Friday, August 13, 2004
Tax Policy 101
In today's Paul Krugman column, Krugman talks about Bush's plans for the "ownership society" and how this influences his tax cuts and Social Security policy. It's a good critique of Bush's approach to these things and is worth a read. At the same time, there was another article up on the New York Times entitled "Report Finds Tax Cuts Heavily Favor the Wealthy". This has to be setting Bill O'Reilly's hair on fire as he rants and raves about the "liberal New York Times", though the report the article cites is simply from the non-partisan Congressional Budget Office.
I thought a brief discussion of Bush's tax policy might be in order now that this article gives me some numbers to work with. I find actual numbers and facts nice to work with when discussing this stuff instead of simply saying things like "They're going to raise your taxes; we're not.". I also should give the usual disclaimer that I have no background in any of this stuff and just go with the numbers I have here and common sense, which probably overqualifies me for a spot among Bush's economic team.
We're running massive deficits now of course, which makes the idea of tax cuts rather ludicrous (though that's not stopping Bush from wanting to make the cuts permanent), but let's pretend we're back in 2000 and trying to figure out how to get our hands on this juicy government surplus. Bush's claim was basically, "I believe anyone who pays taxes should get their taxes cut." What that means, at least as I understand it, is essentially a cut consisting of cutting the percentage people pay in taxes, so that if you made $50,000 in a year and paid $10,000 in income taxes you would pay $1,000 less, and if you made $500,000 in a year and paid $100,000 in income taxes you would pay $10,000 less... my example is off I'm sure but that's the general idea. In other words, the more you make, the more you pay in taxes, the more your tax cut will be.
Looking at that from a certain perspective it makes sense... just cut the tax rates the same percentage across the board. If you make ten times as much, you pay ten times more in taxes and you would get ten times the tax cut... it's more complicated of course due to the fact that higher-income people pay higher tax rates but have more options to avoid paying those taxes, but the general concept is sound. Of course, since the wealthy pay a large portion of the nation's income taxes, this method would lead to the wealthy getting a large portion of the tax cut, which is exactly what has happened.
From a more liberal perspective, you would say that the person earning $50,000 a year is being squeezed harder in today's economy, and thus that $1,000 to them means a lot more than the $10,000 means to the $500,000/year earner, so we ought to fix those numbers a bit... maybe give $2,000 in tax relief to the poorer guy and $5,000 to the rich guy who doesn't need it as much and isn't as likely to spend it anyway. This would lead to the upper class paying a higher percentage of the tax burden, but still getting a larger share of the tax relief than they represent as a portion of the population.
These two approaches are up for debate, and obviously a pretty fierce debate exists as to the benefits of each one. Democrats say that the Republican approach amounts to "trickle-down" economics where the people who get the tax cuts aren't the people who need tax cuts, and Republicans say that the Democratic approach is "class warfare" and leads to the wealthy paying an even larger share of the tax burden, which is unfair.
Now the point in all this, which I'm getting to, is that I personally only consider the Republican method "fair" if the amount of tax relief you get is actually proportional to the amount of income you have. In my example above, this was represented by both the rich guy and poor guy getting a straight 10% cut in their taxes, which gave the rich guy a whole lot more money because he made a whole lot more money, but each received 2% of their gross yearly income back as a result of the tax cut.
As the NY Times article shows, however, even this concept of fairness is lost in the Bush tax cuts:
Doing the math, the top 1% got, on average, 6.5% of their income back with the tax cuts. But the middle 20% got, on average, 1.9% of their income back with the tax cuts. Not only are the dollar amounts hugely different, but even percentage-wise the top 1% got over three times the tax cut of the middle 20%. So while the $57,000/year household is celebrating their extra grand and thanking the Bush administration for it with their vote, the $1,200,000/year household is buying a new Hummer and sending their kid off to college in it with tuition fully paid with their tax cut money, and depending on the college, using what's left over to thank the Bush administration for it with the maximum contribution of $2000.
If the top 1% household had had their taxes cut at the same percentage rate of the middle 20%, 1.9 percent, they would have received $23,000. Democrats would still complain that the $57,000/year household could use that money more and the debate would continue, but maybe the well-off household could use that $23,000 and buy a Prius or something, making both liberals and conservatives happy.
Unfortunately, even on a percentage basis, Bush gives three times as much tax relief to the wealthy as he does to the middle class, and in a pure dollar basis the difference is even larger. So who's engaging in "class warfare" again?
I thought a brief discussion of Bush's tax policy might be in order now that this article gives me some numbers to work with. I find actual numbers and facts nice to work with when discussing this stuff instead of simply saying things like "They're going to raise your taxes; we're not.". I also should give the usual disclaimer that I have no background in any of this stuff and just go with the numbers I have here and common sense, which probably overqualifies me for a spot among Bush's economic team.
We're running massive deficits now of course, which makes the idea of tax cuts rather ludicrous (though that's not stopping Bush from wanting to make the cuts permanent), but let's pretend we're back in 2000 and trying to figure out how to get our hands on this juicy government surplus. Bush's claim was basically, "I believe anyone who pays taxes should get their taxes cut." What that means, at least as I understand it, is essentially a cut consisting of cutting the percentage people pay in taxes, so that if you made $50,000 in a year and paid $10,000 in income taxes you would pay $1,000 less, and if you made $500,000 in a year and paid $100,000 in income taxes you would pay $10,000 less... my example is off I'm sure but that's the general idea. In other words, the more you make, the more you pay in taxes, the more your tax cut will be.
Looking at that from a certain perspective it makes sense... just cut the tax rates the same percentage across the board. If you make ten times as much, you pay ten times more in taxes and you would get ten times the tax cut... it's more complicated of course due to the fact that higher-income people pay higher tax rates but have more options to avoid paying those taxes, but the general concept is sound. Of course, since the wealthy pay a large portion of the nation's income taxes, this method would lead to the wealthy getting a large portion of the tax cut, which is exactly what has happened.
From a more liberal perspective, you would say that the person earning $50,000 a year is being squeezed harder in today's economy, and thus that $1,000 to them means a lot more than the $10,000 means to the $500,000/year earner, so we ought to fix those numbers a bit... maybe give $2,000 in tax relief to the poorer guy and $5,000 to the rich guy who doesn't need it as much and isn't as likely to spend it anyway. This would lead to the upper class paying a higher percentage of the tax burden, but still getting a larger share of the tax relief than they represent as a portion of the population.
These two approaches are up for debate, and obviously a pretty fierce debate exists as to the benefits of each one. Democrats say that the Republican approach amounts to "trickle-down" economics where the people who get the tax cuts aren't the people who need tax cuts, and Republicans say that the Democratic approach is "class warfare" and leads to the wealthy paying an even larger share of the tax burden, which is unfair.
Now the point in all this, which I'm getting to, is that I personally only consider the Republican method "fair" if the amount of tax relief you get is actually proportional to the amount of income you have. In my example above, this was represented by both the rich guy and poor guy getting a straight 10% cut in their taxes, which gave the rich guy a whole lot more money because he made a whole lot more money, but each received 2% of their gross yearly income back as a result of the tax cut.
As the NY Times article shows, however, even this concept of fairness is lost in the Bush tax cuts:
The report calculated that households with incomes in that top 1 percent [averaging $1.2 million a year] were receiving an average tax cut of $78,460 this year, while households in the middle 20 percent of earnings - averaging about $57,000 a year - were getting an average cut of only $1,090.
Doing the math, the top 1% got, on average, 6.5% of their income back with the tax cuts. But the middle 20% got, on average, 1.9% of their income back with the tax cuts. Not only are the dollar amounts hugely different, but even percentage-wise the top 1% got over three times the tax cut of the middle 20%. So while the $57,000/year household is celebrating their extra grand and thanking the Bush administration for it with their vote, the $1,200,000/year household is buying a new Hummer and sending their kid off to college in it with tuition fully paid with their tax cut money, and depending on the college, using what's left over to thank the Bush administration for it with the maximum contribution of $2000.
If the top 1% household had had their taxes cut at the same percentage rate of the middle 20%, 1.9 percent, they would have received $23,000. Democrats would still complain that the $57,000/year household could use that money more and the debate would continue, but maybe the well-off household could use that $23,000 and buy a Prius or something, making both liberals and conservatives happy.
Unfortunately, even on a percentage basis, Bush gives three times as much tax relief to the wealthy as he does to the middle class, and in a pure dollar basis the difference is even larger. So who's engaging in "class warfare" again?
Monday, August 09, 2004
"Whoops."
I've tried, on several occasions, to make the point that the Bush administration's incompetence is as great or greater of a threat than their extreme conservatism. That is, the only thing worse than persuing a neo-conservative policy with dubious goals is persuing that policy in a clumsy and inept manner. We've seen the results of this in Iraq, where a war with little upside to begin with turned into massive downside, we've seen this in our economy, where tax cuts with little upside to begin with turned into massive deficits, and we saw incompetence in going after the top leaders of Al Qaeda and crafting a coherent response against terrorism and Islamic jihadism.
Now coming off the terror warnings of August 1, which were already bungled sufficiently enough to give ammunition to critics who claim the administration only released the warnings for political reasons, we find that the administration inadvertantly outed a Pakistani double agent working inside Al Qaeda. The consequences of this further incompetence are rather alarming:
Now coming off the terror warnings of August 1, which were already bungled sufficiently enough to give ammunition to critics who claim the administration only released the warnings for political reasons, we find that the administration inadvertantly outed a Pakistani double agent working inside Al Qaeda. The consequences of this further incompetence are rather alarming:
Neville Dean of PA News reports that a magistrate has given British police only until Tuesday to finish questioning 9 of 13 men arrested August 3 on suspicion of being part of an al-Qaeda cell. The men had been in email correspondence with Muhammad Naeem Noor Khan, who since mid-July has been functioning as a double agent for the Pakistani government. He was arrested in Lahore on July 13 and "flipped."Can you imagine four more years of these guys running things? Are you starting to see why I'm so worried that Bush might find a way to win? It's more than just, "jobs are hard to find." It's more than just, "I don't like Big Oil." It's stunning conflicts of interest, it's stunningly misguided priorities, and it's horrid ineptitude in even putting those priorities into effect. And this is just the tip of the iceberg.
The Bush administration revealed Khan's name to US journalists on Sunday August 1 on background, and it appeared in the US press on Monday. The Bush administration thus effectively outed Khan as a double agent (he sent emails to his London contacts as late as Monday).
The British MI5 was forced to have the London cell of 13 arrested immediately on Tuesday, fearing that they would flee now that they knew Khan had been arrested two weeks earlier. The British do not, however, appear to have finished gathering enough evidence to prosecute the 13 in the courts successfully.
It now turns out, according to Neville, that "Reports last week also claimed that five al Qaida militants were on the run in the UK after escaping capture in last Tuesday’s raids." If this is true, it is likely that the 5 went underground on hearing that Khan was in custody. That is, the loose lips of the Bush administration enabled them to flee arrest.
Sunday, August 08, 2004
More Russert Show Transcripts, And I Catch O'Reilly Lying
This was the other time O'Reilly looked like he wanted to tackle Krugman. Al Franken set him off this time.
Also, here's O'Reilly trying to smear the "Outfoxed" documentary when he can't even get what he said right:
I apologize for not including more transcripts of Krugman and O'Reilly's discussions on actual policy matters. Those were equally interesting and sometimes unbelievable, but I only have time to transcribe so much.
O'Reilly: Look, again, Krugman's opinion on this is not irrational, alright, that the tactical war against terror might not have been well-served by the Iraq adventure. That's a legitimate debate, OK. What I object to is the lying charges, the slander and defamation that comes out of the "Krugman wing", if you want to call it, of the social landscape. <Krugman chuckles> And don't give me that... who were you appearing with today in your book signing? You're appearing with Stuart Smalley, the biggest character assassinator in the country.
Krugman: The guy you compared to Goebbels?
O'Reilly: You are in with the most vile form of defamation this country has. You are pandering to it, and I resent it sir.
Krugman: Well, we resent you too.
O'Reilly: Yeah, I know you do, and you know what you'll do about the resentment? You'll lie about me and attack me personally, THAT'S WHAT YOU'LL DO.
Krugman: Let's watch that, OK. As I said, it's kind of hard to have a reasonable discussion here. But...
O'Reilly: I think it's reasonable. Russert would throw me out of here if it wasn't.
Krugman: Would he? I don't think so. <Russert smiles>
Also, here's O'Reilly trying to smear the "Outfoxed" documentary when he can't even get what he said right:
I decided to see for myself just how dishonest it gets, so here is the "shut up" montage from Outfoxed (XviD or ffdshow required). Apart from the other examples of Bill telling people to "shut up", which he claimed he could easily explain away, here's the example he was talking about. Let's see how the actual video from the actual documentary stacks up against what O'Reilly said he said.
Russert: So the broadcasters and journalists on Fox News take marching orders?
Krugman: Of course they do. I mean, if your fantasy was that there was a memo every morning that told you how we're going to cover the news so as to slant it, your fantasy would be right. We've now got copies of the memos.
O'Reilly: Alright, look. Mr. Krugman lives in a world of his own. He embraces propaganda of the worst kind, and that's why I have very little regard for his professional analysis. I'll give you one example about that stupid thing [Outfoxed]. They put together a collage of me telling people to "shut up", OK? In one of the... and this is just one, I can give you a hundred but I don't want to waste time on it. In one of the discussions I had, I was talking to a young gay guy who was in a lot of trouble because he had outed himself in high school, and I said, "Why don't you just shut up about your sex life?" That's what I said. They cut it with, "Why don't you just shut up?" That is about as dishonest as it gets.
Derek Hinkle (gay student): Well you know, I think that asking a student to stay in the closet in order to go to school is a lot like asking an African American student...Now Bill was almost right about what he actually said, though the actual wording is not in the form of a question but of a demand for the kid to shut up, which was the whole point. He was completely wrong, of course, about the documentary not showing his whole sentence, which was the crux of his argument about Outfoxed being misleading propaganda. I think that is about as dishonest as it gets. Plus, the other examples of Bill telling people to shut up are probably worse than that one, which I guess is why he chose to lie about that one in particular. Of course, most people who watched the show on CNBC probably haven't seen the documentary and can't tell that he's lying about how he's represented in it. That's what I'm here for.
O'Reilly: I'm asking you to shut up about sex... no no no.
I apologize for not including more transcripts of Krugman and O'Reilly's discussions on actual policy matters. Those were equally interesting and sometimes unbelievable, but I only have time to transcribe so much.
O'Reilly, Krugman On Tim Russert's Show
Just in case I didn't have enough proof that Bill O'Reilly is a raving lunatic...
I happened to notice while flipping through some channels tonight that Paul Krugman and Bill O'Reilly were appearing together on Tim Russert's CNBC show. You heard that right. I quickly set up the VCR to tape the last half hour of it... perhaps I can get the whole thing when it re-airs in a half hour. What I saw was pretty amazing.
At least twice, Bill totally flew off the handle and Krugman looked perhaps a little frightened, rightfully so. The second time Bill went nuts was after this exchange:
I'll try to tape the whole show at 1 AM if I can... there was another part during the half-hour I watched where O'Reilly got pretty flustered but I can't recall what prompted it off the top of my head. I would love to post some clips of this stuff but I'm not set up to capture and encode video like that anymore and it would take some work to do so. You really have to watch parts of the show in their entirety to get the full effect though, like the number of times O'Reilly told Krugman he had no respect for him or his professional opinion or his employer, or listening to O'Reilly try to assert that Fox News had as many liberal commentators as conservative ones.
That one deserves its own paragraph here actually... O'Reilly went through Fox's lineup, describing the political leanings of its hosts as follows: Van Susteren - liberal, Colmes - liberal, Hannity - conservative, O'Reilly - "traditionalist", Brit Hume - "slightly conservative". I'll just let all that sink in. After watching "Outfoxed" last night this was especially ludicrous.
Finally, the Washington Post has a brief blurb on this show here.
I happened to notice while flipping through some channels tonight that Paul Krugman and Bill O'Reilly were appearing together on Tim Russert's CNBC show. You heard that right. I quickly set up the VCR to tape the last half hour of it... perhaps I can get the whole thing when it re-airs in a half hour. What I saw was pretty amazing.
At least twice, Bill totally flew off the handle and Krugman looked perhaps a little frightened, rightfully so. The second time Bill went nuts was after this exchange:
Krugman: Bill has said on the air that "Michael Moore believes that we are an evil country." And if you saw the film you know that's not true. And actually you denied on the same program that you said what you just said, but anyways, I think that's a little bit something to...At this point, Russert finally breaks in and lets Krugman read the quote, as O'Reilly mutters, "What a bunch of crap." The transcript really doesn't do it justice as O'Reilly is screaming at points, jabbing his finger at Krugman and throwing his arms all about. All because Krugman had the gall to suggest that he can't monitor all right-wing media himself and had to rely on mediamatters.org to catch something for him. Visit Media Matters yourself and see if O'Reilly's Klan analogy isn't the most absurd thing you've ever heard. At least the fact that the mere mention of the website raises such ire in him suggests that the site, which only catalogs things the media themselves show, is doing something right.
O'Reilly: Can you give me the date of the program?
Krugman: Oh sure, June 28th on the "Radio Factor". (reading from a sheet he has in front of him)
<later...>
O'Reilly: And where did you get that little "evil" quote by the way? You don't listen to the "Radio Factor".
Krugman: No, but they have video footage.
O'Reilly: Well who gave it to you?
Krugman: Yeah, Media Matters.
O'Reilly: MEDIA MATTERS! Oh, I see, a real objective website. Hey, Mr. Propaganda, you wanna take and do your own research pal, and stop taking the left wing garbage and throwing it out there for the folks. DO YOUR OWN RESEARCH.
<crosstalk>
O'Reilly: You are about the most unobjective person on the face of the... Media Matters... why don't you just call up Fidel? Call him up in Havana, he'll tell you what's going on.
<crosstalk>
O'Reilly: That's like me calling some Klan operation. Why don't I call the Ku Klux Klan?
I'll try to tape the whole show at 1 AM if I can... there was another part during the half-hour I watched where O'Reilly got pretty flustered but I can't recall what prompted it off the top of my head. I would love to post some clips of this stuff but I'm not set up to capture and encode video like that anymore and it would take some work to do so. You really have to watch parts of the show in their entirety to get the full effect though, like the number of times O'Reilly told Krugman he had no respect for him or his professional opinion or his employer, or listening to O'Reilly try to assert that Fox News had as many liberal commentators as conservative ones.
That one deserves its own paragraph here actually... O'Reilly went through Fox's lineup, describing the political leanings of its hosts as follows: Van Susteren - liberal, Colmes - liberal, Hannity - conservative, O'Reilly - "traditionalist", Brit Hume - "slightly conservative". I'll just let all that sink in. After watching "Outfoxed" last night this was especially ludicrous.
Finally, the Washington Post has a brief blurb on this show here.
