Conservatives Who Don’t Cut Taxes

British conservatives have apparently listened to Goldwater. Sadly, Goldwater’s same-country heirs have, by and large, not.

You are missing the larger picture, which is that neither party is committed to fiscal soundness, Goldwater's first priority.

We're still waiting for the spending and size-of-government controls (which Goldwater sought, and which was part of what 1964 was a referendum about). This is the antithesis of the lofty overvaluation of those like Olympia Snowe who apparently define Acceptable Republican as well as "moderate" or "centrist" "conservative" or "Republican" as never questioning the growth of government size or spending (so long as it is for "acceptable" or never-to-be-questioned reasons, that is).

OK, DLS -- but last I checked, the Baucus bill that Snowe voted for would actually reduce the deficit. That's fiscally responsible.

Pete, it's more fiscally responsible than ignoring deficit spending or deliberately increasing it- but real fiscal responsibility should also look at how all resources should be allocated. A massive spending bill paid for with massive tax increases during a period when we need private sector economic growth is not my idea of fiscal responsibility (not to mention the various bookkeeping sleight of hand tricks, postponing the spending parts until later years while starting the tax increases from year one, etc.)

As for the main topic of the post...as usual, hardcore ideologues often fail to understand their ideology well enough to know when certain principles should be applied under certain conditions (or certain parts of the economic cycle) and when the principles should be adjusted. I mean, I'm no economist but it doesn't take a Nobel laureate to understand that moving from a very low tax rate to a somewhat higher one will probably boost revenues in a fairly straightforward manner, while tax hikes imposed on already highly taxed individuals or corporations will affect behaviors in ways that will then fail to produce the anticipated revenue increases. Also, of course, behavior changes happen more in certain environments (when the participants have a choice, as in state taxation which can drive businesses and individuals to other states if the taxation is relatively lower in other places.)

All of those things should be taken into account before advocating changes in tax codes- and neither the knee jerk liberals who think that it's always possible to pay for every big govt wish list by having the rich pay 'more of their fair share' are just as guilty of shallow ideological understanding as are the Club for Growth Republicans who always advocate reducing taxation in every situation.

CStanley -- You once again make some very good, cogent, compelling points.

Thanks. This is something I've thought through a bit with regard to my difference of opinion with the Blue Dog Democrats (and a few others who are somewhat more fiscally conservative than the rest of the Dem party.) They advocate PAYGO rather than deficit spending, which sounds great- except when PAYGO then seems to mean paying more and more and more without an end in sight.

I think that Snowe fits very much with that philosophy, having a fairly reasonable concern for deficits, but none of this group seems to have a healthy enough respect for the other concerns of crowding out private sector investment and growth through high taxation.

"the Baucus bill that Snowe voted for would actually reduce the deficit. That's fiscally responsible"

It would reduce deficit projections, yes. But how? By new taxes (and required insurance payments or fines, which in effect also are taxes). This is at cross purposes to deficit spending (worse than ever by Washington), which is being sought and defended and advocated in the name of combating or curing the deficit. (This actually undercuts the rationale for as well as the weight of the argument that the Baucus legislation's purported lower-deficit figures are good. Won't the money just be spent on something else, anyway, similar to the "peace dividend" phenomenon, currently for "stimulus relief"?) Not only that, but yes, there would be spending reductions -- which sound good, but the reductions are to Medicare, which increases the insufficient-provider-payments problem with Medicare (moving it closer toward the problems with Medicaid), which actually leaves Medicare worse off. (The underpayments-to-providers problem is a serious one, because it raises the problems not only of cost-shifting but also of access, which is solved only by making everything public and non-avoidable by providers, but which is a poor solution if it means underpayments to all providers, all the time. Who wants care at the hands of the underpaid, who resent it or cut corners in some way to remain or to become providers?)

"none of this group seems to have a healthy enough respect for the other concerns of crowding out private sector investment and growth through high taxation"

That's an essential point of many alternative definitions of "moderate" or "centrist" Republicans (and of "moderation" and "centrism"): definitions that specifically excludes such concerns, in fact does not question these things much if at all.

"as in state taxation which can drive businesses and individuals to other states if the taxation is relatively lower in other places"

This is the object of "harmonization" and of federalizing as much as possible to eliminate escape.

"real fiscal responsibility should also look at how all resources should be allocated"

Not only that, but the real issue here, with health care and the Baucus version of the Dem "reform" effort, has always been _reform_, and the arguments made here in favor or disfavor of decisions involving the intervention of the federal government (and the effect on its finances) evade the core issue, that reform is what's sought and reform doesn't require anything that necessarily effects federal finances at all. Reform can strictly consist of changes to the laws governing health insurance that better meet the needs of the people in getting health care (and the people as buyers and customers), rather than involve Washington as a payer or provider in any additional or changed way.

Is there somewhere a real risk that the rich will "take their ball and go home" if they feel taxes are too high? They already exploit loopholes in existing tax structure to use offshore banks and hide taxable assets and income despite ever plunging tax rates. At what point would a wealthy person say, "thats alright, my taxes are fair". The answer, "never".

I think its all a lot of hooey. Wealthy individuals haven't stopped putting their money into the stock market because they fear having to pay taxes on the income. The money is there but it is currently being used to further money games that arent generating real growth. That fact has a very tenuous connection to anything doing with "tax rates". Meanwhile, the infrastructure that these rich individuals and corporations depend on is crumbling from lack of tax revenue to keep them in working order. The army that protects their overseas investments. The schools that produce their workforce.

I call bull and say its not that Goldwater reforms haven't really been adequately implemented. I think there's been ample demonstration that the philosophy is flawed and will not produce the intended results. Instead its only destroying the middle class. We are already seeing the wall street rich begin to "eat themselves" as they run out of pensions and middle class investors to rip off.

There is absolutely no reason to consider Republicans fiscally responsible.

None. None.

Agreed, only less fiscally irresponsible than Democrats.

"Is there somewhere a real risk that the rich will 'take their ball and go home' if they feel taxes are too high?"

There's nothing wrong with that, but the question that must then be asked, is, where do they go?

They can park their "ball" (their wealth) in offshore tax havens, but greedy as well as power-hungry (as well as, eventually, more desperate) Western governments already have started acting against these, in addition to seeking "harmonization" (synchronizing everyone's tax and regulatory ratchets as they all get moved upward).

A few can leave for other nations (tax havens or people-havens, with their wealth in tax havens) and can renounce their citizenship. They ideally can then become diplomats and then can return to the USA or other Western nations and continue living there, but without tax oppression and even with diplomatic immunity from much more, too! (Nice if you can land a gig like that.) But this is available only to a few as a practical matter. Plus, this hasn't gone unnoticed, and in the USA has seen resentful legislators act against the practice and the people.


This,

http://www.nytimes.com/2006/12/18/world/18expat...

so, this:

http://www.azstarnet.com/sn/byauthor/244759

http://travel.state.gov/law/citizenship/citizen...


They won't leave the USA or other Western nations -- that's why federalizing (nationalizing) everything, as wrong as it is (and often viciously or pathologically motivated), works so well by lefties. (It's merely a coincidence that many people are perfectly at ease with such centralization, view government as parent, but a fortuitous one for those who want to centralize and consolidate things and reduce tax flight.)

Leonidas, you are either kidding or have some evidence of fiscal soundness to offer.

Show your work.

I'm not sure I'd even agree with that, but I'd say each party is fiscally irresponsible in a different manner.

Is there somewhere a real risk that the rich will "take their ball and go home" if they feel taxes are too high? They already exploit loopholes in existing tax structure to use offshore banks and hide taxable assets and income despite ever plunging tax rates. At what point would a wealthy person say, "thats alright, my taxes are fair". The answer, "never".

You don't have to get to a point where a wealthy person decides his/her taxes are 'fair'. But historical data does show that there's a point at which people stop putting so much time and effort into sheltering income (again, this isn't dependent on them deciding that fairness has been acheived, but rather on the diminishing returns of how much they can gain by going through hoops and hiring accountants who can creatively shelter their income and assets from taxation.)

Meanwhile, the infrastructure that these rich individuals and corporations depend on is crumbling from lack of tax revenue to keep them in working order. The army that protects their overseas investments. The schools that produce their workforce.
Oh please. With the size of the US federal govt's annual budget, you honestly don't think that the money could be allocated more wisely to address the real shortfalls in some of those needed areas? How about we ask Congress to spend on vital infrastructure before expanding safety nets to the middle class, and ask that they stop spending on pet pork projects back in their home districts, before they put their hands out for more revenue? With healthcare 'reform', we're being told that it's necessary because the current obligations are unsustainable, so Medicare spending will have to be cut. We're told that this can happen by cutting waste and fraud, not cutting actual benefits. Well, great...then take care of those problems and let us see the cost savings first, before messing with the rest of the healthcare system.

~~How about we ask Congress to spend on vital infrastructure before expanding safety nets to the middle class, and ask that they stop spending on pet pork projects back in their home districts, before they put their hands out for more revenue?~~ CS

Why does it have the be the middle class that gives up its safety net?

Far as I can recall in recent memory a lot of huge corporations and banks got a gigantic safety net - bailout, under the guise of protecting the essential financial infrastructure.

Pork barrel spending, while problematic because it limits its federal dollar benefit to limited number of constituents, is miniscule in the big budget picture and wouldn't amount to 1% of actual costs for needed infrastructure projects. Thats akin to saying we have to fix the broken tail light before we can replace the transmission to get the car going again.

Thats akin to saying we have to fix the broken tail light before we can replace the transmission to get the car going again.

What they're doing now is akin to spending money on a nice hood ornament before fixing the transmission.

The bank and auto bailouts were sold to us by Geithner and Obama as necessary to protect the middle class.

Why does it have the be the middle class that gives up its safety net?

Because it's always the middle class that pays for government spending, if not through taxes through higher prices. There are a lot more of them than the rich, and they have less flexibility to dodge financial bullets. When you raise taxes on the rich, you make it worth their while to shift investment strategies. When you raise taxes on corporations, you force them to raise prices on the middle class.

As for "ever plunging tax rates," I'd love a hit of whatever you're smoking. During the 20th century taxes more than tripled from under 10% to over 30%. Citizens of the US spend more of their money paying taxes than providing food, clothing and housing, combined.