rraley/Gude debates Round 1

[Larry Gude]

To all: Please refrain from commenting in this thread. It is rraley and I for a while.

Thank you!


Bush Administration Economic Policies

President Bush inherited an economy that had hyper heated via Wall Street.

The tech stock boom finally busted in late 1998 into 1999. People with $80,000 a year jobs and stock options were working for companies that didn't make money; they existed through 'burn rates' supported by hyper inflated stock prices.

This finally ended and these jobs went up with them. Turns out a great deal of companies from Enron to Global Crossing were lying about their books. Systematically lying.

So, the inevitable down turn. Job loss. Wall Street correction. This was the world when Bush took office.

What to do?

Cut taxes and defecit spending. What could have become a recession was kept to only being a fairly mild downturn.

If John Kerry wins, he will push for tax increase on the 'rich'.

That is class warfare. The 'rich' already pay most of the taxes in this country anyway. It will stall the economy and Congress will not, wisely so, support him in any event.


Standing by for your comments...

 

[rraley]

President Bush's Economic Policies

I agree with your assertion Mr. Gude that the economy was falling going into President Bush's term due to the fall of the tech market. President Bush's reaction to the tech market fall and the start of the recession was below par. His decision was to pass large tax cuts for wealthy Americans. This plan was wrong and you don't need to hear the case against it from a Democrat like me or John Kerry. Listen to Republican John McCain, who only has a lifetime rating of 20 from the Americans for Democratic Action...

We ought to cut middle-income and lower-income taxes. But I’m not sure we need to give two-thirds of that tax cut to the wealthiest 10% of America.

from Republican primary debate in Michigan January 10, 2000

I agree with John McCain, the Bush tax cuts of 2001 and the ones of 2003 should not have been geared towards people who make over $200,000 and big investors. According to a non-partisan government agency headed by former Bush economic advisor, Douglas Holtz-Eakin, President Bush's tax cuts has caused the tax burden to shift from the rich to the middle class. There is a fundamental problem with the Bush tax cuts in that they do not cut where they are needed to cut and they do not produce the intended results (The White House projected that the tax cuts would create 10 million new jobs).

The utopian concept from the Bush economic team was that these large personal tax cuts would increase the likelihood that the rich would invest in the economy and help it to rebound. Well, when the rich received their tax cuts, there was little in which to invest. The market was down and the economy was slowing. Thus, the only choice that the rich had was to keep the money in their own personal finances. The investment tax cut, meanwhile, provided the average investor with a twenty cent tax break while it gave Nike's chairman a $7 million tax break.

The investment tax cut did help to stimulate Wall Street investment somewhat - especially in the oil industry and the defense industry. This helped to create around 1.2 million jobs (there still has been a net loss of 1.8 million jobs since President Bush took office; far short of the 10 million he promised with his tax cuts). There has been job growth in the last four quarters, but actual job growth has consistently fallen behind expectations. Furthermore, these newly created jobs provide an average salary that is $9,000 less than the salaries that the old jobs provided. Workers' salaries have fallen behind inflation, causing their buying power to decrease. Meanwhile, a new economic aspect has been created called outsourcing in which companies send not only manufacturing jobs overseas, but service jobs as well due to loopholes in the tax code. It is estimated that outsourcing will cause a loss of 250,000 American jobs every year for the next ten years. What is the Bush economic team's response to this? They say that "outsourcing is good for the economy." I never knew that losing jobs helps the economy.

So what do we have to show for the Bush tax cuts? 1.8 million less jobs, a record budget and trade deficit, a shifting of the tax burden, lower buying power for the middle class, and the exportation of American jobs. Doesn't sound too good to me...

Stay tuned, later I will provide my argument for the Kerry economic plan.

 

[Larry Gude]

OK...you're not discussing...

...you're being partisan.

His decision was to pass large tax cuts for wealthy Americans

He passed tax cuts for everyone.

The question then, is this good or bad? The facts are that progressive tax rates and cuts for the middle and lower income brackets have left us where the lower brackets pay effectively zero or in some cases a negative rate, meaning they get back money they didn't even pay in. This is absurd.

The middle brackets pay rather small percentages, mostly less than 10% while federal spending alone consumes some 22% of GDP where the 'rich' pay some 37% of income.

So, I debate you is this good or bad? It is silly to argue outrage over 'tax breaks for the rich' when they are paying the VAST majority to begin with.

You want me to start quoting Zell Miller? John McCains constituency, the media, run to him on a regular basis for a sound bite so now, he has become the arbiter of right and wrong? McCain voted for the tax cuts. You want me to debate McCain or you?

Let's take our time here and move on one point at a time. We'll work to your other points in due process but I will say your points sound an awful lot like a partisan speech, not a reasoned debate.

So, for now, progressive rates and the massive burden on the rich?

Progressive rates GUARANTEE a convoluted tax code and serious motivation to seek influence. It is normal behavior for one to seek to reduce taxation. It is unfair and confiscatory to take the position: From each by his means to each by his needs.

It is aka communism.

President Bush is working towards a more fair and more reasonable tax policy for all Americans.

Your turn...

 

[rraley]

First of all, you should know that John McCain opposed against not only the original Bush tax cut proposal in 2001, but voted against the final version as well (he was one of only two Republicans to vote against Bush on that issue). Don't want to get hung up on John McCain, but I just wanted to set
the record straight there. Also, there is no federal income tax bracket that is established under 10%. 10% is the lowest tax bracket and it increases up to 35%.

As for your other points...

I am not sure if you fully understand how the progressive tax system is established. There are no blanket tax rates for people with certain incomes. The current tax code is structured so that a tax filer pays taxes on a certain portion of their income at the appropriate rate. For example, a married person with an income of $400,000 pays 10% of their income from $0 to $14,000. They then pay 15% on their income from $14,000 to $56,000 until they reach the top tax bracket, which requires that all income over $311,950 be taxed at 35%. When federal income taxes for this hypothetical married person are calculated free of any tax credits or other deductions, it is found that he or she pays about $65,743.50. This figure represents 16% of their income. Only 16% of their income comes to the government by way of federal income taxes (and it is almost always less with the aid of some very skilled tax lawyers). This while, the top 1% (which is defined as people whose income falls in the top tax bracket as is the case for this hypothetical case study), owns 40% of the wealth in this nation. I fail to see the unfairness in this or the connection to communism (if there was an income level that was taxed at 100% or near it like the tax system used to, then I would agree with the communism connection, but this is just fairness if you ask me). Is a progressive system unequal? By some accounts, I can understand how you see it that way. Consider this analogy: There are two broad groups of players on a football team, linemen and skill players. Linemen weigh, on average, about fifty pounds more than skill players on my high school football team. Because linemen weigh more, doesn't it seem natural that they should be expected to lift more weight than their less bulky skill player counterparts? The affluent can lift more weight, like the linemen, because they can and should. They pay roughly to the same extent as lower-earners; what is the harm in that?

That is how I feel about the progressive tax system in our nation that has been in place since World War I. Now, Mr. Gude, what is your rebuttal to my assertion concerning the effectiveness of the Bush tax cuts at creating good jobs?

 

[Larry Gude]

The fact that...

...you suggest agreement if tax rates were even higher, as the 90% percent rates were that President Kennedy got rid of, suggests hope for you. At this point, it seems it is a matter of degree to you; not unfair enough at this point.



A million dollar earner paying 10% of his income pays $100,000.

A $10,000 earner at the same rate pays $1,000.

A 300 pound lineman benching 100% of his body weight benches 300 pounds.

A 200 pound running back doing the 100% is 200.

The ONLY reason progressive rates exist is because rich people are a voting minority and it can be shoved down their throats. Any liberal or even fairness advocate should, intelectually, abhor progressive rates.

In return for the flat out unfairness of progressive rates, rich people push for and get endless tax breaks that turn our tax code, like campaign finance laws, into a sham. This is corrupting and it is one of the many reason people don't vote. They feel, often rightly, it doesn't matter. The rich will 'get over' anyway they cynically feel. What, like there is some sort of civic virtue in not trying to reduce your tax burden?

Our million dollar earner has $900,000 left to spend as he sees fit. A bigger home. A boat. Travel. Investment. In every case he is infusing our economy, as he sees fit, with capital which means jobs for others servicing his wants and needs just as his satified the market place in a manner to earn his income.

The bottom line is who should be spending the $900,000? You say the federal government should take it at a higher rate because he 'can afford it'.

I say, if so, if he is going to be paying for more than his fair share of government is he then not entitled to more control?

In both cases, taking more of his money and giving him more control is wrong. You should recognize it instantly as un-Democratic

Meanwhile our $10,000 man is paying $1,000 for government.

The cheeseburger argument is flawless and exposes in the simplest terms why progressive rates are wrong and bad for us all.

Why should you, as a millionaire, pay, say $50 for a burger and HAVE to buy it, and I, as Mr. 10K pay $2.75 for it? Surely you can afford it.

This is confiscation and unfair. It invites corruption. It begs class warfare.

At some point you will demand preferential service, BECAUSE YOU CAN AFFORD IT, perhaps move to the head of the line for your $50. You might even buy into the restaurant. I can't do that.

The 'rich', as a simple matter of representative Constitutional law guaranteeing equal protection, neither deserve having to pay more than their fair share nor gaining more power based on some arbitrary opinion that they 'can afford it'.

Totally fair would be a set rate for each citizen, say a flat $1,000 each. Paying a percentage of income is a wonderful compromise. We all pay 5% sales tax in Maryland.

Hell, I can argue that you, as a millionaire, shouldn't have to pay a dime in taxes. You provide way more to the economy as an individual than I, Mr. 10k,
do.

What do you think about that?

 

[rraley]

Well, Mr. Gude you make a good populist argument for the conservative concept of a flat tax (something that President Bush has not endorsed). I still do not agree with your assertions regarding the unfairness of the progressive tax system at its current levels. The rich have gotten the most from American society, and they should provide back the most to American society.

I understand your desire for a simplified tax system that would be easy to follow with a flat tax rate and no deductions/tax credits, but the fact is that our tax forms are legal documents, and legal documents are by nature long-winded and hard to understand. Most flat tax proposals come complete with removing the Child Tax credit, the college tuition tax credit, the Earned Income Tax credit, etc., etc. If we remove all the tax credits in our system, we would have lost a major free market tool to help families and businesses. Without these sorts of tax credits, it would be harder for families to send their children to college and not only would that student's life be hurt, but our nation as well as more and more students lack the education they need to advance our society. Without tax credits, people would have no incentive to buy the electric cars that decrease our nation's dependence on foreign oil. Without tax credits, businesses would lack the incentive to create good paying jobs for average Americans.

A flat tax system will cut our tax revenues, creating even higher budget deficits that lead to long-term economic pain, and will hurt the average income earner at the expense of "fairness" for the rich. The current system is fair...the top 1% pays about 20% of their income in federal income taxes while they own 40% of the wealth in this nation. A complete removal of the system would be dangerous and would hurt our nation.

 

[Larry Gude]

Huh...

I still do not agree with your assertions regarding the unfairness of the progressive tax system at its current levels. The rich have gotten the most from American society, and they should provide back the most to American society.

The rich have EARNED, not 'gotten', the most. They DO provide back the most. They spend their money. Do we call this one an impasse? I don't see you doing anymore with this than ignoring the truth, that progressive rates are unfair and are corrupting.

Next:

If we remove all the tax credits in our system, we would have lost a major free market tool to help families and businesses.

I guess nothing makes me shake my head in more disbelief than this. The reason, as I see it, for a kid to go to school is to gain education, not take advantage of a tax break.

There is not a kid in this nation who can't go to college for lack of money. There is so much cash floating around for school it makes me blush. Don't even bother trying to argue otherwise. I know the system. We're in the middle of sending a kid off to school.

The reason a business should make a given decision is to MAKE MONEY.

If you feel that taking advantage of tax incentives are so all important then I'd argue that you surely see why people would, conversely, try to avoid tax penalties.

Can we at least agree on this?

 

[rraley]

I think that you have exaggerated my position on tax credits. I am not saying that tax credits should be the sole reason for businesses to hire or for kids to go to college. What I am saying is that tax credits provide incentive, and encourage these sorts of things to happen. Furthermore, I fully understand people trying to avoid taxes and taking advantage of the tax credits placed forth in this nation - that's what the system intends for us to do. Why would Congress pass a tax credit if they didn't expect people to use them?

As for this quote from you...

I don't see you doing anymore with this than ignoring the truth, that progressive rates are unfair and are corrupting.

Mr. Gude, there is no truth besides facts in a debate about the fairness of the progressive tax system. By saying that I "ignore the truth," you are adhering to the Michael Moore school of "facts." The facts in this case are that income up to a certain point is taxed at the appropriate rate and this rate increases from 10% up to 35%. What is an opinion and not fact, or "truth" as you put it, is that this system is unfair. My statements saying that the tax system is fair for all people is not fact or "truth." It reflects what I have concluded from my observations.

It appears to me, Mr. Gude, that you judge fairness based on superificial items such as the comparison of tax rates. The measure of economic fairness, however, runs much deeper than that. My definition of economic and tax fairness means measuring the affluence and prosperity that tax rates create. Since President Bush's tax cuts were instituted we have seen a recent trend of declining average household net worth for the bottom 40% of Americans on the ecnomic scale, a small increase for the middle 50% and a much larger increase for the top 10%. The bottom 40% has seen a decline of about 5% of its average household net worth since the Bush tax cuts were enacted. The middle 50% has seen an increase of 1.2% in its average household net worth since the Bush tax cuts were enacted while the top 10% has seen a 2.8% increase in its average household net worth. (source for stats: Edwin Wolff's recent article "Recent Trends in Wealth Ownership") Is it fair that the Bush tax cuts produce such a wide range of differences among the economic spectrum in terms of creating affluence and prosperity? Heck, for the near majority of Americans, the Bush tax cuts actually decrease their net actual worth. This development is much more indicative of the unfairness of the Bush tax cuts, which as you say, move us towards a fairer and more reasonable tax policy.

 

[Larry Gude]

Man o man...

...I'm starting to feel attacked here.

you are adhering to the Michael Moore school of "facts."

This thread was started to give you fair hearing on your position that politics is about compromise and that consideration should be given to ideas. To quote you:

I believe that the art of politics is compromise and the understanding on both sides that the other is not evil and completely wrong on everything.

So far, only one issue in to our epic series of debates by the way, I have offered up my opinion that progressive rates are clearly unfair, which I illustrated in a number of ways, that they are corrupting, which it would seem to me is obvious to everyone as Congress gets used as a special interest tax break piggy bank and that the President is right to try and fix this problem, to make it more fair.

In response from you, I have yet to see one ounce of consideration or even a hint of compromise that maybe, just maybe progressive tax rates are wrong and are a huge problem. You don't seem to be receptive to any alternative and clearly dismissive of the ONLY fair tax, a flat tax. Yet you understand the motivation to avoid higher taxes and the motivation to take advantage of tax breaks.

Progressive tax rates stand as fiscal penalty assigned to a minority who can do nothing about it. That is oppression and contrary to our Constitution.

They can afford it you say. I have yet to hear an intelligent excuse for why a person should have to pay more for a hamburger or a higher tax rate simply because they can...'afford it'.

So, if you like, we can state for the record that my position is that progressive tax rates are clearly unfair and corrupting and that you are all for them until such time as you judge they are excessive. If this is agreed, that these positions make compromise impossible, then we'll move on to Social Security or Iraq or medical expenses or your choice.

What say you?

 

[rraley]

...I'm starting to feel attacked here.

I'm sorry that you feel that way; it certainly was not my intent. I was attempting to make a joke about Michael Moore's ineptitude at claiming opinion as fact and thus appeal to conservatives that see his movies as so terrible, they shouldn't be viewed.

In response from you, I have yet to see one ounce of consideration or even a hint of compromise that maybe, just maybe progressive tax rates are wrong and are a huge problem

You made very good points for your position and I responded with my own. While I thought that your points were good, I do not see them as pressing enough for me to change my opinion.

I have yet to hear an intelligent excuse for why a person should have to pay more for a hamburger or a higher tax rate simply because they can...'afford it'.

There are scores of things that this federal government has to provide for. This ranges from the defense of our nation, education for the next generation of leaders, Social Security for the aged so that they do not fall into poverty during their time of greatest need, etc. The funding for all of these things has to come from somewhere and the only form to provide funding is the levying and collection of taxes. We can do that through three main systems: a regressive tax, a proportional tax (a.k.a. fair tax), or a progressive tax. A progressive tax system allows the amount of income that every wage earner takes in to be taxed fairly as it allows people with low, medium, and high incomes to grow together. A flat tax, and by extension, tax cuts geared towards the rich, will only aid the top and not the middle or bottom. That doesn't sound fair to me at all.

Progressive tax rates stand as fiscal penalty assigned to a minority who can do nothing about it. That is oppression and contrary to our Constitution.

Now, Mr. Gude, if you want to base your argument for a flat tax on the "oppression" of those with the highest incomes in our nation, then go ahead, by all means. The rich are not "oppressed." If they were, they sure as hell would not be rich.

So, if you like, we can state for the record that my position is that progressive tax rates are clearly unfair and corrupting and that you are all for them until such time as you judge they are excessive. If this is agreed, that these positions make compromise impossible, then we'll move on to Social Security or Iraq or medical expenses or your choice.

I am for the progressive tax system that we currently have because I do not agree with your assertion about its "unfairness" and how it "oppresses" the rich. I would like to see the top two tax brackets to be returned to their pre-2001 levels so that the budget deficit can be brought under more control. I would also like to see the bottom tax level decreased to 8% so that about a $222 tax cut would be given to all (including those rich folks, who have to currently pay 10% of their income from $0 to $14,000).

I am prepared to accept your offer here and move onto another issue, seeing as we have exhausted this one. While I was not convinced to back away from my position and neither were you, I would like to note that we were civil throughout this debate here and respected each other's points. That is the essence of politics - respect, tolerance, and when the situation calls for it, compromise. I personally would like to discuss health care, but if you want something else, I am definitely flexible.

 

[Larry Gude]

rraley...

...I was all for everyone seeing 9/11 F and said so in these forums at the time. To me, there is nothing funny about Moore and he represents a school of thought that makes up a very significant percentage of your party (assuming you are registering as a Dem). The more people who hear his opinions, the more discredited the radical left becomes, the better off we all are.

While I thought that your points were good, I do not see them as pressing enough for me to change my opinion.

Good. Then seeings how I have the votes in both chanmbers, you won't mind if we keep cutting rates?

There are scores of things that this federal government has to provide for.

YIKES. There are only two.

The documents says "...to provide for the common defense and to promote the general welfare..."

I'll start another thread concerning defense. As far as promoting the general welfare, that encompases, in part, economics, so we can keep working on that here.

Our Federal Budget is OVER $2.2 trillion dollars which is over 22% of our GDP of $10 trillion or so. That is $7,500 for every man, woman and child in the country.

That's $45,000 for my household alone.

Now, I don't know how you want to look at the numbers but I am NOT paying $45,000 in taxes, which in a nation of equals, is my family's share. Somebody or something else is paying the differnece and they're going to want power and influence for their money.

We're spending $400 billion on defense or $1,300 per man/woman/child or $4,000 for my house. That means the #1 item on the federal to do list, provide for the common defense, is getting one dollar in eleven.

So, $41,000 is promoting the general welfare.

Maybe this is to simplistic to you but it is a very effective way of getting ones hands and brain around a very large thing; the Federal Leviathan.

Does there seem to be maybe just a little tiny bit of room to cut in that $41,000???

We are debating here, economic policy, for promoting the general welfare in order to form a more perfect union.