Asymmetrical Information

It takes some nerve to start fudging your support for the Democrats this quickly, Jane. That's kind of pathetic. As if you couldn't have foreseen this "bad feeling" of yours before you went into the voting booth yesterday? Doesn't say much for your ability to look ahead.

Or maybe sooner when/if the idiotarians who drank the “divided government” Kool-Aid realize that all they’ve done is guarantee another two years wasted with no sort of entitlement reform as the baby boom generation gets closer to retirement and the unfunded liabilities of Medicare, Medicaid, and Social Security increase by another $600 billion a year.

Meet the new bums, same as the old bums, except for immigration, judges, and maybe taxes. Wheeee!

I hope this resignation of Rumsfeld isn't an example of how quickly Bush will cave in to Dem's demands. He already wants amnesty for illegals, so that's a given. He has shown he will restrict free trade if expedient (remember steel). And mucking around with the pharms and medical insurance industry will most likely happen. No tort reform, no death tax reduction, no fair tax, no (partial) privitization of soc sec, really nothing until we get a fighter in the White House.

Buyer's remorse: well, duh.

Thorley: it's not like the R's have managed entitlement reform, unless you count the stupidly complicated and massivly expensive medicare drug bill or the proposal to offer social security to illegals to be "reform."

Mark,

I think you're being a bit unfair to Jane. Who ever gets to vote for
what they want? Did you?

The GOP is about 18 votes short of a majority in the House. There are 37 Blue Dog Democrats in the old House, and there will likely be more in the new House.

If Pence and Shadegg win Minority Leader and Minority Whip, there's potentially a solid working majority in the House for balancing the budget by cutting spending.

Thorley: it's not like the R's have managed entitlement reform, unless you count the stupidly complicated and massivly expensive medicare drug bill or the proposal to offer social security to illegals to be "reform."

I think it will be interesting to remind people who waved brooms around, and demanded the "bums be swept out", just exactly who it is they have swept in from time to time. John Conyers will most likely chair the House Judiciary committee; he'll be in a position to use the threat of impeachment proceedings against the White House to enforce compliance. Not that GW Bush seems prone to veto much of anything, but with the threat of being "Nixonized" on the horizon, he'll likely comply with the wishes of the Congress. Dumping Rumsfeld this A.M. pretty much shows the direction, and the strain in Bush's voice as he equivocated around the question of "is this in response to the election" wasn't pretty to hear.

So let's review just what you've signed up for, Jane, just off the top of my head:

Tort reform is now dead. Social Security reform is now dead. Medicare reform, except as part of expansion into single-payer health care is now dead. Free trade agreement expansion? That's dead, too, Jane. But not to worry, raising the minimum wage to $7.00/hr or more, with further increases tied to the CPI is sure to pass, and that's got to be more useful to the US economy than any old silly free trade agreements, right, Jane? Of course taxes, especially on "the rich" must go up immediately, and capital gains taxes must go up the most. I'm sure that'll help the economy too.

Oh, and the signing ceremony next spring for the comprehensive amnesty & fast track to citizenship for all illegal aliens (so they can vote the straight Democrat ticket in 2008) should be interesting to watch. Will Vincente Fox be invited, for example? How about Ibraham Hooper of C.A.I.R.? Representatives of La Raza Unida? It should be a real photo-op of the first order, on a par with Bill Clinton hugging Yassir Arafat in the Rose Garden...

To quote from a previous election:
"You broke it; you bought it"

Elections "settle" things only until the next election. Yes, the Democrats won big. They capitalized on voter anger over the quasi-disaster in Iraq and GOP corruption in Congress. It's the equivalent of 1986, 1998, and 2000 when they made solid gains in legislative elections.

Bush has to stop the bleeding or else the Democrats will also win the presidency in 2008.

You took a position whereby you spanked one group of children by replacing them with another just as likely to piss you off.

With that strategy, I'd say you get exactly what you deserve.

One good result for Republicans - Hastert steps down. A nice enoght guy, but nice doesn't cut it now.

Actually I am leading toward this actually working. I don't see the Dems doing to Bush what the Republicans - the blowback would simply be too huge. Let's give this divided government thing a chance. It's important to keep in mind that many of the Democrats winning this election are pretty conservative (in fact if you dropped them in the way back machine to 1976 - they would all look like Goldwater Republicans). So I am counting the Democrats to be more conservative than they have been in the past. As far as the legislative points (minimum wage) is not going to have much of an effect on anything as the labor pool is so tight now that almost no one gets paid the minimum wage. Great symbolic gesture - almost no real effect.

I think you're being a bit unfair to Jane. Who ever gets to vote for what they want? Did you?

Rarely do we get to choose someone who is exactly what we want, but whomever we choose is presumably more like what we want than the alternatives. I think you're weasling here like Jane.

Jane felt the Democrats were the better option, and here it is barely after noon of the day after the election and she is already fudging on her decision. I guess that will provide her cover for the next two years when the Dems get busy with their anti-libertarian agenda. "Why, I had my doubts about them way back in November 2006," she can say.

Ridiculous. Pisses me off.

Tort reform is now dead. Social Security reform is now dead. Medicare reform, except as part of expansion into single-payer health care is now dead. Free trade agreement expansion? That's dead, too, Jane. But not to worry, raising the minimum wage to $7.00/hr or more, with further increases tied to the CPI is sure to pass, and that's got to be more useful to the US economy than any old silly free trade agreements, right, Jane? Of course taxes, especially on "the rich" must go up immediately, and capital gains taxes must go up the most. I'm sure that'll help the economy too.

Bush gets more hard headed about the 'war' more troops die. Nation gets even more pissed in 2 years and the dems sweep again including the whitehouse.

prediction; the president or vice president will be a woman or an african american

Jane Galt,

I'm honestly just tired of all of this. I say let the Dems have their way. Don't obstruct or assist in any way. Whatever they say they want, let them have it. Leave them with no one else to blame. John Galt was right.

Thorley - the no negotiation part of Medicare Part D has always bothered me. Any company that doesn't use it's buying power to negotiate is leaving money on the table. It's a principle that works for WalMart and it should work for the US goverment but like most things it's in the excution that things will get fouled up.

"capital gains taxes must go up the most"

You know capital gains is taxed at a LOWER rate than payroll taxes right?

Being a little hard on the general electorate, aren't we? I remember back in 2002/04 when it was the Democrats who eagerly hopped on the "blame the stupid voters/you get what you deserve/idiotarians are ruining the country" brigade. Nice to see that they aren't the only ones who engage in self-righteous masturbation in response to their failure to garner an electoral majority.

I doubt you will be suffering buyer's remorse in the Spring. The remorse may come in January 2009, but not before (well, maybe November 2008 but you would get a temporary pardon).

The Democrats will not try impeachment, and the government will run on a continuing resolution for the next couple of years.

The only real chance of confrontation is if Stevens or Ginsberg dies on the bench and Bush gets to select a replacement. However, I am expecting that not to happen, and even if it did I am sure that both justices have told their staff to have them stuffed and placed in their seats for oral arguments until a Democrat president can be elected.

The silver lining. The Democrats will now be emboldened to run Hillary Clinton for President in 08.

Surely, even in their most frothing-at-the-mouth moments, nobody expects that ticket to win.

Thorley - the no negotiation part of Medicare Part D has always bothered me. Any company that doesn't use it's buying power to negotiate is leaving money on the table. It's a principle that works for WalMart and it should work for the US goverment but like most things it's in the excution that things will get fouled up.

Not really, the goal of Medicare Part D was to provide seniors with an array of options for different prescription drug plans rather than a “one size fits all” program. The way it is structured now, companies compete by offering different plans in different regions with different costs for different drugs which BTW has actually made them cheaper than a lot of the naysayers predicted and has allowed the market to work at developing new innovations. Having the feds “negotiate” on such a large scale only makes sense if you’re the sort who thinks that we only need one drug to treat a particular ailment.

Again, I was and remain opposed to Medicare Part D with the exception of the HSA’s and the introduction of means-testing (which never would have gotten past a Democrat Congress) portions. But since it was pretty much a foregone conclusion in 2001 that we were going to get some of drug benefit for Medicare recipients, I’m glad that Republicans at least tried to find a price mechanism that did relatively little distortion to the market (by having competition and an array of choices – something that Democrats hammered on as being “confusing”) rather than creating a one-size fits all program. Hopefully when we finally fix Medicare and Medicaid, Congress and the President will (since eliminating these programs is unlikely to happen) try a similar type of market-driven system so that we can keep the innovation that makes our health care system the best in world while using competition rather than government edict to control prices.

What ever happened to wanting an honest, accountable government? I thought that was also what libertarians wanted. Is your hate for taxes and minimum wage so great you are willing to turn a blind eye to corruption, cronyism, near complete lack of oversight along with all the other stuff like the a disasterous war that will be costing trillions, prisoner abuse, torture, etc? Why dont you just come out and say that you want a one party state (where that party treats you like dirt).

MS,

You've won. The blame game won't work anymore. Its time to actually do something.

Let a Pelosi led Congress pass some version of McCain-Feingold II along with public financing of elections and you will not have to worry about which party to be made at. There will only be one party left functioning in the US. Look at the District of Columbia as an example of what you get when the Republicans become non-functional.

I think Jane is afraid that the "good and hard" part of HL Mencken's quote is on the way.

You won't be having as much buyer's regret as the people Kathryn Lopez quotes today at The Corner:

"If Bush had vetoed a few spending bills, even to be overridden, more conservatives would have been rooting for his team this year."

Thorley Winston wrote:

I’m not sure that the Dems will be able to get a tax hike through that targets “the rich” but I wouldn’t be surprised if they try to pass some sort of “windfall profits” tax on pharmaceuticals, petroleum, or other politically unpopular industries.

If the recession starts in 1Q of '07 as I expect it to, "taxing the rich" will become a whole lot more politically acceptable, and hitting "Wall Street fat cats" in the capital gains wallet most especially. A windfall profits tax on petro, especially natural gas if this winter is even the least bit colder than usual (impossible, of course, with "global warming" I know...) would surely fly.

Oh, and when do the Bush tax cuts expire, again? I can't remember if it's '10, or sooner.

Maybe some sort of amendment to ERISA to allow States to implement “Wal-Mart laws.” Expect also to see legislation for importing Canadian price controls and/or trying to amend Medicare Part D to have the federal government do it through “negotiation.”

Oh, heck, I forgot that one. Killing off all profits for the pharma industry is indeed an important agenda item, along with requiring them to do more research...

"capital gains taxes must go up the most"

You know capital gains is taxed at a LOWER rate than payroll taxes right?

Yes, I know that. You know that it has not always been true, right?

The only thing the American people got in this election is two years of investigations to use as fodder to elect a Democratic President.

Nothing gets done for two years cept "make work" legislation which are obvious "duhs" to the American electorate.

Can't someone start a third party that isn't whacked out on issues to force real debate?

How about having a crusade across America for voters to vote for who they do not know. Big money, special interest and lobbyist can really take it in the shorts then.

The only thing the American people got in this election is two years of investigations to use as fodder to elect a Democratic President.

Nothing gets done for two years cept "make work" legislation which are obvious "duhs" to the American electorate.

Can't someone start a third party that isn't whacked out on issues to force real debate?

How about having a crusade across America for voters to vote for who they do not know. Big money, special interest and lobbyist can really take it in the shorts then.

"capital gains taxes must go up the most"

You know capital gains is taxed at a LOWER rate than payroll taxes right?

Yes, I know that. So?

Ellipsis - Why don't we wait to see what they do first? I mean really. No need to actually know what happens right? I mean you are getting worked up over thngs they haven't done.

As far a capital gains here they are (Usual legal disclaimers apply)

Current Capital Gains Tax Rates (as of May 30, 2004)

Stocks, Bonds, and Mutual Funds

* 8% - For individuals in the 10% or 15% income tax bracket who held the investment for over 1 year.

* 15% - For individuals in the 25% income tax bracket or higher who held the investment for over 1 year.

For example, if you buy 100 shares of Microsoft at $25 in 1999 and sell it at $30 in 2002, you would have a capital gain of $500. Assuming your in the 25% tax bracket, that gain would be taxed at 15%, so you would pay $75 of your $500 to Uncle Sam and put the rest of your $425 in your pocket.

Real Estate owned as investment

* 25% - For individuals in the 25% bracket or higher who own the real estate for longer than 1 year.

There's some more complication on real estate investments due to depreciation and possible improvements.

Collectables and Small Business Stock

* 28% - For individuals who own collectibles (such as stamps, coins, comic books, etc.) or small business stock and whose income tax bracket is 28% or higher.

Homes

* 0% - For individuals who have used their home as their primary residence for 2 years or more. You can exclude up to $250,000 of the gain of the home from capital gain taxes. If you are married, this can be up to $500,000 of the gain.

You can minimize your exposure on capital gains through various methods. Consult an over paid tax attorney. The easiest is to lower your tax bracket.

Looking through the various news websites, I see that good old William "Cold Cash" Jefferson, (D - FreezerFullOfCashDuringKatrina) won the first round. He had 12 opponents splintering the field, and got 30% of the vote. He goes into a runoff, which as incumbant he's positioned to win. Now, what was that about "the corruption issue", again?

Ah yes, we pass another election cycle, the vote count is in, and so we get to engage in another exciting episode of...Sore Loser Syndrome, co-hosted by Chicken Little!

Regarding buyer's remorse: Well, sure. Play politics, get buyer's remorse. File that one with "don't eat, get hungry" and other like pearls of common wisdom.

Meanwhile, regardless of whether you approve of his performance, was anyone actually surprised to see Rumsfield get the boot? He's been a lightning rod for criticism, and Bush plays politics. While dealing with a Republican majority, it wasn't a problem; but now it will be. Getting Rumsfiled out, for better or worse, is a pre-requisite to having a meaningful dialogue with the 110th Congress come January.

Let's just hope Pelosi is a bright enough bulb to realize that this wasn't a victory for the ultra-left seague to which she has traditionally tailored her voice. Let's hope. Although personally, I'm expecting something more along the line of Judge Judy with a bad hangover.

Brian Despain wrote:
Ellipsis - Why don't we wait to see what they do first? I mean really. No need to actually know what happens right? I mean you are getting worked up over thngs they haven't done.

These are all good points. However, after watching the Democrat Party at work for over 25 years, I think it is safe to predict some tax increases. Bush isn't going to veto them, not with the threat of impeachement hanging over his head. Yes, I know Speaker To Be Pelosi said today that was off the table, but John Conyers may have different ideas, and in any event Speaker To Be Pelosi has the perogative of changing her mind...

Thanks for posting the cap gains information. You do understand that all of these things can be changed in a rather short time, and have been more than once in the last, oh, 40 years?

The only thing the American people got in this election is two years of investigations to use as fodder to elect a Democratic President.

Not the only thing. But I'd rather have investigations over no investigations. The downside of not having investigations is unaccountable politicians and corruption.

You've won. The blame game won't work anymore. Its time to actually do something.

I agree. I was just asking people with buyer's remorse. How bad would the Republicans have to get before you stop feeling any?

I just thought of a bright spot in this. The DU/Kos/Huffington tinfoil hat brigade will at long last shut up, already about "Diebold" and "rigged elections". If there's any election that the Republicans would surely have rigged, if it was within their power, it's this one. Now Robert F. Kennedy Junior, just for a start, can find another hobbyhorse to ride; nothing too hard, like a real job, mind you...but something else.

A windfall profits tax on petro, especially natural gas if this winter is even the least bit colder than usual (impossible, of course, with "global warming" I know...) would surely fly.

Hmm...but the last reports I heard, held that natural gas prices would drop this winter.

anony-mouse squeaked:
Let's just hope Pelosi is a bright enough bulb to realize that this wasn't a victory for the ultra-left seague to which she has traditionally tailored her voice. Let's hope. Although personally, I'm expecting something more along the line of Judge Judy with a bad hangover.

Bit of an optimist, are we? I don't see how Speaker To Be Pelosi will be able to restrain herself, frankly, given that some chunk of her Congressional district is certifiable flying-monkey-moonbat.

Not the only thing. But I'd rather have investigations over no investigations. The downside of not having investigations is unaccountable politicians and corruption.

Go for it. Just keep in mind two things:

1. These investigations have a habit of turning up skeletons in shades of both red and blue.

2. The Dems were given a majority, but not exactly a mandate. How they use that majority in the next two years will speak heavily for or against them in 2008.

Bit of an optimist, are we? I don't see how Speaker To Be Pelosi will be able to restrain herself, frankly, given that some chunk of her Congressional district is certifiable flying-monkey-moonbat.

Just checked, and regardless of the merits of that, the sky is still nailed firmly in place.

I wrote:
A windfall profits tax on petro, especially natural gas if this winter is even the least bit colder than usual (impossible, of course, with "global warming" I know...) would surely fly.

anony-mouse:
Hmm...but the last reports I heard, held that natural gas prices would drop this winter.

I read that, too, but am skeptical of it for various reasons. The rig count is up, way up, and yet most activity seems to either be on the edge of existing fields, or in coal-seam i.e. "nontraditional" gas. Coal-seam stuff is low pressure, requires a lot of shallow wells and was derided as not worth the effort to get it just 15 or so years ago. That we are actively going after coal-seam is disquieting to me. Gas wells are funny things, they don't give the same kinds of warnings that oil wells do, and they sure as heck don't respond to secondary/tertiary recovery the way oil does. One of the things the "Peak Oil Sky Is Falling" people get right is the "cliff" nature of gas wells when they are playing out.

October is already cooler than average, according to the Nat. Weather Service, if the trend continues, the 52% of US homes that heat with gas will burning more of the stuff, and those that heat with electricity will be demanding more from utilities, more than a few of which generate with natural gas fired powerplants.

So the price of natural gas could go up, even though the price of heating oil might go down. Of course, heating oil is much more important than gas, because reporters who live in the Greater New York Area are more likely to heat with oil...

Not the only thing. But I'd rather have investigations over no investigations. The downside of not having investigations is unaccountable politicians and corruption.

Anony-mouse wrote:

Go for it. Just keep in mind two things:

1. These investigations have a habit of turning up skeletons in shades of both red and blue.

Of course, not all skeltons are equal. For example, it would have been fully appropriate for the 9/11 commission to throw open the door to Jamie Gorelick's closet, with cameras rolling & lights hot, right? Did that happen?

2. The Dems were given a majority, but not exactly a mandate.

No, no, no! The Will Of The People Has Spoken! Congress now, White House in 2008.

How they use that majority in the next two years will speak heavily for or against them in 2008.

If they import 20 to 40 million new party-line voters between now and then, what effect do you think that will have?

I wrote:
"Bit of an optimist, are we? I don't see how Speaker To Be Pelosi will be able to restrain herself, frankly, given that some chunk of her Congressional district is certifiable flying-monkey-moonbat."

anony-mouse replied
Just checked, and regardless of the merits of that, the sky is still nailed firmly in place.

Didn't say otherwise, but rather was trying to point out the futility of expecting sanity from this San Francisco Democrat. Canniness, sure, cunning, absolutely, cleverness, you bet. Sanity? Nah, I don't think so. Might as well expect Mike Moore to lose weight and start making honest, interesting, movies...

These elections virtually guarantee a Democratic win in the presidential election in 08. The inevitable recession will make Bush so unpopular that Republicans will be looking back on these results as the good old days.

The Dems were given a majority, but not exactly a mandate.

Actually Dems received 57% of the vote for the Senate (32 million out of 56). Thats quite a bit more support than electoral realities imply, and certainly greater than the amount Bush thought he had back in 04.

How does Jane's Law apply to this election?

Will the Democrats remain smug and arrogant, will they remain insane, or will they do both?

Maybe we'll get some smug insanity.

I would caution against overreaction. People have a natural tendency to think that whatever happened yesterday will happen today and forevermore. Remember when the Repubs swept in in 1994 and rolled up their sleeves, thinking they were going to put through a pile of nice new small-government legislation? Then when the polls showed people didn't really want that (they just wanted to feel like they wanted it), most of it dried up. The Dems won because people were tired of the Republicans doing crap they didn't like, like going to war and spending too much money. So the Democrats will stick their necks out soon, and they'll almost immediately find that people don't want to buy what they're selling either. In this case, it'll happen faster than in '94, because it's probable that what the Dems are offering now isn't even what people thought they wanted in the first place. They just didn't want the GOP anymore.

Eamon,

These elections virtually guarantee a Democratic win in the presidential election in 08. The inevitable recession will make Bush so unpopular that Republicans will be looking back on these results as the good old days.

Maybe you can provide some evidence of the "inevitable" recession? Something in the form of historical data where recessions are positively correlated with Democrat controlled congress after a 6-12 month lag? I'm calling BS on this but I'd love to be proven wrong.

Here is my attempt - not quite what I was looking for but ...
link

Actually Dems received 57% of the vote for the Senate (32 million out of 56). Thats quite a bit more support than electoral realities imply, and certainly greater than the amount Bush thought he had back in 04.

Yes, but with only 33 out of 50 states participating, and when 55% of the incumbents were Dems.

What were the party shares of the House vote?

Jane,

Corner says that Pelosi said that the war in Iraq is "not a war to be won but a situation to be solved."

She must not believe in the Patton Theory of Americans at war.

You're famous. In glossy print media no less. Much deserved! Check out the latest edition of Foreign Policy, page 95. Congrats!

AT writes:
Corner says that Pelosi said that the war in Iraq is "not a war to be won but a situation to be solved."

That is consistent with her worldview.

She must not believe in the Patton Theory of Americans at war.

Pelosi doesn't believe we are at war.

MS asks for evidence we are about to enter a recession.

Housing is falling in the tank. Yes, I know Cramer called a bottom, but the Pulte guy he talked to, who actually builds houses for money, refused to join him. When housing gets really sick and builders start going broke, all the subcontractors they hire won't have work, all the laborers won't have work, and they'll stop buying stuff. The consumer is 70% of the economy. Housing is arguably already in a recession.

WalMart just turned in same store sales numbers that showed a 0.5% increase, the worst show for them since late 2000. What happened in 2001, anyone remember? I'm seeing sales with price cuts usually reserved for post-Thanksgiving or even post-Christmas sales, in early November...

Ford lost a dumptruck full of money and is closing plants. GM is not in good shape. The auto industry is arguably already in a recession.

The Philly report on manufacturing was bad. Manufacturing is arguably in, or sliding into, a recession.

That leaves consumer spending, which as noted above is nothing to cheer about.

So there's your recession, starting in Q1 of 2007. It has nothing to with this election at all, please note...

Pelosi doesn't believe we are at war.

Maybe she heard someone say "mission accomplished"

Jane points to a Slate article by Tim Noah entitled "It's Time To Socialize Medicine". Here's an excerpt: The signs of breakdown are everywhere, from the emergency room overflowing with uninsured people...

One way to reduce the number of uninsured by at least 10 million is simple: enforce the existing laws on illegal immigration, thereby encouraging other illegal aliens to go home. This would have the effect of making it possible for emergency rooms from Brownsville to San Diego to stay open without extra help, as a bonus. Of course Noah cannot propose that, because no good liberal would ever dream of sending that many future party-line Democrats out of the country.

As an aside, I did not know that Tim Noah's wife died of cancer. That's terrible, just terrible, and I feel very sorry for him.

ellipsis,

The post I was responding to made it seem that the Dem victory would somehow cause or contribute to the recession. Which is BS. Whether or not we are actually heading into a recession I dont know. You are probably correct that we are.

I wrote:
Pelosi doesn't believe we are at war.

MS replied:
Maybe she heard someone say "mission accomplished"

Maybe she gets up and leaves after one inning of baseball, figuring the game is over, too.

Jane points to a Slate article by Tim Noah entitled "It's Time To Socialize Medicine".

Tim Noah would have written that article had the Republicans won; he'd just write a different political analysis of why it would be good for whomever to do so.

He'd have written that article if there had been a split decision, or if Bush had had a heart attack and Cheney became President. He'll write the same article in November 2008, no matter what the result.

MS wrote:
ellipsis,

The post I was responding to made it seem that the Dem victory would somehow cause or contribute to the recession. Which is BS. Whether or not we are actually heading into a recession I dont know. You are probably correct that we are.

Oh. Ok. I read the posting you responded to as "the recession is baked in the cake no matter who gets elected", but re-reading it, I see how it could look to you as "Democrats get elected, recession follows".

Well ellipsis I know that cap gains tax can be changed at the drop of a hat - But my feeling is that it shouldn't be a LOWER percentage than payroll taxes - If you want to cut payroll match I would be all for that. As far as the Slate story - one man has had a terrible experience at the hands of the healthcare system. It doesn't mean it will happen. Was he elected to some position or does he hold a position of leadership? No.

Ok, I'll bite: why should cap gains be the same as payroll (income) taxes? Do you view income taxation as a socially neutral revenue-gathering measure, alone, or do you expect there to be a "social justice" component as well?

"socially neutral revenue-gathering measure" of course what else could it be? Why shouldn't it be taxed at the same rate? Mind you I am pretty open here but seems to me it should be but I haven't extensively studied the macroeconomic effects.

Having cap gains taxes lower than payroll is regressive taxation. I know this will produce a bunch of "so whats" from most people here I'm not even going to try to get into this.

Brian Depain wrote:

"socially neutral revenue-gathering measure" of course what else could it be?

It's pretty axiomatic that if you want less of something, whether it's gasoline consumption or savings, taxing it is a good way to accomplish that aim. There's lots of "if's", "maybe's", and unintended consequences, but that's the gist of it. Raising taxes on machineguns, for example, is supposed to make it more expensive for them to own, and thus make ordinary people less inclined to buy one.

So a tax can be a revenue gathering measure and have some social policy; import duties, for example, "sin" taxes, for another.

Why shouldn't it be taxed at the same rate?

Ah, ah, ah, I asked you first. Why should cap gains be taxed at the same rate as income?

Mind you I am pretty open here but seems to me it should be but I haven't extensively studied the macroeconomic effects.

Well, we're on even ground, because I haven't studied the macro effects, either. I'm just asking, why should cap gains be taxed at the same rate as ordinary income?

MS wrote:

Having cap gains taxes lower than payroll is regressive taxation. I know this will produce a bunch of "so whats" from most people here I'm not even going to try to get into this.

Oh, yeah? Well try this on: any tax on cap gains, or savings account interest for that matter at all is double taxation. Want to get into that instead?

Ellipsis, all income is taxed multiple times... I make $10, I pay $3 tax. I pay the remaining $7 to my barber, he pays $2 tax, etc. Is that $2 'double tax'?

Hm....nah, I don't think so, since the tax is on the transfer of money from you to him for services rendered. Are you saying that there should be an income tax on any loan repayment?

People are too serious. Why not read Noah's article. It's good stuff, for example (my caps):

"Krugman and Wells note that when Taiwan switched to a single-payer system in 1995, overall health-care costs WENT DOWN:

[T]he percentage of the population with health insurance soared from 57 percent to 97 percent, yet health care costs actually GREW MORE SLOWLY..."

He is so smart. I think we should all do whatever he says.

Ellipsis,

I dont consider it double taxation. You earn interest on your capital, or any appreciation of assets - money you never had before and never had to lift a finger to get (aside, obviously, from your original principal). Once you have accumulated a sufficient amount you never have to work another day in your life. I dont see it as unfair to have this income taxed.

If by double taxation you mean the taxes that corporations pay out of their income before dividends then thats a different matter (which I really dont want to get into).

MS wrote:
I dont consider it double taxation. You earn interest on your capital, or any appreciation of assets - money you never had before and never had to lift a finger to get (aside, obviously, from your original principal).

What if the loans are not paid back to me? That is to say, is there some risk involved, here? Did I not do some work to determine who should borrow my money and who should not?

Once you have accumulated a sufficient amount you never have to work another day in your life.

Unless, of course, it all evaporates. One ancestor of mine lost a lot of money, most of his savings in fact, in a Panic about 100 years ago. Should he have applied to the government for a refund of his income taxes? (this is a rhetorical question...)

I dont see it as unfair to have this income taxed.

If by double taxation you mean the taxes that corporations pay out of their income before dividends then thats a different matter (which I really dont want to get into).

Aw, why not? What else are you doing with your time right now, reading Noah's dopey article over at Slate?

Joe, Noah surely has sufficient ambiguity to be a good oracle, but are you sure he's up to the job of philosopher-god-king?

However, after watching the Democrat Party at work for over 25 years...

And in all that time you've never learned the name of the party you've been observing. Astonishing.

I wrote:
However, after watching the Democrat Party at work for over 25 years...

purple chastised me:
And in all that time you've never learned the name of the party you've been observing. Astonishing.

On the contrary, I've learned several names for that party...

Ellipsis,

This is getting tiring.
1. As I'm sure you know, you saving money is in fact guaranteed by the Federal government (that commie FDR's idea).

2. Yes investing involves risk (which is not difficult to understand and diversify). So does everything else, including having a job. If I get laid off, or my company goes under, or my industry is outsourced overseas, or I become physically unable to work, do I get a refund on all the taxes I've paid working there? That is a rhetorical question. You do get some compensation but I bet that if libertarians had their way you wouldn't even get that much. On average though, the more money you have, the easier it is to make more money. It is like a video game where reaching new levels is slow at first until you get better avatars that allow you to advance faster which in turn allows you to get even better, more powerful avatars and so on. Kinda boring to play if you ask me. But a game you can quit, life - not really.

3. I don't know enough about corporate taxation to discuss it. I do know that companies are often pretty good at avoiding paying them, though. Also the fact that many private individuals and small business owners find it profitable to incorporate tells me that additional taxes are not such a huge burden. Considering the perks you get (limited liability etc), many people find it worth it.

Jane,

With all due respect:

What? WHAT?!? You just figured out that Democrats want to nationalize the pharmaceutical and medical industries? And you just figured this out one day after Election Day?

Whatever your real name is, it's not "Nostradamus".

Sheesh!

"Why shouldn't it be taxed at the same rate?"

Nothing but Accumulated Capital engenders 'payrolls'. Want more jobs/higher standards of living? Be friendly to Capital, in All of its forms.

Think the "Gov't" has what it takes to provide perpetual 'payrolls'? Think again, the "Gov't", only has what it does because has what it takes to take what you have. The "Gov't" may give you an "Iron Rice Bowl", but the Market, allowed to put in its 'two-cents', is smart enough to add Nickle and breathe some air into the process.

Single taxation:
Your boss pays you money for your services, on which you pay tax. You pay your barber money for his services, on which he pays tax. You've each paid tax on your income.

Double taxation:
You own (a piece of) a business which makes money, on which it pays tax. You transfer some of your money from your business's bank account to your personal bank account ... on which you pay tax? Again?

October is already cooler than average, according to the Nat. Weather Service, if the trend continues, the 52% of US homes that heat with gas will burning more of the stuff, and those that heat with electricity will be demanding more from utilities, more than a few of which generate with natural gas fired powerplants.

Not so sure about that. Generally, natural gas powerplants are turbine generators, used for peaking generation because they can be brought on and off line rather quickly. Baseload is usually coal-fired and, after 20 years of stagnation, the US is finally starting to increase its generation infrastructure at a heavy pace.

The Democrats will be coming for our guns tomorrow, and they’ll leave the bills for the new entitlements for illegal immigrants. They’ll also collect the red meat from our freezers, confiscate SUVs, and take down info so they can start assigning us our new same-sex domestic partners.

The tofu deliveries start Monday, along with mandatory recycling and abortions, and the Bible pickups will commence the following week. Your new copies of The Blind Watchmaker will arrive by union courier in December, and Christmas is canceled until further notice.

The Battered Women’s Cultural Revision Commission is expected to cancel the NFL season before the Super Bowl and to instruct us on cooperative quilting. Net Neutrality begins in January, with all Internet searches directed to Google, and YouTube content will be managed by Daily Kos diarists. Glenn Reynolds will no longer be the Head Blogger In Charge after Jeralyn Merritt takes over, and George Lakoff and Geoff Nunberg will re-write all political speeches.

This is progress, comrades, so embrace it.

Bush has to stop the bleeding or else the Democrats will also win the presidency in 2008.

After two years of impeachment hearings, cutting and running from Iraq, tax hikes, and Hillary atop the Dems ticket, people will be begging to elect another GOP president.

Mark E Hoffer:

"Why shouldn't it be taxed at the same rate?"

Nothing but Accumulated Capital engenders 'payrolls'. Want more jobs/higher standards of living? Be friendly to Capital, in All of its forms.

Think the "Gov't" has what it takes to provide perpetual 'payrolls'? Think again, the "Gov't", only has what it does because has what it takes to take what you have. The "Gov't" may give you an "Iron Rice Bowl", but the Market, allowed to put in its 'two-cents', is smart enough to add Nickle and breathe some air into the process.

It always cracks me "Up" when someone 'stupid' writes a Comment like "this one", with aribitary capital "Letters" and random 'quotation' "Marks", both Singular and plural.

"Thanks" for making 'my' Day.

Ellipsis wrote:

"I just thought of a bright spot in this. The DU/Kos/Huffington tinfoil hat brigade will at long last shut up, already about "Diebold" and "rigged elections". If there's any election that the Republicans would surely have rigged, if it was within their power, it's this one."

Sorry, no. I already ran across the soon-to-be official line on this: "The people hated Bush so much that the victory should have been even bigger, but even with the GOP cheating, they *still* lost".

Never underestimate a conspirizoid...

RGT

I thought it interesting that Noah quoted Krugman's complaint:

"[I]magine an insurer who offered policies to anyone, with the annual premium set to cover the average person's health care expenses, plus the administrative costs of running the insurance company. Who would sign up?"

IIRC, this is exactly what New York State did in the early 90's - it required insurance companies to offer the same insurance to all individuals at the same price regardless of risk. The result was pretty predictable - everyone paid a whole lot more for insurance. Young, healthy, non-smoking males and females dropped coverage as one would expect. Many people were priced out of the market and dropped coverage. All during a recession.

I also thought it amusing that Noah complained about privacy restrictions on medical records and the absurd result of such rules. I seem to recall it is government regulation, not insurer restrictions (HIPAA), that cause that.

Noah also relates that "just about every doctor" he has spoken to thinks "it's a given that government will have to take over health care". Funny locution. He doesn't mention how many of those doctors WANT government to take over health care.

FWIW, to me universal health insurance would be more like the IRS than the DMV: The coercive power of government interfering in the private lives and decisions of its citizens.

the fact that many private individuals and small business owners find it profitable to incorporate tells me that additional taxes are not such a huge burden.

Look a little closer and you'll notice that most of those small businesses are now LLC instead of Inc., meaning they can get "flow-through" taxation and only pay once.

They only incorporate when they get big enought to start selling securities.

IIRC, this is exactly what New York State did in the early 90's - it required insurance companies to offer the same insurance to all individuals at the same price regardless of risk. The result was pretty predictable - everyone paid a whole lot more for insurance. Young, healthy, non-smoking males and females dropped coverage as one would expect. Many people were priced out of the market and dropped coverage. All during a recession.

Exactly so. New York insurers must offer coverage to everyone and at the same price. Consequently, for me, a healthy young adult, the rate would be over $600 a month for an HMO from the one or two companies that still offer individual insurance in this state. If I didn't have insurance from my employer, I could get individual insurance under the Healthy NY program for about $200 a month, but only if my income were below $25,000. The situation is somewhat different but apparently even worse in New Jersey.

Short-term insurance is illegal in NY. People without insurance from work and who aren't poor are basically SOL here.

In California I could start at $42 a month for catastrophic coverage.

re: "No, no, no! The Will Of The People Has Spoken!"

I was on a call yesterday with a colleague who I normally think of as level-headed in most respects, but I'd never heard her political leanings.

We were discussing travel, and out of the blue she said something about foreign travel being much, much easier now that the GOP got whupped in this election.

I asked her why, and she said (paraphrasing, but not by much):

"Now the rest of the world knows that 'the people' don't support that asshole."

Sigh.

Mark - Did I mention the "Govt" in my posts? No I didn't but keep punching those straw men. As far as capital creating jobs - that's slightly true. Jobs are created by entreprenuers and small businessmen in this country - something I know about as I have started 5 companies and sold two of them to larger publically traded companies.

Have I paid cap gains on my earnings when I have sold various companies? - sure have. No offense but people who inherit/accumulate wealth should be paying at the same rate as those who work for a living. That's really what we are talking about. Paris Hilton should be taxed at the same rate as your plumber.

I have yet to hear how taxing someone at the same rate is a problem other than the silly point "taxing people on cap gains means they aren't going to accumulate capital" which of course is nonsense. Moving back to the rates in the Clinton years COMBINED with a pay as you go budget isn't going to be the end of the world. In fact considering we currently have 140,000 troops in Iraq and another 20,000 in Afghanistan it's probably necessary.

As far owning a business and pulling money out - of course that's a taxable event. Your business (assuming you have set it up properly) is seperate legal entity. It has seperate legal rights and you aren't responsible for it's debts (at least if you have set it up properly).

As far a Noah goes - his wife died of liver cancer. No doubt he feels that the healthcare system is partially responsible. I would like a a little better value out of the healthcare system. My premimiums are $412/month for myself and my wife with a $4,000 deductible which gets us $8,000,000 in lifetime coverage. But really I cannot complain too much - at most I think that price is $50-$75 per month too high which isn't too much.

That's an interesting point about the difference between taxing capital gains and taxing income. It is true that taxing capital gains will result in less available capital. But the same is true of taxing income. The former is simply a bit more direct and visible than the latter. Neither is more or less likely to be invested.

I wrote:
"October is already cooler than average, according to the Nat. Weather Service, if the trend continues, the 52% of US homes that heat with gas will burning more of the stuff, and those that heat with electricity will be demanding more from utilities, more than a few of which generate with natural gas fired powerplants."

Anony-mouse replied:
Not so sure about that. Generally, natural gas powerplants are turbine generators, used for peaking generation because they can be brought on and off line rather quickly. Baseload is usually coal-fired and, after 20 years of stagnation, the US is finally starting to increase its generation infrastructure at a heavy pace.

That may be true in your region, but some places get their baseload from natural gas fired plants with a dollop of nuke on top. However, upon reflection, the spike in natgas price last summer due to hot weather was more likely driven by peaking plants than baseload for the midwest & northeast. So that part of the natural gas price equation is not as big a factor as I guesstimated. However I'm still left with over 50% of homes heating with the stuff; if prices jump up, it would be a dandy headline grabber to propose a nice "windfall profits tax" on natgas producers.

As an aside, one of the things France did right was to decide on a standard light water reactor, copied from Westinghouse IIRC, to generate baseload. One design, so operators can be trained in one place and moved around the system. If more baseload is needed, build another identical unit right next to existing ones. They run most of their railroad net on electricity, which would only work in selected parts of the US at best, but of the European countries they probably positioned the best for the future in terms of energy.

Is your hate for taxes and minimum wage so great you are willing to turn a blind eye to corruption

Eight words: Alcee Hastings, William Jefferson, Article One, Section Five.

Tolbert wrote yesterday:
The silver lining. The Democrats will now be emboldened to run Hillary Clinton for President in 08.

Since she's been pulling a solid 40% in every poll of Democrats for a couple of years now, and the Clinton machine still has a lot of control over the national party, it seems to me the nomination is hers to lose.

Surely, even in their most frothing-at-the-mouth moments, nobody expects that ticket to win.

A number of smart people told me a few years ago that New Yorkers were much too intelligent and sophisticated to vote for a carpetbagger whose sole claims to fame were a failed attempt to nationalize health care & a philandering husband who was President. Since Senator Clinton just got re-elected, it seems those smart people were wrong. Given blatant, obvious support by the press corps (check), a huge pile of money to spend on the campaign (check), an extensive party machine ready to do anything to get the White House back (check), no substantial Republican opponent (at this time, check) I don't see another President Clinton as impossible, not in the least.

ellipses
As for your ancestor who lost all that money in the crash of 1906 (thought it was 1907?),
in fact, you can get income tax refunds or deductions from your capital gains against your capital losses.
Your ancestor didn't get that income tax deduction or refund because 100 years ago there wasn't any income tax to get a refund of or deduction for.
Oh, the capital gain tax rate averages 9% because so much of it goes through inheiritance and the stepped up basis deduction. That's 9% of all the capital gains made, of course, not 9% of all the people with capital gains. Some people have more money than others, and then some people have so much money that they wind up paying estate taxes. The sweet spot is between one and four million dollars.

Taxes on capital gains also tax inflation.

markm,

So does a tax on income. If I get a cost of living raise, my taxes go up, but my standard of living has not.

wkwillis wrote:
ellipses
As for your ancestor who lost all that money in the crash of 1906 (thought it was 1907?),

Correct, it was the Panic of '07.

in fact, you can get income tax refunds or deductions from your capital gains against your capital losses.

True. I'm sure some people are still carrying cap losses forward from 2001. Doesn't help below a certain income level, though.

Your ancestor didn't get that income tax deduction or refund because 100 years ago there wasn't any income tax to get a refund of or deduction for.

Yes. That was a rhetorical question.

Oh, the capital gain tax rate averages 9% because so much of it goes through inheiritance and the stepped up basis deduction. That's 9% of all the capital gains made, of course, not 9% of all the people with capital gains. Some people have more money than others, and then some people have so much money that they wind up paying estate taxes. The sweet spot is between one and four million dollars.

All very interesting, but doesn't explain why cap gains tax is a good idea.

Hey gang and Jane if she ever bothers to scroll down this far, I just thought of another great idea we may well see in the next year: Carbon Tax. It's all the rage on the left in the UK, it will punish dem devil-wagon SUV's, it "makes a statement about global warming", it's regressive so we'll have to tinker further with the Earned Income Tax Credit (and slip a few more tax code modifications in as part of the process), it makes the Dept. of Energy look like it's doing something, and will provide lots of posturing & photo ops. Did I miss anything?

Why is a cap gains tax a good idea? Good question. But I'm thanking that it is no better or worse an idea than any other kind of tax. They all create perverse incentives of one kind or another. The bottom line is still "getting the most amount of feathers with the least amount of squawking".

Rangel had some thoughts this am as to his plans:

“It’s not just committees — our influence within the House Democratic caucus will grow enormously,” Mr. Rangel said in an interview.
To that end, he sketched out an expansive federal agenda: Teaming up with Mayor Michael R. Bloomberg on gun control, passing new tax incentives for urban job programs, and redirecting federal money to New York in return for the outsize tax collections that the federal government makes here.

“Mississippi gets more than their fair share back in federal money, but who the hell wants to live in Mississippi?” Mr. Rangel said.

Going to be interesting times.

No one thinks taxes are "good" ellipsis - As far as I am concerned, people should be taxed at the same rates. Why should someone who has enough wealth not to actually work be taxed at lower rate than someone who has to work for a living? Both benefit from the society - both need to pay for the common defense. Why should having enough wealth mean you pay less as a percentage? It seems to me that you should be taxed at the same rate. You keep making the argument I have "prove that caps gains taxes should be equal." It seems to me that you are the one with the case to prove. Why should one person be allowed to contribute less because his method of revenue generation is a multi generation trust?

redirecting federal money to New York in return for the outsize tax collections that the federal government makes here

I never understood that argument. The government can redistribute money between income brackets, generations, household types, sexes, races, neighborhoods, cities, industries, etc., but not between states?

MikeinAppalachia - Well the amount of money that flows from coastal regions such as California to rural Red areas is amazing. I had no idea how much federal money (I call it welfare) these states recieved until I moved to New Mexico, then I was astounded. You can get specific federal grants designed to encourage investment in the area. A friend of mine got a $80,000 USDA grant for starting a microbrewery in town. Now I know where my tax dollars went.

Brian Despain wrote:
No one thinks taxes are "good" ellipsis

No one? Not even the people with "Taxes Are The Price We Pay For Civilization" bumper stickers on their Prius's?

- As far as I am concerned, people should be taxed at the same rates. Why should someone who has enough wealth not to actually work be taxed at lower rate than someone who has to work for a living? Both benefit from the society - both need to pay for the common defense. Why should having enough wealth mean you pay less as a percentage? It seems to me that you should be taxed at the same rate.

Fine by me, the flat tax is a heck of a lot easier to administer, with lower overhead, than what we have now. Which is why it doesn't get passed into law. But waaaay up the thread, I suggested that the New Brooms in the Congress just might want to jack up the cap gains tax, in order to make the rich pay their fair share, etc. as part of a broader agenda.

You keep making the argument I have "prove that caps gains taxes should be equal." It seems to me that you are the one with the case to prove.

I don't recall making an argument on this topic, merely asking questions.

Why should one person be allowed to contribute less because his method of revenue generation is a multi generation trust?

Hey, drop by any of the high end rehab resorts & ask a Kennedy, not me.

> the cap gains tax, in order to make the rich pay their fair share, etc. as part of a broader agenda.

What is their "fair share"? Right now, they pay for almost everything but social security and medicare and even there they subsidize the poor.

What fraction of govt expenditures should be paid for by the top 1%, 5%, 10%, 20%?

A number of smart people told me a few years ago that New Yorkers were much too intelligent and sophisticated to vote for a carpetbagger whose sole claims to fame were a failed attempt to nationalize health care & a philandering husband who was President. Since Senator Clinton just got re-elected, it seems those smart people were wrong.

I'm not sure who those "smart people" were, but the pundits (and myself) were almost totally unsurprised that a high-profile Democrat, married to a then immensely popular Democratic President, would win in one of the bluest states in America. There's a reason Clinton picked New York to do her carpetbagging in -- it was the safest bet for election.

Well the amount of money that flows from coastal regions such as California to rural Red areas is amazing. I had no idea how much federal money (I call it welfare) these states recieved until I moved to New Mexico, then I was astounded.

It is worth noting that while the flow of money IS from "blue states" to "red states", it is still primarily from "red voters" to a mix of red and blue voters.

Remember, the upper income quintile pays almost all of the income tax -- and even in California, that quintile is strongly Republican.

Brian Despain, did you have to move all the way to Mexico(*) to find out that the US federal government hands out grants like a drunken sailor? You don't even want to start asking around Sandia Labs about the 8(a) setasides with one Certified Minority behind a desk while half a dozen gringos do the actual work in a back room.

(*)Either you get this little joke or you don't, I won't explain it.

Dan replied to me:

I'm not sure who those "smart people" were, but the pundits (and myself) were almost totally unsurprised that a high-profile Democrat, married to a then immensely popular Democratic President, would win in one of the bluest states in America. There's a reason Clinton picked New York to do her carpetbagging in -- it was the safest bet for election.

Hey, they told me they were smart, and they were convinced that only rubes, hicks and socialites would be impressed by Hillary! and her campaign. What the heck do I know, I live so far West of the Hudson I can't even see it...

"I just thought of a bright spot in this. The DU/Kos/Huffington tinfoil hat brigade will at long last shut up, already about "Diebold" and "rigged elections". If there's any election that the Republicans would surely have rigged, if it was within their power, it's this one."

Given how the Republicans seem to have lost just about every *really* close race in this election, I'm amazed that we haven't started hearing about Democrat hackers throwing the election. It's got to be really painful to have lost so much by so little. Maybe Diebold is *pretending* to be Republican-leaning, but is really part of the Democrat conspiracy :-)

"What is their "fair share"? Right now, they pay for almost everything but social security and medicare and even there they subsidize the poor."

But they pay less as percentage of income than people whose primary meaning of generation of income. If you have a reasonable sized investment portfolio you can typically manage your cap gains exposure to any where from 8 - 18%. So in other words the question is "Should a person because of the virtue of their wealth pay less as a percentage of income than those who work?"

Furthermore it's pretty apparent that the tax cuts from the administration came at the expense of people who pay payroll taxes. Looking at the percentage of the government paid for by th upper 1% etc isn't a meaningful exercise. You need to look at the most meaningful figure - tax burden/income. If the percentage is higher for those who rely on payroll, how caqn you argue it's fair. Ellipsis' flat tax proposal seems a better solution. Although the shot at the Kennedys seems uncalled for and rather uncivil. I am sure we can find examples on both sides of the aisle of drug addicts (Rush Limbaugh comes to mind).

"Remember, the upper income quintile pays almost all of the income tax -- and even in California, that quintile is strongly Republican."

I just don't think that's accurate or at the very least you are going to need more backup than your simple bald assertion. Any surveys/demographic would be helpful or maybe just knowing what numbers you have in mind (60/40 Republican/Democrat) might work.

"Brian Despain, did you have to move all the way to Mexico(*) to find out that the US federal government hands out grants like a drunken sailor? You don't even want to start asking around Sandia Labs about the 8(a) setasides with one Certified Minority behind a desk while half a dozen gringos do the actual work in a back room."

Well I guess so. I am so naive sometimes it's amazing. One of my companies I started was ecommerce professional services - we stayed away from government contracts because they seemed like a real pain. My friend showed me his application that netted him the $80,000. I was aghast. I then realized I missed a lot of money from the government.

I drove to Indiana to visit my parents about 8 months ago. While there I got pulled over and the local law enforcement asked to see my passpoard and visa. I had to explain that we were indeed part of the US.

You need to look at the most meaningful figure - tax burden/income. If the percentage is higher for those who rely on payroll, how caqn you argue it's fair.

I might try; however, I don't need to, since your predicate isn't true.

As for the idea of taxing capital gains as ordinary income, it's problematical under a progressive tax system because of its unusual potential for distorting economic behavior: capital gains are taxed when they're realized, and people usually have a lot of discretion over when that happens. To take the most salient example, workers approaching retirement would be encouraged to stay fully invested in stocks (a thing most of them shouldn't be doing) in order to realize their gains once they've retired and moved into a lower bracket.

If we had a flat-marginal-rate income tax, I'd be all for taxing capital gains like other income-- provided they're indexed for inflation.

Quote by Brian Despain:

"Remember, the upper income quintile pays almost all of the income tax -- and even in California, that quintile is strongly Republican."

I just don't think that's accurate or at the very least you are going to need more backup than your simple bald assertion. Any surveys/demographic would be helpful or maybe just knowing what numbers you have in mind (60/40 Republican/Democrat) might work.

Here's a link you should research:
http://www.ntu.org/main/page.php?PageID=6

Time taken to research: 1 minute.

Thanx Jeff - This tells me absolutely nothing. The big surprise - people who make more money pay more tax! The graphs tell us nothing about those people's political affiliations. Furthermore the debate here is the percentage of tax to income. Sure under the current structure the higher income brackets pay a large percentage

I was looking for your support on you the upper quintile being Republican.

Wow Paul - you linked to enormous page at the CBO and said with quite a flourish "your predicate isn't true." Furthermore the report supports my argument - Did you read all of it? (maybe you could point to the part that disproves my predicate?) From the report on the report on capital gains

"After May 6, 2003, 5 percent for taxpayers in the 15 percent bracket or below--and 0 in 2008; 15 percent for other taxpayers (10 percent; 20 percent)"

Here's on the rate on dividends,
" 5 percent for taxpayers in the 15 percent bracket or below--and 0 in 2008; 15 percent for other taxpayers (Ordinary rates)"

So capital gains is taxed currently at every bracket but the 15 percent at 15%. So is your point that the rich bear greater tax liabilities? Please indicate what you are using in that report as it's long and I don't really feel like digging through it to try to figure out what you mean.

Incomplete sentence - "Sure under the current structure the higher income brackets pay a large percentage of the federal tax burden." The real question is the ratio of tax/income/cap gains.

Look if you just live by investments such as the sale of stocks or securities you are taxed at 15% under the current system. Looking at the total taxes paid and saying see the rich pay most of them is silly because you lack the context of understanding the tax burden relative to an individual's income.

From Table 2, first group ("Total Effective Federal Tax Rate"):

2006
Lowest Quintile 5.6
Second Quintile 12.1
Middle Quintile 15.7
Fourth Quintile 19.8
Highest Quintile 26.5

If tax burden/income isn't "the most meaningful figure" after all, feel free to ignore the data.

Maybe Diebold is *pretending* to be Republican-leaning, but is really part of the Democrat conspiracy

Think you could spread that meme around a little more? Then maybe a few more Republicans will warm up to the idea of a paper trail for elections.

"redirecting federal money to New York in return for the outsize tax collections that the federal government makes here"

If Rangel et al. think the federal government is sending too much money from rich states to poor states, they should be pushing to cut federal taxes (and spending) so states can raise their taxes. The way to keep New York's tax money inside New York is to send it to Albany, not Washington.

Cap gains taxes should be be lower than wage taxes because most of the "gains" are due to inflation. Using interest to illustrate the point, if you got 4% interest, had 3% inflation, and were in the 28% bracket, then you got a return of -0.12% after inflation and taxes. If you hold a stock for many years, most of your "gain" is inflationary.

Taxes on wages don't tax any kind of inflationary gain. Money loses purchasing power over time. Since no time elapses between between the payment of wages and the payment of wage taxes, there is no inflationary element to this transaction.

Well that graph is tax burden/income group which is isn't what I am looking for I am looking for the percentage a person pay of their income - not the fact that the upper two quintiles pay most of the tax burden - that's not surprising nor particularly meaningful. the question is how much of that taxpayer is paying a proportion of income. Furthermore that graph is an INCOME tax rate - if the majority of your money flows from cap gains or dividends you are taxed at 15%. Thanx for pointing out what you were using in that PDF - it's rather large. What I find amazing is that we are pretty close to flat tax right now. Any halfway decent tax avoidance strategy can on individual basis negate that and significantly drop your tax burden.

Shamus,

Just winging it here, but let's say the cost of living goes up by 3%. My boss gives me a cost of living raise of 3%. But the government takes 15% of the 3% leaving me with a .45% reduction in my real standard of living. I've just been taxed for inflation.

But I'm willing to admit that I could be missing something here. Perhaps you could point it out.

Maybe Diebold is *pretending* to be Republican-leaning, but is really part of the Democrat conspiracy

More likely, Diebold is part of the Illuminati, and we all know the Illuminati always wins elections...

Ryan wrote:
Think you could spread that meme around a little more? Then maybe a few more Republicans will warm up to the idea of a paper trail for elections.

I see quite a few Republicans that have no problem with a paper trail. What they don't seem to care for is a paper trail for "I'm not registered and don't have any ID and have to read my name off of a 3x5 card but let me vote anyway" voters. Dunno why, must be bigoted narrow-mindedness.

TO: Jane Galt
RE: Root Cause

Yeah. It's already happening...."Meet the 'new' boss. Same as the 'old' boss."

The problem is that the apparatchik in BOTH parties has become identical in their motivations and modius operandi.

As one friend of mine calls them...Demicans and Republicrats. All, same-same.

Third parties MIGHT work. But they take a LONG time to get their act together. And the current lot are not doing a very good job of even starting, in my honest opinion.

A better way would be for MORE people to get ACTIVELY involved in one of the existing parties and seize control.

Surely, Libertarians who are into Sex, Drugs and Rock & Roll could go for the Demicrats. While those who favor the Bill of Rights could go for the Republicans.

Betwixt the two, we COULD regain control of these parties from the current lot of money-grabbers who ARE in control. And therein would be a blessing in and of itself.

Regards,

Chuck(le)
[The American Republic will endure until Congress realizes it can bribe the people with their own money. -- Alexis de Tocqueville, Democracy in America, 1831]

P.S. Kill your television and GET INVOLVED in local politics. It (1) gets you off the couch and into the public, (2) improves the way local government works and (3) is MUCH more entertaining while it improves your vocabulary and mental capacities.

Tax debates are always lots of fun, but in my simplistic view they always boil down to a few really simple points

1) Government needs to raise $X Dollars to run

2) It should do so in a way that is minimially distortionary to the economy (some taxes like a Carbon tax may create a positive distortion)

3) It should do so in a way that minimially penalizes future GDP growth

There are infintely many strategies to go about doing this (Carbon Tax, Income Tax, Corporate Tax, Etc..), but I think if you honestly look at Capital Gains taxes they would not be part of the optimal solution.

Cap Gains taxes encourage people to consume rather than save, harming future growth (sure enterpeneurs drive growth, but you can't build businesses without money).

Cap Gains taxes also creates an entire industry of lawyers and accountants devoted to avoiding the tax rather than value-generating activities. I know this for a fact working at an investment company.

Cap Gains taxes also create an incentive to hold on to investments longer than may be optimal in order to qualify for long-term status and get a reduced rate.

Hang on a minute. Why should libertarians be upset about socializing medicine? Isn't this what Arnold Kling proposed? Oh, except you're not actually going to get the school choice he wanted in return.

Libertarianism is a wonderful governing philiosophy -- IN THEORY. In practice, government wins every time.

Brian Despain-I am somewhat aware that the amounts of federal spending in various states is not proportional to the federal tax collected there. I was just posting Rangle's remarks re Jane's opening as to "buyer's remorse". Re my "Name"-I'm all for it!

You get no sympathy from me.

Syria, Iran, Chavez, and the Palestinians, meanwhile, *are* all celebrating. Congratulations on making so many dictators & thugs happy. A century from now, your choice will be infamous.

> "What is their "fair share"? Right now, they pay for almost everything but social security and medicare and even there they subsidize the poor."

> But they pay less as percentage of income than people whose primary meaning of generation of income.

So?

>"Should a person because of the virtue of their wealth pay less as a percentage of income than those who work?"

Yup, they just got hit by the wealth fairy. No - they created something of lasting value, not ephemeral (like labor).

The other interesting thing about them is that they employ people - wage earners don't.

So, they pay everyone else's way AND they provide employment, and some folks don't think that that's enough.

I note that my "what fraction of the tax burden should they bear" question went unanswered. Instead, we got "more".

I'll ask a different question - what fraction of the tax burden should payroll earners pay? How about the poor and middle class? (Please define both.)

And, if you say that the rich should pay more because they exploit, I'm going to point out that the same is true of blue states, so transfer payments to red states should be increased.

". . . in practice government wins every time." Well, yeah, if I had the legal right to go around waving a gun at anyone I felt like intimidating and getting them to do whatever I wanted them to do--including giving me as much of their money as I wanted to take--my life would be pretty sweet, too.

One day into it and you've fallen off the turnip truck. No surprise.

All one had to do is look at who makes up the Democratic leadership and review their statements and policies to know what would happen if they got in a position of power.

Sorry but my sympathy factor is rather low.

Man; "schadenfreude" doesn't begin to describe the satisfaction that I'm going to wring out of watching your misery for the next two years.

We're talking justice.

You're going to richly deserve it.

A question for all the people attacking Jane for her alleged buyer's remorse:

Did she ever say she wanted Democrats to win because it would advance her beliefs?

No, she said she had personal reasons for wanting a Democratic senate, and that she voted for Hillary Clinton, which does not equate to supporting the full Democratic project given the lack of a viable choice. As far as I can tell, she never endorsed the Democrats, and kept up a healthy criticism of them throughout the campaign.

It's not her buyer's remorse. She knew what she was doing, and it's not the same thing others may have done.

Although the exit polls show that the votes of disaffected libertarians and conservatives had very little to do with the Democratic sweep. It was Democrats and moderates in competitive districts coming home or swinging to the Democrats, leavened with a healthy dose of scandal in competitive seats.

Conservatives, in fact, don't determine the outcome of every election by showing up or failing to show up. Y'all came out in big numbers this week. So did everyone else.

Syria, Iran, Chavez, and the Palestinians, meanwhile, *are* all celebrating. Congratulations on making so many dictators & thugs happy. A century from now, your choice will be infamous.

If anything, this thread is conclusive proof that Jane's Law is alive and well.

I see quite a few Republicans that have no problem with a paper trail. What they don't seem to care for is a paper trail for "I'm not registered and don't have any ID and have to read my name off of a 3x5 card but let me vote anyway" voters.

Do you have any examples of unregistered voters who don't know their own names attempting to vote? If not, perhaps you could give an example from the real world of just what it is that angers you so.

Libertine sectarianism--a juvenile disorder.

It really is: the libertines haven't grown up since the 60's. They seem to imagine that they can win elections by projecting the "To the gas chamber--go!" message. Let people believe that we will have them selling apples on streetcorners and living in cardboard shacks. That's a plan!

Children , children, the world we live in the world we live in. Technology necessitates that government stimulate and even generate a kind of demand for labor. The task of governance is to make this pseudo-demand as rational as possible. This is done by getting the money as far down the chain of subsidiarity as practicable, which we had been doing by tax cuts and creeping privatization.

The childisn fools have set things back by years by their infantile petulance--pfui!

I don't know what Jane's law is.

I posted just a simple observation of the facts. Ahmadinehad, for one, said Tuesday was "a clear victory for *Iran*" [emphasis added]

"Who ever gets to vote for
what they want? Did you?"
I sure did. I voted for Mark Sanford for Governor-- exactly what I wanted.

I am looking for the percentage a person pay of their income

One last try before I give up: In what way does what you're looking for differ from the effective tax rate?

Why shouldn't capital gains be taxed the same as ordinary income?

Simple - money has a time value. In other words $100 a year from now is worth less than $100 today. If the discount rate is 2.5 percent and someone invests now and only gets a 2.5 percent return they've only broken even. If that gain is taxed as ordinary income the investor has lost money. There are also social benefits to saving and investing as opposed to consumption as well - investing allows companies to expand, thereby creating more jobs and expanding the tax base, so taxing capital gains (or interest) at lower rates encourages that.

Brian:

"Thorley - the no negotiation part of Medicare Part D has always bothered me. Any company that doesn't use it's buying power to negotiate is leaving money on the table. It's a principle that works for WalMart and it should work for the US goverment but like most things it's in the excution that things will get fouled up."

You may like this or you may not, but I think you ought to realize that "negotiation" implies the imposition of a government formulary.

Medicare: "You nor charge $1000/patient for your cancer drug. We would like to pay $500.

Drug company: "We don't want to reduce our price. What's the 'or else'?"

Medicare: [fill in the blank]

The government has to have a credible threat to stop buying a particular drug for this to work. That's fine for generics, but for drugs still on patent it amounts to a formulary.

-dk

Actually, the win by Democrats this week makes it more likely that a Republican will be elected as President in 2008. Because of what happened during the last few years, for the foreseeable future, Americans will stay with the divided Government model. In 2008, the Senate could go back into the R column, if judicial activism continues to raise its ugly head and Democrats play politics with the confirmation process for judicial appointees. But, Americans voted for divided Government on Tuesday and will probably stick with it for a while and keep the House in the hands of the Democrats. Of course, that assumes that the Democrats don't screw things up in the next two years. If that happens and the President's foreign policies are vindicated by positive results, the electorate could simply toss them out again. If the Democrats want to share power, they will have to produce tangible results. This election contained no evidence of a mandate for the Democrats or their liberal tendencies. If the Democrats don't moderate their approach, they will simply set themselves up for a losing hand in the future.

With regard to Bush caving to everything that the Democrats want in the next two years, I just don't see that happening. After the smoke clears, Bush will remain what he has always been. He will not support attempts to cut and run in Iraq. He will continue to nominate constitutional constructionists to fill Federal judicial vacancies. He will veto any bills that aim to eliminate tax reductions or that propose new taxes. He will fight for reauthorization of the No Child Left Behind program. He will support legislation that provides a common-sense approach to comprehensive immigration reform. He will attempt to work with the Democrats on meaningful cost-cutting reforms to entitlement programs, but will undoubtedly be rebuffed by them in this effort. He will veto budget-busting proposals to further expand entitlement programs (some of you would say that the Medicare Drug Program was such a proposal, but you don't say what we should have done to help current retirees in their uphill battle to pay for the drugs that they need). In short, he will continue to be what he has always been and life will go on.

My best guess for the next two years is that Congress will be gridlocked and be incapable of passing any meaning new legislation. The only meaningful things happening will be what Bush is able to do on the Foreign policy front. I wish him well in this endeavor. We really can't afford lack of progress in this key area. Speaker Pelosi will try to interject herself as an ersatz commander-in-chief, but will be rebuffed by Bush in all these attempts. He will never cede power to anyone in Congress on this key aspect of his job.

Looks like "Jane Galt" really threw some sand into the gears of the state, huh?

At least with the Republicans, we just got bumbling technocracy and petty corruption, not authoritarian utopianism and a Euro-style nanny state.

At best, we will get Clintonian small-bore micromanagement of our lives through dumb tax incentives, while average tax rates on productive stuff, like working and investing, go up.

Thanks for doing your part for "change". At least you have a Galt's Gulch to hide out in; the rest of us have to live under these numbskulls.

Of course the Democratic congress will pursue its liberal/socialist agenda. We libertarians certainly knew that going in. Our logic was simple-since we were not going to get a Libertarain majority, gridlock was the best we could hope for. With a Republican president for 2 more years, we needed at least one house Democratic to slow down the rush to a police state.

We should be able to count on Bush to veto the worst stuff but no guarantee on that. He might trade off a signature on some socialist fiasco in exchange for NSA wiretapping or some such plan.

We won't be safe until there is a Libertarian majority.

"Ridiculous" said Mark, "pisses me off."
Amen, amen, amen.

Electing democrats will slow down the rush to a police state? What short memory. Remember Waco? Ruby Ridge?

Any libertarian who votes for a democrat has betrayed his principles. Hang your heads in shame.

Sorry Jane, you get no sympathy from me. We already know that in one generation Europe will be Muslim (read Mark Steyn’s America Alone) and thanks to Jane’s vote, America will be so in 2 to 3 generations. Once Muslims are a majority, you can kiss the Constitution good-bye, because the primary law in Islam is sha’ria law. In countries that follow sha’ria law, the only education boys get is rote memorization of the Qu’ran (girls don’t go to school – they aren’t worthy), homosexual men are hanged, uppity women are stoned. I wonder how they treat lesbians – do they hang them or stone them or both? No other religions are tolerated; churches and temples cannot be built. But I don’t care anymore. I’ll be dead before it happens and I have three sons. They will be able to beat their wives into submission. The Qu’ran says they can. Thanks, Jane.

So Jane, it sounds like you saying that you traded the evil that you did know, for the evil that you should've known?

I think this is a great example of the uselessness or protest votes.

I love that Brian could think that the top quintile paid only 26% of the tax burden! The top quintile's share of all federal taxes was 65% in 2003, and higher in subsequent years.

Effective Rates

Share of liability

Actually Mindles - I don't believe that all. I am well aware that the top quintile pays the lions share of taxes. But keep punching that straw man. You will develop quite a jab that way.

I wrote:
I see quite a few Republicans that have no problem with a paper trail. What they don't seem to care for is a paper trail for "I'm not registered and don't have any ID and have to read my name off of a 3x5 card but let me vote anyway" voters.

Purple enquired:
Do you have any examples of unregistered voters who don't know their own names attempting to vote?

Only from anecdotes. I also have anecdotes of dead people voting, and people whose primary residence consisted of a vacant lot or parking garage voting, precincts turning in more votes for a particular party than there were registered voters, voting machines rigged to not record the votes for a particular candidate, and so forth. Nothing special, just garden variety vote fraud...

If not, perhaps you could give an example from the real world of just what it is that angers you so.

Dear, me, someone confused ironic amusement with anger. So what is it about fraudulent voting & ballot-rigging you find so attractive?

So Dick your argument is that the fact that the large government entity is negotiating is the problem? If Wal-Mart negotiates a better rate on precription drugs beca