You can't fix stupid.

[brickpatio]

The 31% revenue issue is solved this way. If the state's economy grows at its usual pace (e.g. 46% growth from 2002 to 2012), then in that example the tax revenue to the government under current tax rates would increase presumably around 46%, maybe a tad less if the population grows by 5% during that period, so let's say 40% growth in tax revenues over 10 years.

So...logically, if you then cut tax revenues by 31% from a pot of revenues that is 40% larger in 10 years due to the economy being 40% larger, you are still left with tax revenues 9% higher than they were at the beginning (without need to increase other taxes), even after the giant 31% tax cut. Where are the revenues coming from if the individual income tax is eliminated? From increases in revenues from all the other taxes (sales tax, property tax, corporate income tax, etc), which will be larger as a result of a 40% larger economy over 10 years (using example above based on a 3.5% annual growth rate).

And as a back-up plan for slower growth years, I believe they propose to delay the tax cuts in years when the economy and tax revenues grow below a 3% benchmark.

Regarding Tennessee, it has done quite well in terms of growth, as evidenced by places like Nashville which has one of the top 5 economies in the nation according to some rankings. It's true that in terms of per capita income and similar statistics, Tennessee usually ranks maybe 40th or 45th. But on that measure Texas and Florida aren't on top either. That's because, I think, states with booming economies deliver wealth for the local population but they also create new jobs on the lower end for people moving in from other states or the counties, which is a good thing for everyone when you think about it.

E.g. Local Texans have grown extremely wealthy over the years, but all the new jobs have attracted economic migrants from Mexico, Central America and other parts of the US, which keeps Texas lower in some of the statistics, but only because they are such huge producers of jobs and opportunities for people searching for opportunity from all over the world. Ie. it's a good thing.

[An Einnseanair]

Again, I'm not personally in love with the income tax and I have no problem eliminating it... as long as you replace the revenue with something else. I still like the "Fair Tax" concept. I'm also prefer small governments. If government task can be eliminated and have government function smoothly, then eliminate it along with the worker doing that job. But just parroting the screamers on the idiot box saying "cut spending" is flat-out stupid unless you can come up with a specific place to cut. Just globally cutting all areas by 31% results in overworked people and backlogs. Look at the current situation in the VA system... I'll bet somebody got a huge bonus a few years ago with proposed cuts to spending, and now we have US Military veterans dying because they can't even get on a waiting list to see a doctor.

Cutting areas that benefit others while keeping the areas that benefit you is hypocritical and unethical.

You mentioned Tennessee, which has no wage income tax, but they get their money elsewhere. They do tax interest income, so retirees get hit. The sales tax is near 10%. I'm a professional engineer registered in 11 states; my fees to Tennessee are higher than all other 10 states put together. Gas is more expensive in Tennessee.

And you can talk about growth and such all you want. Steady growth built on a solid base where the wealth is spread through the middle class is good. Rapid "paper growth" where the wealth is concentrated in the rich is not good and only leads to collapse. Income inequality (measured as a percentage of total income going to the top 1% compared to everyone else) right now is roughly where it was before the 2007 crash. The only time in US history when income inequality was higher was... 1928.

[brickpatio]

My understanding is that the plan is to only cut tax rates each year commensurate with 3% annual revenue increases that have essentially already occurred. So what they are doing is not so much cutting spending but rather eliminating the usual annual increases in spending that occur each year as the state's economy gets larger and thus delivers larger tax revenues to the government. If that' the case, then annual spending would remain basically the same from one year to the next, not actually cut.

That said, I doubt the plan factors in inflation or population growth, so on a per-person basis I'm sure it's a real cut at some level in spending per person. But I think education and Medicaid take up the biggest portion of state spending... and the amount of waste in Medicaid is unfathomable, due in large part to insane federal rules. It can definitely be cut, for sure.

I'm not sure about your point regarding opposing growth that goes to the top 1%. Regardless of whether or not that actually occurs, I'm not sure what the government can do about that. But from what I've read, it's misleading because the households that occupy the top 1% are constantly changing, presumably based on the success of businesses (and their owners) from one years to the next and based on people's ages.

Incomes will probably never change dramatically for people in their 20s and 30s because their lack of experience and skills in the marketplace means that can't command higher salaries. But once they reach their 50s, after a good 30 or 40 years in the workplace, that's when they reap the benefits of a larger economy with more high paying jobs.

So in other words, when you look at those graphs that show more growth in the top 1% or the top 20% versus everyone else, etc...I think the number of households that occupy those spaces in the rankings is much, much larger over say a 30 year span. In other words, over a 30 year span, it's likely that say 40% of the households at one point or another occupied a spot in the top 20%, based on when their skills and market experience peaked (i.e. in their 50s after being in the work force for 30 or 40 years) and only in the years when the businesses they own had their best years. I definitely don't know this as a fact though...it's just me speculating based on pieces of things I've read over the years and using logic etc.

One supporting point is from looking at per capita income by race and ethnicity. For African-Americans and Caucasians, the growth in per capita income has been about the same for decades...actually a little higher I think for African-American households. If that's the case, that seems to refute the notion that income growth only goes to 1% or 10% of the population.

In any event, I'm not sure how changes in tax rates would effect that top 1% phenomenon one way or another, unless the argument is that since growth only increases incomes for 1% of the population, it's only fair to redistribute their income to everyone else through more government spending. If that's the argument, I would say that can never work because doing so (through big tax rate hikes) will kill the economy and the income growth will never occur anyway.

People point to Scandanavia for this argument, but Scandinavia is decades behind the US in income levels commensurate with people's educational levels (i.e. educated people in the US are much more prosperous, which thus allows money to the government to support a much more diverse population in the US that has created opportunity for immigrants from all over the world to an extent that Europe has not).

It's also worth noting that unfortunately tax rates in the US, federal and state combined, are now pretty much even with Scandinavia. I based this on the following example: A person who owns a business in California pays 42% in federal income tax including Obamacare taxes, about 13% in state income tax, 6% in Medicare and social security tax (fica, or whatever that's called, plus another 6% taken out of people's paychecks) , sales taxes and property taxes that are probably each around say 4% of income...which altogether comes to almost 70% of income. And when you factor in the giant costs from regulations (one sentence in a code somewhere added by a politician can cost a business an extra million dollars are year in a heartbeat), the government's take is already reaching Communist levels, which presumably would be in the 90% range.

I guess I'm rambling, but I would just add that to me the compassionate solution to providing more and more opportunity for all, about which I am passionate, is through a booming economy that allows people to get all kinds of job and promotion opportunities, and thus over several decades in the work force will allow most intensely hard working people to move up the ladder of opportunity and enjoy the fruits of their labor. Maybe not in their 20s and 30s, and definitely not if they drop out of school or the work force or have children out of wedlock etc...but for those who finish their education and spend several decades honing their skills and moving up the ladder in the work force, a booming economy over several decades should reward them handsomely, regardless of how modest their beginnings were.

[dsb62574]

Originally Posted by jwkilgore

[Off topic:]
I always thought the Palin/Wasilla/Russia thing was a media-hyped exaggeration; I never believed she thought she could literally see Russia from her house. I thought she had said "See Russia from my house" as hyperbole and that she wasn't trying to be literal. But it made for a good snarky insult to throw into a conversation, so I used it. Turns out I was wrong and the entire thing was a liberal lie. After a little research, I found that she actually said, "They're our next-door neighbors, and you can actually see Russia from land here in Alaska, from an island in Alaska", which is 100% true.

You were right, the "I can see Russia from my house" was a quote from a SNL parody skit and was never uttered by Palin.

I actually tried to rep you, but it wouldn't let me. I've rep'd you too much already.
[/Off Topic]

Just to be fully clear, I'm all for small government. The government needs to stay out of my church, out of my bedroom, off my property, out of my body, and away from my guns. Incidentally, this applies to other people's churches, bedrooms, properties, bodies, and guns as well, even people whose actions you may not agree with ("Eeeek! A black pot-smoking gay Muslim with a carry permit just moved in next door! 'Choot 'em!").

I'm not a total isolationist, but the USA is not the world's policeman.

Also, I'm not personally in love with the income tax system. I'd have no problems eliminating it as long as:
1) Priority programs remain fully funded (schools, infrastructure, transportation, law enforcement); and
2) The updated source of funding doesn't screw the middle class (i.e., most of the people reading this) anymore than it already does. The poor can't and don't pay much, and the rich don't need or deserve more tax breaks.

Yes, those who have benefited most from society owe the most to keep it running. The rich business owner didn't "build it without any help from the government", he built it with significant government help. Everything from being able to ship products over smooth roads and bridges, to not having to hire mercenaries to protect his products during shipping (the government-paid state police and US armed forces do that for him), to copyright protection on his business's name, to being able to hire employees educated by the public system who can read instructions and do basic math.

So yeah, if he has $1,000,000 in profit every year, he is benefiting significantly from society's protections and he owes a lot to keep it going. "In profit" means after all expenses, after tax-tree donations to retirement plans, after charitable donations, etc. How much do you earn after all those expenses are taken out of your paycheck? Should you pay the same (or a lower) tax rate as your boss?

While Palin didn't literally say, "I can see Russia from my house", she was using the proximity of Alaska and Russia to solidify her foreign policy experience. Living closer to a foreign country doesn't make you experienced in foreign policy. If it did, the states that border Canada and Mexico would be booming with policy master minds. It was still a very stupid thing to say, and it deserved the satire it received.

[Listener2307]

Originally Posted by dsb62574

While Palin didn't literally say, "I can see Russia from my house", she was using the proximity of Alaska and Russia to solidify her foreign policy experience. Living closer to a foreign country doesn't make you experienced in foreign policy. If it did, the states that border Canada and Mexico would be booming with policy master minds. It was still a very stupid thing to say, and it deserved the satire it received.

Nah.
She was responding to a question asked by Charles Gibson, who asked her what insight she gained by living so close to Russia.

I thought the question was stupider than the part of the answer that was parodied by Fey.

GIBSON: What insight into Russian actions, particularly in the last couple of weeks, does the proximity of the state give you?
PALIN: They're our next door neighbors and you can actually see Russia from land here in Alaska, from an island in Alaska.
GIBSON: What insight does that give you into what they're doing in Georgia?
PALIN: Well, I'm giving you that perspective of how small our world is and how important it is that we work with our allies to keep good relation with all of these countries, especially Russia.
We cannot repeat the Cold War. We are thankful that, under Reagan, we won the Cold War, without a shot fired, also. We've learned lessons from that in our relationship with Russia, previously the Soviet Union. We will not repeat a Cold War. We must have good relationship with our allies, pressuring, also, helping us to remind Russia that it's in their benefit, also, a mutually beneficial relationship for us all to be getting along.
GIBSON: Would you favor putting Georgia and Ukraine in NATO?
PALIN: Ukraine, definitely, yes. Yes, and Georgia.

Earlier in the interview, Gibson poo-poo'd her notion that the U.S. might become energy independent - an idea everyone now knows to be accurate.

[dsb62574]

Nah.
She was responding to a question asked by Charles Gibson, who asked her what insight she gained by living so close to Russia.

I thought the question was stupider than the part of the answer that was parodied by Fey.

Here is part of the actual Couric/Palin transcript:


COURIC: You've cited Alaska's proximity to Russia as part of your foreign policy experience. What did you mean by that?
PALIN: That Alaska has a very narrow maritime border between a foreign country, Russia, and on our other side, the land-- boundary that we have with-- Canada. It-- it's funny that a comment like that was-- kind of made to-- cari-- I don't know, you know? Reporters--
COURIC: Mock?
PALIN: Yeah, mocked, I guess that's the word, yeah.
COURIC: Explain to me why that enhances your foreign policy credentials.
PALIN: Well, it certainly does because our-- our next door neighbors are foreign countries. They're in the state that I am the executive of. And there in Russia--


This is the interview Fey made into satire on SNL. Like I wrote, her proximity to Russia was used as an example of foreign policy experience. If you need further confirmation, the video is still readily available on the Internet.