Club Wagner April 15, 2011

I have asked to become a member of Club Wagner. I cannot be both that and a California Republican, that has been made abundantly clear.

Related: “Club Wagner” by Douglas Holtz-Eakin at Blogs

Related: “Conservatives for Higher Taxes” by David Leonhardt at Blogs

Menikov 04/16/2011

I’d support higher taxes if we had different leaders in Washington. As things are, I see no evidence that higher taxes will reduce the deficit: they will merely enable additional spending. Somewhat like giving foreign economic aid to dictators: It enables them to have larger armies.

barrywhitesides 04/16/2011

I remain a bit perplexed.  What you are saying is that tax REVENUES must rise.  Since they have remained around 20% of GDP, you are also arguing that it must rise both absolutely and as a % of GDP to match spending levels.
Taxes HAVE risen…just not on everyone.  They have simply proliferated to include Communications taxes, court sur-charges, HSA fees on airline travel and in state license fees, gas taxes, sales taxes and ‘special assessment districts’.  The current debate is over raising Medicate, Social Security and FIT on some of the population…the so-called rich.  And we get taxed on the revenue we earn to PAY taxes…double and triple taxation…a de facto sur tax.
We have demonstrated that a rise in the RATE of taxation does not result in a rise in REVENUE.  Rather it changes investment, moving it away from production to passive tax sheltered returns.
I’d argue that inflation is itself a tax to pay for the overspending.  That those who saved present dollars for children’s education, for retirement, etc. see that eroded by inflation…and that inflation of asset paper value (housing, stock) also produces a phony ‘profit’ which is taxed while the spending power of the investment declines.
The best way to raise revenue is to stimulate growth.  I’ll support raising revenue…including tax rate increases…when they (a) bring baseline/essential spending into balance, (b) when the government indexes rates for inflation (as they failed to do with the AMT), and (c) when the tax increases apply to all citizens equally.
The non-essential regulatory oversight is a govenor on growth that kills new business formation.  The EPA does not need funding to regulate CO2.  The IRS does not need funding to regulate health insurance.  The affore-mentioned IRS does not need to have reporting on income transactions that are non-taxable.
The governmental ‘right’ to tax everything (internet spending) is simply a money grab and not sound financial policy. VAT as an ADD ON to FIT is a non-starter.
As a new Wagner Club inductee, you should be able to say that if revenues are to rise…what are they to rise as a function OF? And is the rise in revenue mutually exclusive of equal protection under the law…or are the rich really somehow different in their civic responsibilities.

Howard Ahmanson 07/25/2011

Barry, I believe in the Laffer Curve, but the Laffer Curve curves. When the top rate was reduced from 70% to 39 %, or whatever it was, the government actually did gain revenue. When the top rate went from 39% to 28%, however, it was a different matter, and the government may have actually lost revenue. As for the civic responsibilities of the rich, (both in tax and charitable sectors) I would say that they are different in degree, but not radically different in kind, from the civic responsibilities of the rest of us. That is the point of the doctrine of the tithe. 

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