Sunday, August 07, 2011

Annoyance With Republicans

No surprise, but a lot of things the Republicans have done lately have annoyed me. Here are a few:

Steve Benen has a A timeline of events listing various things affecting the deficit since 1980. It's clear the Democrats have been more deficit conscious and yet the Republicans continually present themselves as the financially responsible party, and do so successfully!

Matthew Yglesias explains GOP Now Blocking Recess Appointments. The House is going to have short sessions throughout their August recess, which procedurally will keep the Senate in session, which means Obama can't make recess appointments. "I find that my mood around this fluctuates. Mondays and Wednesdays I’m frustrated by lefties who seem to see the unprecedented Republican obstruction the President is dealing with as part of an 11-dimensional chess game through which Obama “really” wants his progressive initiatives to be frustrated at every term. On Tuesdays and Thursdays I think this is the most damning critique of all. In the face of an opposition that’s been relentlessly innovative, the White House has been staggeringly uncreative. Rather than a game of tit-for-tat, the Republicans seem to be inside the administration’s decision loop, heading off their retaliatory options before the President has even exercised them."

The 11 dimensional chess line is a reference to several James Fallows posts, here's one of the latest, Obama as Chess Master: 'Think of Him as Bobby Fischer'.

But wouldn't it be nice if Obama could appoint people to fill the two vacancies on the Federal Reserve Board? " One of those seats is vacant because Senator Richard Shelby (R-AL) thought an economist with a Nobel Prize wasn’t qualified for the job. The nominee in question withdrew, and Obama hasn’t named anyone else. The second open slot nobody’s ever been nominated for."

Here are three isolated examples of simple mistruths.

Kevin Drum wrote How To Lie With Figures. His congressman John Bayard Taylor Campbell III (R-CA) sent a letter called a Taxpayer's Statement (a good idea) which under revenues included a line "Miscellaneous Receipts" that showed an 86.22% increase from 2009-2010 up to $95,873,000,000. The footnote explains it as "This includes taxes from a variety of places including gaming activity fees, Dept. of Interior fees, Puerto Rico, and other sources." which sounds nasty. Drum looked into it, "The vast bulk of that number, about $75 billion, is profit from the Federal Reserve's investments that have been returned to the Treasury. But even if you read the footnote you wouldn't know that. It just looks like the gummint is sucking up ever more of your money."

Drum also wrote When is a Regulation Not a Regulation?. "I don't remember now where I first saw this, but apparently the conservative community is in an uproar over proposed new rules that would classify farm equipment as commercial vehicles, thus requiring farmers to get commercial drivers licenses, keep detailed logs, submit to periodic drug testing, etc. etc. It would be expensive and annoying and farmers don't like it. Just another example of the overbearing Obama administration regulating us to death."

"So here's what seems to have happened. The FMCSA has long had rules that defined most grain haulage as interstate commerce and designated farmers hauling shared crops as commercial operators. This was never a big deal because they had never enforced those rules and neither had anyone else. But then Illinois decided to start enforcing the letter of the law and Illinois farmers were unhappy. So now FMCSA is asking whether these regulations ever made sense in the first place...But it looks like the outrage over this is yet another example of Obama Derangement Syndrome in action. Far from trying to implement a barrage of regulations on our nation's farmers, FMCSA is apparently trying to stop state officials from implementing a barrage of regulations on our nation's farmers."

Finally, here's Ezra Klein on Why do half of all Americans pay no federal income taxes? which I've heard going around lately. It's usually treated by the right as a negative, which I don't really understand because they want low taxes right? But I guess the issue is that it's the poor that don't pay taxes. And of course big companies like GE.

"A new report (pdf) from the Tax Policy Center breaks it down. In 2011, about 46 percent of households won’t pay income taxes. For about half of them, the standard provisions of the income tax wiped out their liability...For the other half, various tax expenditures wipe out their liabilities. Elderly tax benefits are the biggest player here. They get an extra standard deduction, an exemption for some Social Security benefits, and more. Then come various tax credits for children -- for instance, the Child Tax Credit in the Bush tax cuts -- and the working poor. And then come a lot of smaller credits that you can read about in the paper. "

Screen shot 2011 08 07 at 2 33 06 PM copy

"Many politicians complain about the number households that don’t pay income taxes. But they complain about them in very general terms. " The then quotes Sen John Cornyn (R-TX) doing so. "Would he repeal the Bush tax cuts? That would bring households benefiting from the expanded Child Tax Credit and the lower marginal rates back into the system. Would he propose that seniors get a smaller standard deduction, or pay taxes on their full Social Security benefit? Would he lower the standard deduction for non-seniors? Would he say that these programs should be conducted through direct spending rather than the tax code, and so the Earned Income Tax Credit will simply send low-income beneficiaries a check rather than first wiping out their tax liability? His statement mentioned tax reform, but it didn’t get into any of these details."

10 comments:

Ken Flowers said...

One interesting argument for why it might be bad to have half the population not pay taxes is that makes a majority that can vote to receive, knowing they don't have to pay. Unlikely, but plausible.

I'm more concerned because I don't have a sense that the our population is half un-capable of participating in funding the things we all want. I have a sense that < 20% of our population is too poor to participate. I could be wrong, but that's my sense.

My issue is not to make the poor pay more. My concern is that the difference between my 20% number and the 47% number, are people who are taking advantage of the rest of us, and setting up a system of I-don't-have-to-participate-because-that-rich-guy-should-support-me.

That said, I'm leaning toward a flat tax recently, or even a VAT style to capture unreported/undocumented wages, but coupled with a good social safety net for the needy.

Howard said...

My sense is it's bigger than 20%. I can't find a percentile breakdown quickly. I did find that the median income is $33,190 (according to wolfram alpha for 2009). Also the report in this post says a large number is for the elderly. Aging population and all that.

I've also seen recently stated that the top 400 people are worth more than the bottom 50% combined. As evidence I found this, http://www.politifact.com/wisconsin/statements/2011/mar/10/michael-moore/michael-moore-says-400-americans-have-more-wealth-/

Howard said...

Table 1 in the pdf report linked to in the main post (just above the graph) has some good numbers.

Ken Flowers said...

Couldn't find the graph. I did find this census data: http://quickfacts.census.gov/qfd/states/00000.html. It shows a median household income of $50K and a per capita of $27K. More relevant is the below poverty line percent: 14.3%.

I'm thinking about this poverty question quite a lot recently. It's oddly hard to get a handle on. For example, should we count someone in a nursing home on medicare (that they paid for while working) with no expenses as poor? I don't know. And if they have $200K in trust that the government can't count, and no income, do we count them? I don't think so.

How about the drug addict, who has milked his family so much they won't give him more money. Now he's in public housing, but still using. I know him. I'm not sure.

How about the woman with 1 kid, who has two more because she "loves kids", but was already on welfare with no job, public housing, and works under the table growing pot. I know her too. Is she poor? I'm not sure.

Anyway, I also think it's irrelevant what the top 400 make. They are so statistically unusual, on one hand. I couldn't even find the standard deviation of wealth, but I'm guessing more than 3 sigma.

And, what difference would it make anyway if the poor get richer, that they aren't getting richer as fast as the super-rich? Does it hurt them, or are rich people just bad, and we need to Robin Hood them?

Sorry, I sound grouchy. I really don't mean to be. These are honest questions I'm having. I'm glad to talk about it with someone smart and not vicious. I don't get many chances. Thanks,
Ken

DKB said...

@Ken Flowers: It probably would NOT matter if the poor were getting richer but the rich were getting richer even faster. That is unfortunately nothing like the truth, which is that the poor and middle class are getting POORER in constant-dollar terms, while the rich are getting richer at an astonishing rate.

Howard said...

So there is where it's hard for non-economists to figure some of this stuff out. I use the St Louis Fed, FRED and Wolfram Alpha for economic data. In alpha I entered "median wages" which is how I got the $33K number. It turns out that's for individuals. If you enter "median income" you get all household income which is the standard measure and that's the $50K number you got.

Your examples I agree are problematic, but of course they're also anecdotal and it's not clear to me how many of these there are. I think this is the mostly the difference between the right and the left. The right views the recipients of social programs as somehow frauds, not deserving of their benefits and the left sees them as in need. Of course there are some of each, but if it's an 80/20 split, which way is it? I'd say all the ones in your examples are breaking the law. I say the criminals should be tried and the others should get their benefits.

I don't think rich people are bad, unless they broke laws and I don't assume they did. But I do think the inequality is indicative of a system that's out of wack. It's wrong that the wealthy pay a lower effective tax rate than the poor, and I believe in a progressive tax system that says they should be paying more than the poor. If you have to tax, tax where the money is. I don't want to go back to a 90% top bracket, but really, I don't understand why going back to the rates of the 90s is unreasonable.

And yes, I'm enjoying having a rational conversation with someone with opposing views. I haven't had many of them.

Ken Flowers said...

Hi DKB - A search of Wikipedia for "Wealth in the United States" has some graphs that show differently. In addition, it shows mobility numbers of 50% of the 2nd lowest quintile moving up compared to 17% moving down.

Of course that was in 2007 constant dollars. Things could be different now.

Ken Flowers said...

Howard, I agree the wealthy shouldn't pay a lower nominal rate than the poor.

I'm still not sure about my example people. One is doomed by addiction. I could convince myself that they are "powerless" and need this help. And another had really bad examples growing up, and drug problems of her own.

I honestly do judge these people, but the alternative of having them rotting on the streets is not attractive either. Debtor's prison doesn't seem effective either.

I'm really struggling with this.

Howard said...

The wikipedia page was interesting. But I suspect that household net worth dropped considerably when the housing market crashed. That's one of the big problems. Those second mortgages when the home value crashed. Lots of wealth was lost three years ago.

Of course Alpha didn't seem to understand median household net worth.

Howard said...

See "The Brain on Trial" article I just posted. I might just confuse you more. :)