2012 May 18 |
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http://www.theatlanticright.com/2007/03/29/forbes-endorses-giuliani-giuliani-supports-flat-tax/
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Former mayor of New York City Rudy Giuliani gladly accepted Steve Forbes’ endorsement yesterday and “embraced Mr. Forbes’s signature issue, saying he liked the idea of a flat tax”, which is, as the NYT’s Richard Perez-Pena points out, “something Mr. Giuliani denounced when Mr. Forbes was running for president.”

If there were no federal income tax, “maybe I’d suggest not doing it at all, but if we were going to do it, a flat tax would make a lot of sense,” Mr. Giuliani, who is seeking the Republican presidential nomination, said yesterday, standing beside Mr. Forbes at the Nasdaq MarketSite in Times Square in New York. But he said it was not clear whether dissolving the current system, so ingrained in the economy, would be feasible.

Back in 1996, Giuliani said that implementing Forbes’ plan would be “a disaster” and “a mistake”. Seemingly, his opinion on this matter has evolved (something that’s happening to quite some politicians suddenly).

Giuliani is, obviously, socially not conservative enough, so that means that he has to score (conservative) points on fiscal issues.

As a conservative liberal, I support a flat tax as well. A “progressive” system is, in my opinion, not defendable. Those who say that those who have more should give more seemingly believe that those who have more should not just give more, but that they should give relatively more as well.

In the Netherlands we have the Social Party which wants to introduce an 80% tax for high incomes. 80%. Just think about that. Let that sink in for a while.

You’re working hard, sacrificing time you could also spend with your family, to do what you love doing and to earn money. Next the government comes in and takes away not ‘merely’ half of it, but 80%.

80.

50% is, in my opinion, too much already. This is the individual’s money, not that of the government / society. Some seem to have adopted this strange notion that one only keeps money one earns oneself by the grace of the government / the collective. In other words: you don’t have any right to complain, because the government could, if it wanted to, take (just about) everything. Instead of taking everything, it ‘limits’ itself to, say, half of it.

The reasoning described above is in breach with European liberalism and American conservatism.

And if the government needs the money, needs more than say 33%, well, I guess that means that the government is spending too much.

Cut spending, don’t raise taxes.

UPDATE
Talking about taxes:

House Democrats today will propose the largest tax hike in American history, one which will add more poor people to the tax rolls and which will further burden millions of small businesses. They will position this as fiscal discipline while refusing to trim federal spending…

Cut spending… raise taxes… cut spending… raise taxes.

Raise taxes it is.

  1. Posted by C Stanley
    | Quote | Trackback | Link #753
    C Stanley I think historically the US at one point had a top marginal income tax rate of 94%. I find that mindboggling. I'm not totally opposed to progressivity in taxation; I think there's some logic to say that up to a certain point, income is needed for the basics of life and after that it is for luxury and security, so that those who have more can afford to give not only more, but proportionally more. However, mainly that effect is at the low end and once you reach a certain point, the curve should become linear again. My view on that is not only due to morality of govt not having the right to punish people for being successful by confiscating their wealth, but also on a practical basis, people are going to make decisions to be less productive if they don't have enough incentive to work harder. Why work a lot more in order to gain just a few extra dollars and give the rest to the govt? I'm not that familiar with the Flat Tax proposal that Forbes favored but I think Guiliani's best bet would be to convene economic experts who put that plan together as well as those who formulated the Fair Tax plan (which is a national retail sales tax with rebates to make it progressive) and have the economists debate the merits of each plan. If we're going to propose a complete overhaul of our tax system, I'd want the best economic minds in the country to come together to endorse a plan and have the best chance of avoiding unintended negative consequences from such a major change.
  2. Posted by mvdg
    | Quote | Trackback | Link #754
    mvdg Of course, I agree C.S.
    I’m not totally opposed to progressivity in taxation; I think there’s some logic to say that up to a certain point, income is needed for the basics of life and after that it is for luxury and security, so that those who have more can afford to give not only more, but proportionally more. However, mainly that effect is at the low end and once you reach a certain point, the curve should become linear again. My view on that is not only due to morality of govt not having the right to punish people for being successful by confiscating their wealth, but also on a practical basis, people are going to make decisions to be less productive if they don’t have enough incentive to work harder.
    But, again, those people work for that luxury. Whether they 'need' the money or not is of no concern for the government. Even you seem, deep down inside, to adhere to the idea, to the notion, the idea, I described in my post: if people don't "need" the money, one might tax progressively. The foundation for such an argument is that the government / society is able to say what one should do with one's own money / whether one 'needs' what one has, and if not, the government can come in and take away. It's this attitude:
    Some seem to have adopted this strange notion that one only keeps money one earns oneself by the grace of the government / the collective. In other words: you don’t have any right to complain, because the government could, if it wanted to, take (just about) everything. Instead of taking everything, it ‘limits’ itself to, say, half of it.
    You haven't adopted that view completely, but you have adopted it partly I am afraid.
  3. Posted by C Stanley
    | Quote | Trackback | Link #755
    C Stanley But Michael, if you take your view completely, wouldn't you have to oppose the idea of taxation completely? I mean, I agree that it shouldn't be assumed that the govt has a right to take ANY of our income. But once we collectively agree to give that right over, to decide that we do feel there are some functions to be performed via public money that's accrued through taxaton, then I think the idea of progressivity becomes a completely separate issue to be determined by the voters/taxpayers. In other words, having already decided that we will allow the govt to lawfully collect money for public use, then we can also decide that we think it is more 'fair' to exempt those who don't yet have enough to feed/clothe/house themselves, or to levy a lower rate of taxation for those who barely have enough. I just don't see much difference in principle between that and having a rate at all, for example. In your view, why not do away with rates and have a flat fee per citizen? Isn't the idea of a rate (even a linear one) also that those who have (or earn) more can afford to pay more? The progressivity part is one more layer added on to that, but it's still the same concept, isn't it?
  4. Posted by mvdg
    | Quote | Trackback | Link #747
    mvdg I keep it short this time but: no - it's a matter, mostly, of emphasis. My reasoning doesn't mean that taxes should not exist at all, but is a guideline, a fundamental principle underlying tax policies one supports - taxes are, quite simply, necessary but... my point of view forces the government to limit taxes quite severely. In essence, my reasoning says "and if you're going to tax people, everybody should pay the same %" because that's limiting the 'damage' as much as possible.
  5. Posted by Dennis Sanders
    | Quote | Trackback | Link #746
    Dennis Sanders I used to be against the flat tax, but it's introduction in some of the former Eastern Bloc states has changed my mind. Collections are up in those countries. The problem with a progressive system is that those on the high end will find ways to not pay. For example, the lead singer of U2, Bono, has found ways to get out of some taxes in his native Ireland. I think that higher income people are okay with paying taxes. But they are like everyone else, they have money and don't want to give a huge chunk to the state. So a flat or flatter tax might help collect more money than what a progressive system does.
  6. Posted by C Stanley
    | Quote | Trackback | Link #745
    C Stanley Hmm, I'm not sure I get it. Is this your view (about limiting the damage) because you feel that the poorer people wouldn't allow as much taxation since they will be severely affected? If that's what you mean, I guess that might be true and I'll have to consider it. I can see how the Democrats have sold people on the notion that the rich can afford to pay more and therefore we should have more taxation rather than cutting spending. (That's their usual MO anyway, though I have to admit that the link to the House proposal shocked me, that they're now just going to boldly raise taxes even in a regressive way).
  7. Posted by Alan
    | Quote | Trackback | Link #744
    Alan Here in Illinois we have a flat 3% state tax. In order to raise more money our governor is suggesting that we add additional taxes to business. Economists disagree, saying that the problem with Illinois is that it depends too much upon property taxes and has a flat tax instead of a progressive one. So I'm not sure economists would agree with you on that. Also, I think it's important to realize that people's economic sucess often is made possible by the services government provides--education, infrastructure, etc., so I don't think it's unreasonable to ask for taxes, even progressive and fairly high ones, in return. But 80%? That seems excessive even to me. Although, during WWII the US did have that 94% tax bracket mentioned above. But I think there were various loopholes that greatly reduced this if money was being spent to support the war.
  8. Posted by mvdg
    | Quote | Trackback | Link #756
    mvdg
    So I’m not sure economists would agree with you on that.
    But my argument isn't purely economical. A "what's good for the economy reasoning" implies that, again, the individual is subjected to the economy, to the whole, to the society and that he only keeps some money by the grace of the government. My argument isn't whether or not it's good for the economy. The basis of my view is individualism. A "good for the economy" view is, in principle, based on collectivism.
  9. Posted by Interested
    | Quote | Trackback | Link #750
    Interested
    In the Netherlands we have the Social Party which wants to introduce an 80% tax for high incomes. 80%. Just think about that. Let that sink in for a while.
    I recall that the highest tax bracket was 75% when Reagan took office. The problem with a flat tax is it is unfairly burdensome on the poor. Depending on your income level, the poor pay little, to no taxes at all. Imposing say a 15% tax bracket would mean an insurmountable taxation level for that class. At the same time, the higher tax bracket would welcome the flat tax. Likewise the fair tax would also unfairly burdensome the poor and very poor. But it would most likely bring in more tax receipts on the upper class than a flat tax would. The really only fair method is a progressive tax one. IMO - the only argument is what level should those progressive tax levels be. I agree that the Dems have sold the public that you should punish the rich. After all, people love to think - why should I pay more - look they have all that money - make them pay. IMO, the "punish the rich idea" is equal to being Anti-Capitalist Society.
  10. Posted by C Stanley
    | Quote | Trackback | Link #752
    C Stanley
    Likewise the fair tax would also unfairly burdensome the poor and very poor. But it would most likely bring in more tax receipts on the upper class than a flat tax would.
    Not really; the Fair Tax is more progressive because it would give each citizen rebates up to a certain amount which corresponded to basic living expenses. So, it really acts more like a luxury tax with the rich paying a much bigger share (and by taxing spending rather than income, you put the incentives/disincentives where they should be).
  11. Posted by Interested
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    Interested once you apply rebates, it is making it a progressive tax.
  12. Posted by Alan
    | Quote | Trackback | Link #748
    Alan "My argument isn’t whether or not it’s good for the economy. The basis of my view is individualism" Then it's more a question of economic liberalism vs. libertarianism, and I think we come down on different sides.
  13. Posted by Mikef
    | Quote | Trackback | Link #749
    Mikef I think you're arguing two different points here. How much should we pay in taxes and should there be different tax brackets. U.S. Federal income taxes max out at 35% (after deductions). This is a far cry from the 75%, 80% and 94% the rest of you are citing. A flat tax set at 25% (the current middle class level) wouldn't fund the government at current levels. That means most of us would end up paying more in taxes, or that government services, military and social spending would have to be cut. And of course most flat tax proposals (like Forbe's) are in fact two bracket systems. One for the poorest (0%) and another for everyone else. This makes the transition from poor to middle class potentially very expensive. I'm also assuming you don't want a "flat" Social Security tax, in which the wealthiest people pay the same percentage as the rest of us (currently people only pay the tax on the first $100,000 of income).
  14. Posted by Mikef
    | Quote | Trackback | Link #743
    Mikef
    House Democrats today will propose the largest tax hike in American history
    So the biggest spenders in U.S. history are going to start complaining now that the bill has come due? You do realize that we ultimately have to pay back all the money we've borrowed, right? With interest? Fiscal conservatism used to mean you didn't spend more than you earned. Now it means you spend like the world is going to end tomorrow. I'll take the pay-go policy of the Democrats over the Republican habit of mortgaging the country for their pet projects any day. It's much cheaper in the long run.
  15. Posted by Interested
    | Quote | Trackback | Link #757
    Interested Boy where to begin
    Fiscal conservatism used to mean you didn’t spend more than you earned. Now it means you spend like the world is going to end tomorrow.
    More Taxes more tax receipts
    I’ll take the pay-go policy of the Democrats over the Republican habit of mortgaging the country for their pet projects any day.
    Pay-go is nothing more than Tax and Spend with a prettier name on it. Much like "Progressive" label vs "Liberal" label. Slap a prettier name on it, maybe it can sell better.
  16. Posted by Interested
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    Interested hmm the more taxes line got blockquoted some how. Anyway More Taxes - does not equal - more tax receipts.
  17. Posted by Mikef
    | Quote | Trackback | Link #759
    Mikef
    Pay-go is nothing more than Tax and Spend with a prettier name on it.
    If the taxes match the spending, it's still a better deal than pretending that the money is free. As long as politicians can run the credit card, they'll spend exorbitantly. They only start to think about priorities when they're forced to find ways to pay for their programs. People complain about tax hikes. They typically don't realize just how much more it costs to run deficits. We pay over $300 billion a year just making interest payments on the debt. That alone would more than pay for the Iraq war.
  18. Posted by domajot
    | Quote | Trackback | Link #760
    domajot I agree with Mike that the debti can't be ignored. So, what some call 'tax and spend' is actually 'tax and pay off your debts'. The trick is finding the level of taxation that doesn't discourage business growth. There is considerable disagreement among economists about the best way to prpcede in our situation of huge national debt and trade imbalance. Re income taxes, I see MVDG's point about not robbing the rich, so to speak. At the same time, the income disparity drowth is unhealthy for society. I think a good deal of that is due to investment income. Low income people have their salaries and that's all; there is no spare money to invest. Others can get ahead exponentially by investing excess income. The more they make, the more they can make, and the rate of growth increases with every step up the latter. What I don't see is a clear boundary between what is fair and what is necessary to avoid creating a permanent and stagnant class system. I've yet to hear an apolitical economist explain that quandary.
  19. Posted by C Stanley
    | Quote | Trackback | Link #761
    C Stanley
    The trick is finding the level of taxation that doesn’t discourage business growth.
    Which is mainly why I question the type of tax increases that are being proposed here; why add tax burden to small businesses that typically operate on a thin margin? I have to say that I think some combination of tax increases or rollbacks of the tax cuts are necessary because of the deficit spending. And I know there are partisan Republicans who will stir up resentment to the tax increases, and that's not really fair because they were the ones who ran up the deficit because they didn't constrain spending. Still, I think that Congress should address spending first, and then determine the best tax policy to meet the needs without discouraging economic growth.
  20. Posted by domajot
    | Quote | Trackback | Link #762
    domajot Reducing spending on domestic programs (entitlements) is going to be a tough nut to crack and it will take months, if not years, to find a formulg to suit all sides. In the meantime, the national debt has been ignored for years One way to save on spenging is to reduce the amount of interest we pay on the debt. I think the tax issue is very directly related, not only in terms of the budget, but in terms of the changing dynamic between sectors of society. It's harmful to lose the notion of an upwardly mobile society. I'm waiting for apolitical economists to join the discussion in Washington.
  21. Posted by Interested
    | Quote | Trackback | Link #763
    Interested
    If the taxes match the spending, it’s still a better deal than pretending that the money is free.
    Actually no it isn't. There is no direct equation between increasing of taxes and an increase of tax receipts. Tax & Spend (or Pay-Go) will result in ever expanding tax increases, just a little more here, a little more there, some extra here, more there. All little increases meant to slide in under the radar political-wise. Before you know it, your Tax burden is overally high and unnecessary.
    As long as politicians can run the credit card, they’ll spend exorbitantly. They only start to think about priorities when they’re forced to find ways to pay for their programs.
    That's the real problem, the answer is not tax increases. To put it into every day terms. Say you get a $5,000 a year increase in pay. Yet you spend $8,000. What's the solution - find an additional $3,000 pay increase? A tax increase is money from you and me. Another dollar or two out of my pocket, more change reduced from your paycheck. When we elect people, we expect them to spend our money in a wise manner. It is not their money, it is our money. And while the Republicans shoulder the vast majority of the blame for the rampant spending in recent years. The Democrats are not without blame either. For a party that showed itself to be incredibly good at utilizing minority rules to delay, prohibit or otherwise make the majorities life difficult. They certainly went along gleefully in the spending spree. A little watch on C-Span would have seen some Democrats complaining on the floor over the (much much much too late) attempts to reign in spending. So you do, you make the hard choices. You look at the past years budgets where there were all those entitlements. And you start cutting. This is where the Politicans can suck it up and do what they should have been doing years ago.
  22. Posted by Interested
    | Quote | Trackback | Link #764
    Interested Not to mention, the higher the tax rates go, the less the rate of expansion amongst new businesses forming or expansion of existing businesses. In addition, it is a less rate of savings and a lesser rate of investments.
  23. Posted by mvdg
    | Quote | Trackback | Link #765
    mvdg Interested: as Barry Goldwater wrote, whenever you 'get' something from the government, it's actually your own money that's coming back minus the brokerfee.
  24. Posted by Interested
    | Quote | Trackback | Link #766
    Interested lol, And therein lies the argument. While it's certainly beneficial for everyone for a decent road infrastruture in say - California (no matter if you live in Maine) What does the citizens get in return for a bridge to nowhere. Even trips to the moon produce benefits the economy benefits from as a whole. Heck wars do too for that matter. Argument lies within the difference between pork and necessary spending.