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Nope, not joking--I think my phrase appropriately captures the mental habits of people who insist on believing certain things despite evidence demonstrating the contrary, particularly when they take those false beliefs to extremes. So, for example, a person insisting we are on the verge of "communism" via government expansion, and then dismissing the actual facts about declining government consumption and related tax burdens as a "couple graphs" because they contradict that extreme claim, might as well be a person insisting black is white.
But to bring this back on topic: regardless of what you want to call it, when you take that kind of fact-resistant, extremist opposition to any sort of measure that would increase revenues for any purpose, and combine that with the fact that infrastructure spending actually is a relatively low public priority and has relatively few strong defenders, you end up with the current infrastructure spending crisis. And I am not sure how to solve that problem, other than hoping and waiting for saner political conditions.
Well, first of all, you are putting quite a few words in my mouth. I never said that we were on the verge of communism. I said there was a ceiling to tax percentage increases, and it was communism. I never said we were near that ceiling, but I don't think we should remain on a steady course towards it either.
Political arguments are never black and white. They are always based on an individuals (more or less educated) guess of what will happen in the event that their shangri-la of government gets implemented (which of course never will). Statistics lie to prove any point and every side of an argument has an endless list of "but"s and "if"s.
But, to argue your points..
To me, the average tax burden is irrelevant. The tax burden among distinct groups of individuals is much more important (like, those who actually pay taxes, for instance).
So, I'll point out that the lower class who is paying little or no taxes is increasing while the tax burden gets increasingly shifter to the middle class means that "taxes are increasing", meanwhile creating a voting majority who will continue to push the tax burden on an increasingly shrinking group of people. This is not sustainable.
Again putting words in my mouth, I simply said that most people felt infrastructure was a key financial responsibility of government. The link you posted links to a white house study showing 84% of people agree with investing money in infrastructure. The opposing report, based on a sample from only 5 states, simply indicates that people find education and health care to be more important than infrastructure spending due to the current economic conditions... it doesn't mean they don't find it important! Your link goes on to say that only 22% of people want to cut infrastructure to make up deficits, and then tells how this voting is based on the false assumption of most people that infrastructure spending makes up a much larger % of spending than it does. This is also assuming that everyone believse infrastructure improvements are a direct correlation of increased spending on infrastructure, when the report linked from your infrastructure site indicates a very large lack of faith in government to deliver what they promise. It ignores the people who believe they are getting little or nothing for their dollar (if you ordered from a website and your product never showed up, would you order again?).
Of course, all of this assumes that this single report contains a representative sample - I am sure I could find some report saying the exact opposite if I looked hard enough.
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Except you are seeing things that are not there. In recent decades, total government consumption has been trending down, not up. Similarly, non-payroll taxes have been trending down, not up.
I don't know what you are trying to argue about here. This was exactly my point. Tax burden on middle class has trended up and government consumption has declined... people are getting less for their money (this is assuming government consumption actually produces something). I don't want new taxes - I want the money I am already paying to stop being handed out and instead be used to build something! How is that so hard to understand?
I said there was a ceiling to tax percentage increases, and it was communism. I never said we were near that ceiling, but I don't think we should remain on a steady course towards it either.
But why do you keep insisting we have been "on a steady course towards it"? That just isn't true--the overall trend in recent decades has been AWAY from "it", where "it" would be defined as U.S. governments consuming/taxing at a 100% total rate.
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Political arguments are never black and white.
Before we get to a political argument, we need to get the facts straight. Again, let's start with the fact that in recent decades, the overall trend has been toward relatively smaller government consumption/taxation.
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Statistics lie to prove any point and every side of an argument has an endless list of "but"s and "if"s.
This is just an excuse for refusing to consider that something you believe may be demonstrably false.
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To me, the average tax burden is irrelevant.
I haven't presented an average, which doesn't even necessarily make sense since we tax different entities. I am using numbers for all taxes, which includes corporate and excise taxes.
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So, I'll point out that the lower class who is paying little or no taxes is increasing while the tax burden gets increasingly shifter to the middle class . . . .
First, people in the "lower classes" typically pay a lot of taxes, sometimes a higher overall percentage of their income than people in the "upper classes". The typical talking point I suspect you are echoing is that people with low incomes may pay little or no federal income tax, but that is only one form of tax.
Second, to the extent there has been a tax-shift to the middle class, it has been from above: higher-income/higher-wealth people have obtained marginal tax cuts on their income and capital gains, and people with little or no income/gains at those marginal rates and higher consumption levels--the middle class and below--have had to take on a higher overall tax share as a result.
Your own link contains this chart nicely demonstrating that point:
That is only federal taxes and only personal so doesn't give a complete picture. But the upshot is that the increase in middle-class federal tax rates was driven by the massive decline in federal tax rates among the top earners. The relatively small decline in federal tax rates among the bottom earners can't explain that shift, both because the magnitude of their contribution is too small, and because most of their share is payroll taxes anyway, and the reason that component has gone down is relative wage stagnation at the bottom.
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the report linked from your infrastructure site indicates a very large lack of faith in government to deliver what they promise. It ignores the people who believe they are getting little or nothing for their dollar (if you ordered from a website and your product never showed up, would you order again?).
The overall point of that discussion is that people say they like infrastructure in the abstract, but then don't view it as a priority in the particular. The result has been a systematic real defunding of infrastructure as revenues fail to keep up with basic costs--and then people complain about their infrastructure not being in great shape!
That is like NOT ordering something from a website, then complaining that your product never showed up, and using that as an excuse for never ordering from that website.
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Tax burden on middle class has trended up and government consumption has declined... people are getting less for their money
I'm not sure your premise about tax burdens is true, if you added up all levels of government. In any event, if true that would be an argument for restructuring our tax system to relieve some of the burden on the middle class--but any such attempt to change the tax system will, once again, be greeted with cries of "communism!"
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I don't want new taxes - I want the money I am already paying to stop being handed out and instead be used to build something! How is that so hard to understand?
What is hard to understand is how you propose getting there from here.
People instituted infrastructure-specific taxes like the gas tax (and tolls, and fees, and so on) precisely to give infrastructure a guaranteed source of funding that couldn't be easily diverted to other purposes. But once we got into the habit of freezing such taxes (and tolls and fees and such) at nominal levels and in general opposing "increasing" them, it meant infrastructure spending would increasingly rely on general tax revenues instead. And general tax revenues can be directed to other purposes, which they have been, and now we have an infrastructure crisis.
So when you say, "no new taxes, just spend the money better!"--well, that's a nice idea in the abstract, except we now know that plan hasn't been working, and it turns out that the original plan of dedicated infrastructure revenues isn't dispensable.
But to restore that system of dedicate infrastructure revenues, we would need to--gasp!--raise some existing infrastructure taxes/tolls/fees. But that's the road to communism, so we do . . . nothing.
So is my frustration over this really so hard for YOU to understand? Phasing out dedicated infrastructure spending has led to a crisis. But every single attempt to address that crisis is met with generic anti-tax opposition. So nothing gets done, and the crisis just gets worse.
I only ever referenced tax PERCENTAGE increases and never said anything about the gas tax.
The exact same generic road-to-communism arguments you have used here have been offered in opposition to things as simple as indexing the gas tax to inflation.
Please understand that for me, none of this is personal, meaning none of this is about you specifically. I am pointing out a real dynamic going on in the real world: every single possible measure that would raise additional revenues for infrastructure has been opposed as a tax increase.
By the way, a few more of the dreaded charts and facts. All this is federal, so it isn't giving a complete picture. But it will help shed some light on the tax burden shift.
First, relative tax burdens by type of tax:
Moderator cut: link removed, linking to competitor sites is not allowed
As you can see, the income tax goes up and down, but stays within a relatively tight overall range. What has happened in broad outline is that payroll taxes ("social insurance" in this chart) have gone up, while corporate and excise ("misc.") taxes have gone down. Now the incidence of corporate taxes (who ultimately pays them) is a bit complex, but suffice it to say that the net effect of shifting from corporate taxes to payroll taxes is to increase the taxation of labor and decrease the taxation of capital.
Why is this so relevant to the middle class? Well, here is a little article on the whole "people who don't pay taxes" meme:
It’s not just poor families for whom the payroll tax is a big deal, either. About three-quarters of all American households pay more in payroll taxes, which go toward Medicare and Social Security, than in income taxes.
Focusing on the statistical middle class — the middle 20 percent of households, as ranked by income — underlines this point. Households in this group made $35,400 to $52,100 in 2006, the last year for which the Congressional Budget Office has released data. . . .
Taking into account both taxes and tax credits, the average household in this group paid a total income tax rate of just 3 percent. A good number of people, in fact, paid no net income taxes. . . .
But the picture starts to change when you look not just at income taxes but at all taxes. This average household would have paid 0.8 percent of its income in corporate taxes (through the stocks it owned), 0.9 percent in gas and other federal excise taxes, and 9.5 percent in payroll taxes. Add these up, and the family’s total federal tax rate was 14.2 percent.
So keeping income taxes level roughly but shifting corporate taxes to the payroll tax is a large part of why the overall federal tax rate of the middle part of the income distribution has increased.
Again, I wouldn't be opposed to discussing tax reforms designed to address all this. But these effects haven't been driven by government consumption, and they haven't been driven by tax cuts for the poor. They have been driven by changing the relative shares of different kinds of federal taxes, and by reducing marginal rates on top of that.
But why do you keep insisting we have been "on a steady course towards it"? That just isn't true--the overall trend in recent decades has been AWAY from "it", where "it" would be defined as U.S. governments consuming/taxing at a 100% total rate.
Before we get to a political argument, we need to get the facts straight. Again, let's start with the fact that in recent decades, the overall trend has been toward relatively smaller government consumption/taxation.
How can you make such a statement? The charts which you presented omit stimulus payments and the increasing transfer spending, and also include a number of estimated values. The comments section is filled with a number of valid rebuttals.
And does the US debt to GDP ratio which has trended upwards for the past 100 years not indicate to you that we are spending more than we can afford to?
I don't see any valid reason for omitting transfer payments, or stimulus or other deferred debts, where it comes to examining the amount of the government spending. I also don't think looking at the current tax rate means anything - they are obviously lower than we can afford for them to be perpetually with the level of spending we are at. To combat that, you can decrease spending, increase taxes, or both.
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Originally Posted by BrianTH
This is just an excuse for refusing to consider that something you believe may be demonstrably false.
When you base your argument on assumptions, you can demonstrate anything you want, and it is difficult to escape assumptions when presenting such a complex machine on a single graph.
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I haven't presented an average, which doesn't even necessarily make sense since we tax different entities. I am using numbers for all taxes, which includes corporate and excise taxes.
Your 30% claim was meant to insinuate that people are paying the same taxes as they always have, and have no reason to complain, when the reality is that fewer (relative to population) are responsible for maintaining that 30%.
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I'm not sure your premise about tax burdens is true, if you added up all levels of government. In any event, if true that would be an argument for restructuring our tax system to relieve some of the burden on the middle class--but any such attempt to change the tax system will, once again, be greeted with cries of "communism!"
You are making an assumption and generalization of behavior. I would like to see a graph proving this.
Seriously though, yes, it is difficult to determine the total tax burden (income, payroll, investment, etc. etc.) of any individual based on such broad generalizations - rich people are paying a variety of non-income taxes (and finding a variety of ways to escape them), poor people are paying higher percentage of payroll taxes, yet are presumably receiving greater benefit from social programs, middle class can be defined by income percentage or standard of living which is difficult to quantify, etc. Things aren't very black and white, and yet, it is difficult to ignore the fact that 47% of individuals now owe no federal income tax, and a shrinking amount of individuals are expected to compensate.
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What is hard to understand is how you propose getting there from here.
pull the damn plug, man.
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So when you say, "no new taxes, just spend the money better!"--well, that's a nice idea in the abstract, except we now know that plan hasn't been working, and it turns out that the original plan of dedicated infrastructure revenues isn't dispensable.
So what do you propose? you are admitting proportioning existing taxes to infrastructure isn't working, so why do you think paying more will change that? Unfortunately it isn't too anyone's immediate political advantage to change things for the better, when the voting majority is the beneficiary of an unsustainable system. I don't see why you think striving to do good is wrong and "screw it, let's just spend more and let our children pay for it" is right?
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But to restore that system of dedicate infrastructure revenues, we would need to--gasp!--raise some existing infrastructure taxes/tolls/fees. But that's the road to communism, so we do . . . nothing.
We can first improve efficiency of infrastructure development, re-appoint existing tax revenue to infrastructure, etc.
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So is my frustration over this really so hard for YOU to understand? Phasing out dedicated infrastructure spending has led to a crisis. But every single attempt to address that crisis is met with generic anti-tax opposition. So nothing gets done, and the crisis just gets worse.
I never said this. I have no problem with taxing for infrastructure development. Didn't I say I thought it was a key responsibility of govt? I have a problem with singling out one person to pay for everyone else's infrastructure. Pay-as-you-go or wage taxes are both far preferred by me to property taxes and pay-for-someone-else-as-you-go. I also dislike increasing taxes to pay for something that could be covered by efficiency improvements. If I was the dictator of PA, I would merge municipalities, merge school districts, eliminate many state and county thumb twiddler positions, and use the efficiency savings for infrastructure development. I wouldn't mind a usage-specific infrastructure tax, and I'd even look past a wage tax increase if I knew it would result in better infrastructure (which I have no faith that it would). Poor infrastructure is probably the main thing I believe is holding Pittsburgh and PA back.
I do think total tax revenue in PA for the state and its enclosed municipalities are generally low and the state should increase revenue in fair ways instead of trying to sneak it in (ticketing south side residents who can't find anywhere to park!), but they really need to get their house in order from an efficiency standpoint or it will just be money poured down the drain. That doesn't mean I think a percentage increase should be an annual event!
I think this conversation has suffered from lack of specific topic of debate My beliefs on Federal and State govt don't fit into the same generalization.
Again, I wouldn't be opposed to discussing tax reforms designed to address all this. But these effects haven't been driven by government consumption, and they haven't been driven by tax cuts for the poor. They have been driven by changing the relative shares of different kinds of federal taxes, and by reducing marginal rates on top of that.
I didn't say that "the poor" have received tax cuts, I said "the poor" as a class have grown, pushing an increasing percentage of the voting population to require benefit of unsustainable spending programs.
.. And income does not equal wealth. Debt, cost of living, ability to save, etc are all factors in determining an individual's wealth.
You didn't link or cite anything as of my writing this--I just see the excerpt.
oops
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Originally Posted by BrianTH
I'm also not sure what point you are trying to make. Use whatever rational measure of economic activity you want (and I'd happily agree that GDP is not an ideal measure for many purposes)--government consumption and related government taxation as a percentage of economic activity have been in an overall declining trend for the last few decades, and we certainly aren't approaching "communism" in terms of those levels.
I'm saying you're chart doesn't actually prove anything since it uses misleading, manipulated data that inflates GDP as noted above. perhaps you would liek to remake your point with some other "rational" data. GDP itself is irrelevant to communism vs capitalist. taxation is but one form of redistribution...you also have to include debt (future taxation) and inflation (backdoor tax). government spending is included in GDP. whether we are approaching communism or not would be better seen as proportion of GDP or ownership of assets. I'm not arguing we are, we're still very much a mixed economy...besides communism is out of favor for elements of socialism and fascism. you also have to account for backend costs. if the cost of my product is raise from $10 to $12 because of federal regulation, it will show up in private GDP, but is still a cost of government (some regulations are good, some bad, and everything in between). the issue, quite simply, is quite complicated.
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Originally Posted by BrianTH
I would entirely agree, for example, that we are expending way too many resources on military adventures, and not nearly enough resources on infrastructure. THAT is the discussion we should be having.
while that's certainly true, you can't ignore that GDP has been artificially inflated through both government and consumer borrowing. If I buy a car with a zero % loan care of uncle sam, it adds to GDP, but it's being subtracted from future GDP. thus the ratio is artificially depressed today, but will subsequently rise tomorrow..ceteris paribus.
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Originally Posted by BrianTH
Instead, we can't seem to get past the "If the gas tax keeps pace with inflation, we will become COMMUNISTS!" level of discourse. So nothing changes.
perhaps that's because people see that money is being spent, just on the wrong things. If you give me $20 for food, and I spend it on beer, then demand another $20 for food, you'd probably be skeptical..and that's essentially what's happened. I'd also argue that the decades long killing of the savings rate has put us in a position where money, both privately and publicly, is squandered, leaving us heavily in debt. in any equation, you need to account for debt (If I take home $1k a month, but pay $500/mo in debt payments, my take home is 50% less...you may blame me, and certainly I should not have responded with short term interests to government interest rate manipulation, but it will still leave me feeling the pinch of the 20% tax on my $1k a month as a 40% tax...and in effect, it is a tax, as uncle sam needed me to spend to make things look better). I'd agree, though, that the political debate is poisoned. both sides lie, cheat, and steal while giving as little back as possible.
I didn't say that "the poor" have received tax cuts, I said "the poor" as a class have grown, pushing an increasing percentage of the voting population to require benefit of unsustainable spending programs.
.. And income does not equal wealth. Debt, cost of living, ability to save, etc are all factors in determining an individual's wealth.
that's also the problem with averages. If jim in ohio has tripled his debt (including a car loan, mortgage worth more than his house, and school loans) while his income has stayed around $50, he feels poorer...but that may be offset if Ben over on Wall street or K street has doubled his income to $400k either through speculative asset bubble income or increased lobbying work, it may overshadow that in the average. ..and explain some dissatisfaction despite "good numbers."
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