Saturday, August 20, 2011
Wednesday, August 10, 2011
The Supercommittee: Jockeying
So there is jockeying around who is to be appointed to the deficit reduction committee (Republicans and Democrats begin Jockeying Anew in Next Phase of Budget Fight. New York Times, August 4, 2011: A1, A14).
We know that many Republican legislators have taken Grover Norquist's No Tax Increase pledge. This should automatically disqualify them from serving on the supercommittee.
For the sake of the Nation, I would hope that all members of the Committee would sign a pledge that between now and the end of November they will not meet with, talk with, read e-mails and text messages from, or receive legislative suggestions from lobbyists.
Sent to New York Times
We know that many Republican legislators have taken Grover Norquist's No Tax Increase pledge. This should automatically disqualify them from serving on the supercommittee.
For the sake of the Nation, I would hope that all members of the Committee would sign a pledge that between now and the end of November they will not meet with, talk with, read e-mails and text messages from, or receive legislative suggestions from lobbyists.
Sent to New York Times
Saturday, August 6, 2011
The Debt Deal
The time has come for the business owners and managers of America to stand up and prove that the "confidence fairy" skeptics like Paul Krugman are wrong. In his latest column, Professor Krugman says "Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record." The President Surrenders. New York Times, August 1, 2011).
We all know that at present we are still on a continuing downward spiral. As the economy fails to improve -- microscopic increases in GNP and employment -- there is little consumer demand therefore firms are unwilling to hire new employees or take back those that have been laid off.
The economic cycle is however under our joint control. If, despite the lack of current demand, the businesses of America took a risk and started hiring, the income earned by these employees would trickle into the market and would result in increased demand. That would halt the downward spiral and soon result in the cycle reversing into an upward spiral of increased demand, increased employment, and rising GDP.
I can think of no better cause for the right to embrace than to "prove" the Keynesians wrong and that their model of improving confidence would result in improved economic performance.
How about it American business? It is time to hire.
Sent to New York Times
We all know that at present we are still on a continuing downward spiral. As the economy fails to improve -- microscopic increases in GNP and employment -- there is little consumer demand therefore firms are unwilling to hire new employees or take back those that have been laid off.
The economic cycle is however under our joint control. If, despite the lack of current demand, the businesses of America took a risk and started hiring, the income earned by these employees would trickle into the market and would result in increased demand. That would halt the downward spiral and soon result in the cycle reversing into an upward spiral of increased demand, increased employment, and rising GDP.
I can think of no better cause for the right to embrace than to "prove" the Keynesians wrong and that their model of improving confidence would result in improved economic performance.
How about it American business? It is time to hire.
Sent to New York Times
Monday, August 1, 2011
Leaders' Wives in NH.
I read with interest your piece about the Presidential and Vice-Presidential spouses visiting the homecoming of NH National Guard troops in Concord NH (Leaders’ wives urge support for military families, Boston Globe, July 25, 2011).
Then I wondered why one of them was not at the MA National Guard homecoming yesterday at the armory on Concord Avenue in Cambridge.
Then I remembered: NH is politically competitive, MA is not.
Sent to Boston Globe
Then I wondered why one of them was not at the MA National Guard homecoming yesterday at the armory on Concord Avenue in Cambridge.
Then I remembered: NH is politically competitive, MA is not.
Sent to Boston Globe
Monday, July 25, 2011
Amazon Takes On California
Why do we have to deal with the internet sales tax problem in a piecemeal, state by state fashion (Amazon takes on California, New York Times, July 14, 2011: B1, B4)?
The Federal Government needs to invoke the inter-state commerce clause and require that retailers collect sales tax for all purchases that are incurred over the internet. Then brick and mortar retailers will not be disadvantaged relative to internet retailers.
And how does Amazon even think that failing to collect sales tax is a socially responsible act. They are just increasing the costs for the rest of us.
Sent to New York Times
The Federal Government needs to invoke the inter-state commerce clause and require that retailers collect sales tax for all purchases that are incurred over the internet. Then brick and mortar retailers will not be disadvantaged relative to internet retailers.
And how does Amazon even think that failing to collect sales tax is a socially responsible act. They are just increasing the costs for the rest of us.
Sent to New York Times
Read My Lips: No New Taxes
Mr. Norquist is eloquent in telling us that spending is out of control (Read My Lips: No New Taxes, New York Times, July 222, 20111: A19). However he does not tell us where to make those cuts. Even Tea Party members want to bring the pork home to their states (Cost Cutters, Except When the Spending Is Back Home. New York Times, July 19, 2011)..
He also loses credibility in his crusade when he argues against reducing tax loopholes because he defines them as "tax increases." I, for one, would define removing loopholes as "spending cuts." It has the same effect on the deficit whether a dollar is sent in the mail to a social security beneficiary or whether it is deducted from the taxable income of an oil company.
It is the big subsidies to agro-business (corn, sugar), to hedge-fund managers, and to the oil companies that we need to cut, not the welfare of the inhabitants of Main Stree.
Sent to New York Times
He also loses credibility in his crusade when he argues against reducing tax loopholes because he defines them as "tax increases." I, for one, would define removing loopholes as "spending cuts." It has the same effect on the deficit whether a dollar is sent in the mail to a social security beneficiary or whether it is deducted from the taxable income of an oil company.
It is the big subsidies to agro-business (corn, sugar), to hedge-fund managers, and to the oil companies that we need to cut, not the welfare of the inhabitants of Main Stree.
Sent to New York Times
Thursday, July 14, 2011
Stagnant wages = foregone income taxes
Providence Journal, June 2011
This is no longer on the Providence Journal website. Here it is.
“Starving the Beast:” Let me Count the Ways.
Martin G. Evans
Since the 1980's Republican politicians have used every opportunity to cut tax rates in order to “starve the beast” and reduce government spending. There is, of course, strong evidence that, despite the Laffer curve, a low tax regime has resulted in lower revenues. However, tax rate reductions may not be the primary cause. At the same time that Republican politicians were cutting tax rates, corporate America disengaged the link between productivity and employee wages so that over the past twenty years, all the benefits of increased industrial productivity have gone to the top 5% of those receiving incomes with the income of the lowest 95% stagnating in real terms.
For the lowest quartile, income (in 2009 dollars) increased about 21%; for the top 5% it increased by 68%. If all income earners had experienced the same percentage increases as the top 5%, their incomes would have show dramatic increases: $11,000 for the lowest quartile, $22,000 for the second quartile, $32,000 for the third quartile, and almost $46,000 for the top quartile. Such increases in real terms would have enabled most families to avoid large debts while maintaining their previous lifestyle.
More importantly, the impact on tax revenues would have been dramatic. With such increases, some would have been promoted to a higher marginal tax rate and most would have increased taxable income. This would result in increased revenue for government As a result, the extra contribution to the Federal Government in 2009 from income taxes would have been over $100 billion dollars.
Enough to pay 2/3 of the costs of the wars in Iraq and Afghanistan in that year.. More than enough to pay for preschool for all 3 and 4 year olds. Enough to rebuild much of the road and rail infrastructure over ten years. Or enough to provide tax cuts for all.
Stagnation in wages as well as leaving individuals unable to continue a middle class lifestyle without going into debt has also starved government of the tax revenue needed for its vital expenses (war, education, or even tax cuts).
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