Friday, June 19, 2009

Taxes and Promises, Part II

I'm sorry, but the notion of an intellectually honest conversation about politics is nice, but in order to have such both sides must first be able to concede to some sort of baseline. I already conceded that it is a broken promise. I then said why I don't think that matters even a tiny little bit (to me). The other side has got to concede that political campaign promises are not absolutes. They are a necessity to get elected, then say why this promise really matters.

We basically force politicians to make ludicrous promises or we won't vote for them, but that is crap. Those promises are an "as things stand here and now, I would like to..." type things, they are not contractual oaths.

I do not think that absolutism in terms of this discussion (is he breaking a promise or not?) is intellectually honest. The inability to recognize either a changing environment or the political necessity of such promises precludes one from being able to enter into a fully honest discussion about the present.

Taxes are necessary, and not evil, but people don't like them, so it is NOT POSSIBLE to get elected by saying "You bet I'm gonna raise your taxes." I recognize that conceding that point makes discussion about whether he is breaking a campaign promise more an abstract than anything meaningful, but if you are not going to concede it, then the subsequent discussion is not going to be intellectually honest.

More, I don't really give a damn about his promises. I do give a damn about what he does and whether it is best for the country, the world, and to a lesser extent for me. Some of those things may go back to promises and I will certainly use that in argument, as are you.

If you want to talk about the issues, fine, but if you want to split hairs on the meaning of campaign promises, that discussion doesn't hold much value to me. Obama is already going against them in ways I find more offensive than taxes. I want the photos released, gitmo detainees properly tried and either convicted and sentenced or released (I don't really care much if the base closes), I want real, meaningful financial reform and regulation, I want equal rights for everyone (gay marriage), and I want meaningful energy/environmental legislation. Those things are way more important to me than whether my taxes actually go up or down or stay the same, but the question to ask (in a world that I could actually ask the president something) would not be "How dare you? but "Why are you?" A satisfactory answer could mitigate my objection.

Now, to the other things. Capital gains are an income source, so taxes on them are income taxes (they are not, technically wage taxes). Payroll taxes are also taxes on income. No, they are not part of 1040 filing, but if you pay higher taxes by earning more money (up to 90 whatever k), it is a tax on income, and splitting hairs on income vs. wage vs. payroll vs. cap gains is kind of silly to me, and the "any taxes" following a bunch of income type taxes? Seems to me he meant other income type taxes, but if he didn't? Don't care. Not a meaningful discussion to me.

For passed down tax costs (like cap and trade making energy more expensive for us), you can't only look at that side of the pass down, and it is not possible to fully figure all the ramifications. I don't like cigarette taxes, but if they go up and people smoke less and quit more, and resultant expensive hospital bills are substantially reduced then it may be a net gain: slightly higher taxes but far more freed revenue. Same thing with cap and trade or other environmental regulatory taxation. If energy costs go up, but I get better mass transit, or reduced traffic resulting in my spending less time, and gas, and money on transportation to and from work, then the higher taxes may be coming back in a fairly direct way, never minding any secondary effects (actual environmental improvement, or at least mitigation of the long term negative effects). If you are going to pass on tax costs to higher energy, then you also have to try and pass it on to potential savings...that really isn't possible, which is why it will always seem cheaper and more profitable to slash and burn.

Really, though, taxes in general have become nothing more than a right wing bogyman; we had astronomically higher taxes in the 50's and did pretty well for ourselves, though I wouldn't advocate for going back to a 90% top rate. The government needs money for defense and education and infrastructure, and it seems for bailing out the "free market." It gets that money from taxes (unless the population votes for politicians who cut taxes too much, in which case it borrows the money from China). Taxes will absolutely have to go up unless we decide collectively that defense spending can be dramatically cut and health care can be dramatically reformed. Those are the social security and welfare along with any other government program that can be named that people don't like, are like ants to a whale. I have zero hope for substantial defense cuts and diminishing hopes for real health care reform, so taxes will need to go up at some point.

5 comments:

Michael L. Heien said...

Jacob,

A lot of stuff to comment on, this will be difficult to organize.

First, yes, the fact that a politician breaks promises is not too surprising. This is not a "gotcha" moment; every politician does it. What I am saying is: the promise was ridiculous in the first place. It wasn't feasible at the time it was made. It's not like this wasn't a big deal; I got ~20 fliers from Obama last year about this in the mail. I don't think it would have made a difference in the election.

I will also say yes, all those specific listed taxes are taxes on different forms of income.

I get it's not that important to you; it's important to me, which is why I am writing about it. Taxes are not inherently evil; only an anarchist would want no taxes, but they are not inherently good either; a 100% tax rate would be called serfdom (or something worse).

Right now, I do not want to pay higher taxes. Why is this? It's about trust. I don't trust Congress to do what is in our best interest. Bailouts to everyone? Neverending corporate welfare? Handouts to special interest groups? A stimulus package that doesn't seem to be stimulating? These are what my taxes are going towards?

Throw in the fact that the elite (Tim "turbo tax" Geitner, TOm Dachelle, and other Cabinet nominees) don't pay their taxes, and yea, I get upset. It's a trust issue.

More later.

Jacob said...

Ok, that's fine, but what is the solution? Or even what is the appropriate response? We vote for 1 president, 1 US rep and 2 Senators. We need infrastructure, education, research funding, defense, and to not have the entire economy of the country we live in or the world beyond to revert to the feudal stage.

There are 98 other Senators and 434 other US reps, many of whom will be elected by portions of the population that you and/or I disagree with on a larger scale, so from a practical standpoint what is the response?

Obama shouldn't have made those promises (despite the fact that we have shown a decided desire to vote for tax cutting pols and that he was still being hammered on as a tax raising liberal dem)? It was a big issue because voters, by and large, do NOT vote based on fully informed and understood issues.

You can be upset that Obama is breaking promises (possibly), I'm pretty happy to have a president with ideas, who thinks and who operates based on the reality of the situations (including politicing). I don't like that reality, but I wouldn't run for president either.

Michael L. Heien said...

Jacob,

Two quick points, any individual will never agree with everything their goverenment spends money on, but right now I feel more agrieved then I have in my (short) adult life.

As far as the solution: we should have the government we deserve (take that the cynical way). Practical response: speak out, and make your point clear. I have tried to make mine, that's the best I can do.

But I think you make some good points, couched in your response I see an admissions: 1. Obama is a politician (not a "transformative figure") who is not much different from politicians before him (in regards to promises, although the question of degree is always there). Obama is a political genius, that much is clear. A lot of his supporters seem to think he is more, though.

On a more personal note (not directed at you). I want an apology from everyone who was at dinner with me once last fall. At dinner, I was castigated for the sheer notion that I may not vote for Obama. I was hit with: "don't you know he is going to lower your taxes?" "He's going to lower taxes for 95% of Americans, you should vote for your own self interest, McCain won't do that for you, etc...." (it was assumed that was what I cared most about, my libertarian outlook being known - side note: it's not). I didn't believe it then, and I don't now. If it turns out to be true, I will gladly admit my error for not trusting him. My problem may not be so much with him making the promise (although I want him to be truthful) but more the ferver with which his supporters push this on me for being "brave" enough to question his statements; he is a politician.

Michael L. Heien said...

Jacob,

A note on passed down costs, it can work the other way too. The best thing you could do (to cost the system less) is die of a heart attack at 58. I am sure someone has done a study, but smokers may cost the system less. They die younger, removing long-term care costs. As you say it's difficult to know.

As far as Cap and Trade, to work it has to make energy more expensive, that is how it works. Without making energy more expensive alternative energies have a harder time competing. It's hard to see how it can lead to "savings" for an average individual. If infrastructure is made better, and people ride busses instead of driving, that seems to be a personal decision. One motivating factor for using mass transit vs. a car is cost (traffic being another). Not everyone lives in a city where MT can work. Overall, I don't think anyone is making the arguement that cap and trade will save an average american money (even with these factors). I would like to see the numbers if they are there. But dynamic analysis is hard.

Jacob said...

Michael,

They have done the smoking study, the cost from the nature of their deadly ailments more than offsets the "not living longer" issue. http://www.consumeraffairs.com/news04/2007/11/tobacco_cost.html

Really all medical costs tend to be piled at the end of life, no matter how long one lives. Some chronic problems do persist for years, and some treatment has made those lives longer and more costly, but really, the low cost of early death is the same as saying how little it costs us if no one goes for treatment. That's more "health not giving a damn"

Oh, I also wanted to take issue with the 100% taxes thing: apples are not good because if that is the only thing a person consumes they will be very malnourished, and probably die, so the thing about keeping the doctor away is really not true.