19 July 2011

Republicans Raise Taxes

Republican's new balanced budget amendment proposal requires government spending and tax revenues to be equal (hence the balanced) and set to 18% of GDP.

Curiously, this is roughly what taxes have averaged over the last few decades. It is also about 3 percentage points higher than it is now, at roughly 15% of GDP.

So, the Republicans have finally agreed to raise taxes.

The amendment will never pass, and there are so many good reasons it shouldn't. But one overlooked fact in all this is that this amendment is the Republican's first admission that with taxes the lowest they have been in Obama's lifetime, we might have to swallow the bitter pill of tax hikes.


Bald Al said...

The GOP hasn't yet agreed to raise taxes. And they'd never admit to it if they really did, would they? In fact, one could most likely point out to them your argument and they'd find a way to say you're incorrect.

As for me, I wouldn't mind lowering business taxes *IF* they start taxing cash assets. Businesses have grown revenue, but, for the first time in 50 years, revenue growth has not led to job creation. There are no incentives to spend revenues, so businesses are simply growing their cash reserves. There is ZERO evidence tax breaks have lead to job growth, yet the GOP keeps raking in lobbyist money to keep the tax breaks in place.

We need people back at work to stimulate the economy. Why is this so hard to understand?

Anonymous said...

Texas has been under GOP control for quite a while, and while it's true that our taxes are relatively low, our fees are outrageous.

This is a great place to be rich, but a lousy place to be poor. It's a model that should be scrapped, not nationalized.

Lifehiker said...

Facebook has taken my attention away from blogs until recently, but I'm returning to my roots - one of which is this blog of yours.

I've got two beefs about the republican position on taxes. First,their constant talk about "small business" being hampered by increasing the tax rates for high earners is a smokescreen; those who would be impacted the most are corporate managers as well as professionals like doctors, lawyers, and brokers of all types. With all due respect, these are not the folks who "create jobs" through entrepreneurial efforts.

Second, the tax code is already overloaded with breaks for high income people and those with large investment portfolios. The actual federal tax rate paid by many in the high income group is far less than one might guess from hearing the republicans spout their anger over rates. A consolidated gross income to net tax analysis of all tax returns showing gross income over $1 million would embarrass Eric Cantor, I believe.

The bottom line, in my experience, is that a great many rich folks think their piggy banks and toy chests are the most important things in life, and that they "deserve" to increase both by whatever means. They pay dues to the republican party to improve their leverage. That's why Obama's got to at least get a split decision in this epic fight.