregation is bad, but they don’t want to rock the boat. The time isn’t right for radical change...like Thurgood, King and the NAACP you and I can keep fighting the fight to make the time right, but right now it isn’t and it’s not the Pro-Life Republican’s fault, so a little less spurious blaming and a little more effort and patience on your part, please.
 
Written By: Joe
URL: http://
Glasnost, whether it’s true or not a consumption tax would have to be in the neighborhood of 30%, according to Jon and even Neal Boorts (and he FAVOURS it) and according to Jon compliance is a major issue at rates much above 20%, EVEN WITH REBATES a la The Fair Tax.

Of course, I don’t favour PROGRESSIVITY, please explain to me WHY Bill Gates, ought to pay 40% of his income to the government, simply because he made MORE than Glasnost?
 
Written By: Joe
URL: http://
1)devolve power to the states(won’t happen,see "grass" above)
2)deal with income inequalities(see Mark Flacy above)
3)limit the vote to net tax payers only(ha ha ha)

Reagan,not Bush,is the anomoly in the GOP.The paleoconservative traditionalists are out,the liberal,big business country clubbers are back in.

Libertarian support for open borders has been suicidal in many ways,they sold their souls for ideological purity....oh and cheap nannies,maids and gardeners.Now they can pay the price(would have been waaaayyy cheaper to cut your own grass).

More "cheap labor"?

Ok,and more gov’t for schools,health care law enforcement,prisons and courts,etc,etc,etc.

oh,and also

"I’ll agree when we are talking about money. When it comes to civil liberties and the patriot act, the opposite seems to be true."

Abrigdment of 1st amend. in the name of tolerance and social harmony,hate crime laws,yada yada yada.

How have libertarians made America more...umm..."libertarian"?
 
Written By: noone
URL: http://
I sense denial. Analyze the marginal cost of a new government program and you see what the problem is.

When I own a truck company and earn 15% on my gross, while my truckers earn 7% on their gross, and the flat tax rate is 10%, then it is to my advantage to go to have government nationalize my expenses. At a 10% tax rate, I want nationalized health insurance, nationalized diesel production, everything nationalized on my variable expenses.

Since JFK, this problem was widely known, and conveniently ignored by flat taxing conservatives.

Goverment is a market for services, a market full of cartels and monopolies, but a market nonetheless. All of our microeconomic models have been small goverment models.

Look at the rise in "return on investment" as an executive rises up the corporate ladder. At some point in his rise he converts from a progressive taxer to a flat taxer. That point is when the marginal return of using government services is greater than his flat tax.

It is not the people on the bottom rung of the ladder growing government, it is the people on the upper rungs who see utility in keeping their mouth shut and letting goverment grow.




 
Written By: Matt
URL: http://
You touched upon the real issue — for recipients of gov’t cash, it’s free money, "paid for by someone else". The voters have been corrupted by OPM, Other People’s Money.

They say they want: "a hand, not a handout" — but they consistently vote for a handout.
They say they want to "help the poor" — but most gov’t spending programs are for the middle class, middle class bureaucrats, and rich businessmen (=job creators).

Boaz thru Frum also fail to mention the huge appeal for an ACTIVIST gov’t, actively solving problems — don’t just stand there, "do something!"

My suggestion is Tax Loans, a gov’t benefit to "solve the problem", but the recipient pays off the loan in two parts: 50% of his income tax to pay off the loan, plus a progressive loan repayment (surtax) of 5, 10, 20, 30% of income on above poverty, 80% of average; average, twice average.

Education grants replaced by Tax Loans; Katrina rebuilding funds become loans; even immigrants could be required to take out $20 000 loans ($40 000 for illegals) to come to the US; the house mortgage deduction could be replaced by explicit Tax Loans.

I’ve long been looking for any program better than Tax Loans, but not finding it. What do you think?
 
Written By: Tom Grey - Liberty Dad
URL: http://tomgrey.motime.com
"What’s more, a flat tax could quite easily be designed to be effectively progressive, with the inclusion of basic income and housing exemptions, while not overly distorting the economic decision making process."

For suitably large values of "not overly".

The fundamental problem with your proposed "price" mechanism for government spending, is that a market price mechanism works because the price is paid by the consumer, not people in general. The closest analogy to your price mechanism, in the free market, is people ordering at a restaurant who’ve agreed to split the tab equally.

Not incidentally, a textbook example of a situation where overspending occurs.

Frum is, of course, right about the GOP having to repudiate George Bush in order to become a party of limited government again. What’s wrong with repudiating George Bush? Nothing I can think of...
 
Written By: Brett Bellmore
URL: http://
And we couldn’t index a progressive rate to spending rates. Why, that would be impossible.
 
Written By: jpe
URL: http://
Social essays. Come guys, economics is a science, the problem is right their in your equations, try a little objectivity and get out of the social essay business.

I hear a bunch of essays regarding the "Reagan legacy" being denied. You all know very well how much government grew under Reagan, under both Bushes and shrank under Clinton.

If progressivity was introduced back into the tax system, and the stockholders of GM were deciding about health care, do you think they would pass that on to government? No, given the marginal cost, to them, of government healhcare, they would keep it private and within the company, or, if sensible, pass it down to the workers to manage.

The problem is at the top, you guys. The people at the top are growing government, using government to police the oil lanes, now I hear they want government to provide health care, educate the kids. Wal Mart executives want the Feds to educate the kids, it is cheaper than training them themselves at these tax rates.

As we rise up the ladder, we grow our incomes and mostly our return on investment rises. The higher we are on the pyramid, the more we take a cut of the gross from more workers below us, so we get a deal on the government services these workers utilize. These workers are consuming government services that would otherwise be corporate expenses. But, our tax payment, at the top, is a fixed rate. It is an open ended system, a national disaster.









 
Written By: Matt
URL: http://
Joe, there’s a difference between limited government and smaller government. Government can be much smaller in size yet still be extremely intrusive. For that matter a huge government can be considered fiscally conservative if the budget were balanced.

But no...when I say limited government I mean smaller and less intrusive. The pro-lifers want government to be extremely intrusive. They want government to make reproductive and end of life decisions for me and my family. Sorry, I just don’t think that’s the role of government. And it certainly has nothing to do with limited government.

So basically, your "cause" is not mine. The only reason you think you have such a huge voice in the party is because Rush Limbaugh and practically every other pundit tells you and the GOP that you do. The Terry Shiavo mess should have opened a lot of conservatives eyes...I don’t mean the pseudo-conservative pro-lifers.
 
Written By: Alan
URL: http://
The problem, however, is that neither party is particularly acknowledging the trade-off. Government does fulfill a public demand; it also extracts a public cost. In a free market economy, we balance these competing interests with the price mechanism.
The price is indicated by the overall performance of the economy.
 
Written By: Unaha-closp
URL: http://
Oh YEAH Alan... so tell me who has a better chance of moving their agenda, YOU or me, a pro-lifer? I’m closer to victory tha you are. So if you ARE GOP I’m afraid you might as well leave, don’t let the door hit you on the arse on the way out. If you aren’t well I really DON"T CARE ABOUT YOUR OPINION, ’cuz well you weren’t voting my way any way.

I really don’t care to go into the abortion thing, it’s not the topic of the night. Suffice it to say, in my vision of government protection of those who can’t speak for themselves is a paramount function OF government. Obviously we disagree. As my faction is larger than yours and we have irreconciliasble differences, well goodbye and have a nice life.
 
Written By: Joe
URL: http://
I don’t mean the pseudo-conservative pro-lifers.


One last thing Alan... you’re making the Pat Buchanan mistake, "I’M the Conservative, YOU’RE the fraud." I’m not sure WHO is a Conservative... I’d bbe carefu about who you throw out of the boat, as well you might discover that the life boat doesn’t include very many people and it sure won’t carry you to your destination.
 
Written By: Joe
URL: http://
Joe, my bet is your victory will never come. But I’m pretty sure your agenda will be successful at destroying the GOP. I also bet that 20 years from now many conservatives will be blaming Rush Limbaugh and his ilk for destroying the GOP with the absurd pro-life Barbara Streisand.

Surprisingly, I used to be sympathetic to the pro-live cause, but no longer. The scales fell from my eyes during the Shiavo mess.
 
Written By: Alan
URL: http://
Yeah Alan... so you stayin’ or goin’? that’s the GOP question... Some how I here the 1860 version of the Country Club Republicans saying the same thing of the Abolitionists....If you’re staying I’d STFU, because well your tent mates don’t want to hear it. I take it personally and think you’re being insulting and that’s not good politics, WHATEVER party you’re in. If you’re going, have fun finding a party that will accomodate both your ideology AND your desire to shape public policy.

It’s funny that you mention one of the problems of the GOP as one of the most successful voices the GOP has. I see you as a "purist" or a Christine Todd Whitman, "this is MY party too, D%^&it" only what you REALLY mean is "This is MY party..."
 
Written By: Joe
URL: http://
The 1860, country club, Republican had more than the abolition issue in common with today’s big government Republicans.

Lincoln formed the party as a big government, flat taxing deficit, running enterprise to encourage westward expansion. He wanted goverment to subsidize the canals and railroads, and encourage immigration, with deficit spending. (Hamilton started this concept of deficit spending equals immigration).

Abolitionists were great allies for more than one reason, the main one for Lincoln, was that he needed a free labor market for westward expansion. Republican pro-lifers, in a way, are the same, they want more free labor, not less, and are none to happy with the low fertility rate of their voters.

Funny thing, the progressive taxation, small government party was from Jefferson, evolving into the Democratic party.


 
Written By: Matt
URL: http://
Hey, John, one way to know when you’re succesfully putting up some original, non-partisan thinking is when the audience reacts in one hundred different ways and mostly fail to grasp you entirely.

So, props for that, dude.


Joe, I’m not going to bother making the argument for progressive tax rates to your condescending a**. I’m not particularly convinced that you’re interested in hearing it. You might want to consider that every country in the world with a functional tax system has them, though. I wonder why that might be? Why don’t you lead an honest investigation into why yourself? you might learn something. I mean, anything’s possible.

Here’s a hint to help you on your way: societies economically stratified by income tend to be what we quaintly refer to as "Third World Countries".

Have fun.
 
Written By: glasnost
URL: http://
If progressivity was introduced back into the tax system, and the stockholders of GM were deciding about health care, do you think they would pass that on to government? No, given the marginal cost, to them, of government healhcare, they would keep it private and within the company, or, if sensible, pass it down to the workers to manage.
This is exactly what needs to happen on that front.

It’d be a difficult, radical process, but if done properly it’d be a win-win if rather than simply dismantling these corporate healthcare plans the workers took them over. It’d basically redefine the role of labor, w/ the workers going from demanding benefits to saying "just pay us more and we’ll handle it ourselves". The current system is collapsing, and IMO a worker-controlled structure is the only thing standing between us and socialized healthcare.

As for the main topic, I’m actually shocked but other than the misportrayal of the current Republican strategy (Republicans haven’t said "look what the government is doing to you" for a long time. It’s been more like "If you don’t let us do X, Y & Z the f*gg*ts are gonna cause the collapse of society — if the terrorists don’t kill you first") I agree.

On that note: you guys have any thoughts on that Cato study about spending going up when taxes are cut? It was mentioned here, but that site has a subscription wall, I read about it on Kevin Drum’s site.
 
Written By: b-psycho
URL: http://www.psychopolitik.com
Let’s be very clear about some basic facts:

1) It is politically impossible to trim the federal government in any meaningful way;

2) It is politically impossible to raise taxes in any meaningful way;

3) Federal tax revenues will fluctuate, but will never, never, regardless of tax policy, come close to covering federal expenditures;

4) Borrowing to cover the deficit is, in the short term, less painful politically than raising taxes or reducing spending;

5) At bottom, those currently in charge of the federal government do not care
- not in any meaningful sense - about the long-term effects of deficit spending.

Nothing is going to change. This isn’t a political issue in the conventtional sense of the word. It is a generational issue. The generation in charge today is simply not interested in the furute fiscal health of the United States. And that is something that cannot be changed. Sure, they may say they care, but they are not about to do anything meaningful about it. There are many reasons why, but the reasons why are meaningless. Only the effects matter.



 
Written By: mkultra
URL: http://
William A. Niskanen’s original essay in
the Html version regarding the relation between taxes and goverment spending.

Conservatives knew this all along, and I bitched and complained to the economic writers at National Review online for years, they would ignore and deceive. William Niskanen wrote that essay in 2003, I believe, why has it taken so long to acknowledge the problem?

The National Review writers, go there and look, Kudlow is great at this. They claim, oh, look at this boom. Well, government consumes nearly 40% of the economy mandates and direct, and the federal government grows at 7.5%/annum, deflated that accounts for much of the growth, and immigration the rest. In there somewhere is a weak productivity growth. Who are they kidding?


Regarding the reversability of government growth. You raise, threaten to raise progressivity, and you will see all manner of CEOs and business groups working in Washington to reduce spending.

Seniors would gladly go back to work in a progessively taxed system. Why don’t we like to work at the bottom? Because we are paying for the government services that contribute most to the bottom line of those above us.

Like John Henke pointed out, if you need government stimulus, then set the progressivity curve so all levels feel marginally better about expanding goverment, and do the reverse to shrink the beast. Economics of supply and demand does work, it is our savior.

Why does government growth cause immigration? You all should know why. The private sector needs to readjust it’s size relative to the public sector. In a flat taxed system the problem is worse, because the lower rungs of the ladder are losing, marginally, for each new increment of goverment, and they need help to boost their productivity.

 
Written By: Matt
URL: http://
Jesus, MK, are you all right?

With a minor quibble on the wording of point #5, I could agree with that post.
 
Written By: Mark A. Flacy
URL: http://
The only problem I have with a flat income tax is that it won’t stay that way. We started out with a flat income tax with a high zero-bracket amount.

The so-called ’progressive’ taxation doesn’t really cost ’the rich’ more. They just pass the higher rates along to their customers. Reagan nailed it: "Businesses don’t pay taxes, they collect them".

The consumption taxes are just more honest. It’s more difficult to delude yourself into believing that it’s OPM that way.
 
Written By: The Monster
URL: http://
Glasnost, you good human are an insulting and demeaning, possibly arrogant self-righteous oaf...much of your "argument style" is to make assertions and then in rebuttal insult your challengers. I’m forced to conclude you really DON’T have an argument, you have a set of BELIEFS, that SHOULD be self-evident to all, but sadly they’re not. You might want to work on that delusion you’re suffering from.
 
Written By: Joe
URL: http://
My pet tax idea is to index the federal income tax rates for each citizen based on the amount of spending their Senators and Representatives voted for.

If you elect big spenders, you pay higher taxes, and it ultimately puts the accountability where it belongs - with the voters. It’s not "you get what you pay for" but rather "you pay for what you get."

It can work with either a flat or a progressive income tax, and it can even work with a sales tax. A progressive tax system creates a potential problem, since if the difference between the bottom and top brackts is large enough, then folks in the bottom are still spending "other people’s money" but coupled with a couple of simple rules (e.g. "the top bracket can’t be more than twice the bottom bracket" and "no more than 10% of the electorate can be in a zero percent tax bracket") even a progressive system can make voters responsible for the spending they want.

 
Written By: John
URL: http://
My pet tax idea is to index the federal income tax rates for each citizen based on the amount of spending their Senators and Representatives voted for.
Other than the tiny detail that it will never happen, I like it! It would have to be a running average, though.
 
Written By: Mark A. Flacy
URL: http://
The phrase small-government is one of the more dishonest slogans on the right. In practice, it almost always means big enough to help me, too small to help you.

So if you’re a defense contractor, a bank or a large land owner; you can count on big-daddy-gubmit to help you with fat contracts, courts and torts and police to protect your property. If you’re one of the little-people, sorry. We don’t believe in that. You need to learn to take care of yourself.
 
Written By: sal
URL: http://spookypeople.com
From the natinal Review:

"The congressional Joint Committee on Taxation (JCT) and the Treasury Department’s Office of Tax Analysis (OTA) develop revenue estimates, and in the process they use static models that assume some aggregates will not be altered by rate revisions. Dynamic scoring, however, attempts to measure the feedback-effects ignored in these models — those feedback-effects potentially becoming excellent ammunition for supply-side policymakers and tax-cut advocates. "

Right, use dyamic scoring, and we will discover that when rates flatten, folks with higher ROI buy more government, and their ROI increases more rapidly for each new increment of government services.



 
Written By: Matt
URL: http://
1. There’s no free lunch.
2. Incentives matter.

While (1) is true, it’s very possible to get a "relatively free lunch" — that’s when somebody else pays. Free to ME ME ME.

(2) means that there is a big incentive for all involved in the gov’t spending system to try to get that "free lunch for me". — this is the corruption inside of democracy (and all gov’t.)

Addiction to, and desire for more, OPM - other people’s money.

How many Libertarians does it take to screw in a light bulb? None, the free market will take care of it ... zzzzztttt, most voters do NOT like waiting for the (better, cheaper, but unplanned) market solution. Voters vote for ACTIVE politicians.

Only by increasing the "cost" of receiving gov’t money will the demand for it be reduced.

My solution: Tax Loans. Instead of gov’t grant cash for programs, the Feds give Loans — and those who receive benefits pay the loans back.
 
Written By: TomGrey
URL: http://tomgrey.motime.com
I think mkultra is correct.

It may sound tempting to shift attention to procedural reforms when substantive ones are unpopular. Devising different rules for collecting and paying tax, voting on expenditures, etc are all attractive, but are they any more politically possible than substantive reforms?

Without giving it too much thought my instincts tell me that the current procedural rules exist as they are because they maximize benefits to the politicians in power. Why would they ever change them?
 
Written By: Steve Podraza
URL: http://
Try a little dynamic scoring of our own using the numbers from Niskanen’s paper, which state "federal spending increased by about one-half percent of GDP for each one percentage point decline in the relative level of federal tax revenues.

Bush cut overall taxes roughly by 15%, so the federal budget should grow from 19% of GDP to 26% of GDP, and we are headed there, probably why the fed is so concerned. The growth in federal government is the reason that interest rates rise, trade deficits soar and immigration is out of control.

Who is doing the buying of government services? Big government Republicans, often with the support of the conservative base. In particular it is the upper income who are buying government services, because when your income bracket earns 80% of the money but pays 50% of the taxes you can see what a bargain government is.

This is old economics, but it got lost in the post civil war era because central bankers were confused and inflation was all over the map, balance of trade payments were inefficient, and trade protectionism distorted economic data, plus peacetime government was small enough that a small government model was sufficient.

Investment in government can work when there is real stuff we want the government to do, like build the highway system. Eisenhower did this with flat rate gas taxes while the upper income tax bracket was still around 90%, and it worked, it was real growth, even if you include the pricing power this brought steel and auto.


 
Written By: Matt
URL: http://
While I appreciate many of the fine ideas presented here, it seems to me that a vote for the GOP (Grossly Overpaid Party) is a roundabout way of stalling the inevitable demise of America. Conservatives have been saying for 50 years how we need to vote in more conservatives to "fix" their party’s platform is just fluff. There is no fixing a duck with a broken leg on a busy highway. The very fiber of the two-party system is to blame the "other" party while in some cases practicing similar gov’t practices. ("They tell the truth about each other, but rarely about themselves.") I personally do not see the sense in voting Republican on the basis of "so dem Democrats don’t get in" when history is showing me the RNP might be for even bigger gov’t than the Dems. Isn’t that irony!

It’s time for me to move on, and I believe a vote away, anything, is saying we need a change. Our current system loves compounding more and more gov’t at the expense of individual freedoms. I’m not waiting another 50 years for them to fulfill their promise.
 
Written By: A dying duck
URL: http://
Alan’s hostility to the ’right to life’ movement is absurd.

Alan, don’t you understand that to have a Victorian state you have to have a Victorian culture and society ? Don’t you understand that a liberal culture of two child families will HAVE to turn to the state to look after them in their old age ? Don’t you understand that a young mother without an extended family to help her will HAVE to turn to the state as a safety net ?

Old age care and childrearing were always collective enterprises by the extended family. Not these rugged individualist undertakings of libertarian fantasy. Without the extended family, and in a society where wage scales so massively favor educated people that it is in an educated woman’s socioeconomic self interest to defer maternity until her education and professional apprenticeship periods are over, in effect, the last possible biological moment, people will inevitably look to the state to care for them in sickness and old age.

This makes small government conservatism an ideology whose appeal is confined to those who can afford to pay people to take care of them.
 
Written By: Charles Warren
URL: http://

 
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