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Thursday, October 27, 2016

Taxation is always at the very center of Washington’s economic debate, but is it a distraction from bigger issues? In his amusing and informative new book We Are Better Than This: How Government Should Spend Our Money, Edward D. Kleinbard argues that progressives ought to focus on wise spending instead of higher taxes – and fight for changes that can actually address economic inequality.

You can purchase the book here.

A Nation Of Jerks?

Let me ask you a question: What do you believe our government is good for?

I can almost hear the chortling—the nearly irresistible urge to answer my question with a hearty “Nothing!” and then to turn back to one’s private pursuits. But I ask that you consider for a moment the possibility that the answer is not quite this obvious, and that in fact government—which is to say, all of us, acting collectively—can make our country healthier, wealthier, and happier, if we put government to useful work in those areas where it most productively complements our private markets.

That is what this book sets out to demonstrate. Its purpose is to encourage readers to resist the gravitational pull that naturally tugs us in the direction of becoming what one recent opinion piece termed a nation of “jerks.” That short article summarized research suggesting that the fraction of Americans who believed that government should guarantee each person enough to eat and a roof over her head fell by 10 percentage points over the five-year period since the onset of the Great Recession, declining to fewer than three out of five Americans in 2012. It would be nice if this disenchantment with government were a consequence of government’s displacement by nationwide movements that actually funded and operated community-organized food banks and shelters sufficient to the national task, but the data contradict this convenient claim. Millions of American citizens are hungrier today than they were in 2007, and the reason is simply that those of us who are not acutely hungry are more anxious about ourselves and our own economic security.

As I write this in late 2013, our economy still underperforms for most Americans. As a result, this personal economic anxiety is understandable. But We Are Better Than This shows that the path forward to a better economic environment for all of us lies through more government involvement, not less. When we starve government of resources, it turns out that we largely are starving our own long-term prosperity.

We are inundated today by economic noise and fog designed to generate superficially plausible rationales for what at bottom are simply jerk-like instincts. You see this machinery at work, for example, when you read editorials making the “leveling down” argument: you cannot make the poor rich, the writer sadly notes, by making the rich poorer—there’s just not enough money to go around to do that. In your naïve ambition to level up the poor, you will only succeed in leveling down the rich. The regrettable slaughter of the goose that laid the golden eggs is sometimes invoked. The writer then typically draws from this purported iron law of economics the conclusion that, since the rich cannot shoulder the whole burden, why ask them to do anything at all?

We Are Better Than This refutes these and similar exercises in false economic syllogisms. The book demonstrates that we effectively leave long-term prosperity and happiness off the table through our current penchant for minimalist government. And it makes the economic case for a more muscular federal government that complements the private sector through sensible investment and insurance programs.

In making the economic case for government investment and social insurance functions that work with, not against, the private sector, We Are Better Than This shows that we can afford to pay for government to take on a larger role, and that our semi-annual budget emergencies are largely false fiscal crises. It calls for somewhat higher federal income tax rates than those in force in 2013 (except at the top!), but not materially higher than those in 1999, when the economy was humming. There is nothing terribly radical in the book’s programmatic aims (except perhaps in its fundamental business tax reform suggestions, all the way at the end of the book). I am not a closet Trotskyite. I am, in fact, a friend to business—in a Dutch uncle sort of way.

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Along the way, the book marshals a great deal of evidence, and assists readers in becoming much more sophisticated consumers of claims regarding tax and budget policy. The reader who makes it all the way to the end may well not agree with me at every turn, but he or she will be a better informed citizen, and much less likely to be a fiscal jerk.

Taxing And Spending, Or Spending And Taxing?

As the actor Edmund Kean lay on his deathbed, a tactless friend inquired whether dying was difficult. “No,” Kean replied, “Dying is easy; comedy is hard.”

And so it is with fiscal policy—that is to say, the art of government spending and taxing. Households find it difficult to earn money and easy to spend it. But for governments, taxing—the side of fiscal policy that seems so difficult and abstruse from the outside—turns out to be relatively easy as a technical matter; it is the policy underlying government spending that is maddeningly difficult.

This conclusion is something of an embarrassment to me, as I have spent 35  years meditating on federal tax matters, as a practitioner, government official, and academic, but it nonetheless is true. Colbert—not contemporary pundit Stephen, but rather Jean Baptiste Colbert, finance minister to King Louis XIV of France—explained the essence of tax policy neatly 350 years ago: “The art of taxation,” he wrote, “consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” All of contemporary tax policy analysis is just an elaboration.

Since the time of Colbert, we have learned a great deal about how to pluck the goose as quietly as possible. Public finance economists (the subspecies who study the effects of tax and government spending policies) now have a reasonably clear idea of which tax policies lead to the fewest squawks, in terms of unintended economic consequences. Government spending, on the other hand, is completely different. There are no generally agreed-upon technical solutions to the question, what is the proper role of government? This question, it turns out, ultimately does not even reside solely in the domain of economics (although many economists resist this). Instead, the issue implicates questions of moral and political philosophy with which thinkers since Aristotle have wrestled.

So all of our technical knowledge on the economic side effects of taxation cannot resolve the fundamental fiscal issue that dominates contemporary political discourse, which is how much tax revenue our technical expertise should be harnessed to collect in the first place. But in turn, government taxing and spending are completely bound to one another, so that policies in respect of one side cannot be developed without considering the other.

The famous economist Milton Friedman summed things up with the maxim, “to spend is to tax.” That is, every decision by government to spend money necessarily requires an offsetting commitment to raise the revenues to pay for that spending. Friedman’s aphorism is as close to a Newtonian law as economics gets.

Of course, government has a few choices of how to relate taxing to spending, some of which are more disreputable than others. Its honorable choices are to tax now to pay for current spending, or to issue bonds (IOUs) today, and collect taxes tomorrow (or the day after tomorrow) to repay those borrowings. Government’s seedier options include borrowing today and then relying on inflation to minimize the tax burden tomorrow, but that is just a way of saying that inflation itself is a hidden and pernicious sort of taxation, in this case on lenders. And finally government can amaze the world by borrowing today and defaulting tomorrow, but this tactic turns out to be so cataclysmic in its implications that only a modern Nero would contemplate it.

Tax policy is the handmaiden, and spending policy the sovereign:  we need to decide on what projects to embark collectively through the intermediation of government before we can design a tax system to meet those needs. Our greatest public finance policy mistake over the last few decades has been to obsess over tax policy, while simultaneously failing to have serious and rational debates over spending policy. We quibble over tactics without really engaging in the more difficult enterprise of forging a national consensus on our strategic objectives.

And therefore this book, which in its embryonic form was an explanation of the tax policy choices that confront us as a nation, necessarily has evolved into a more discursive inquiry into what we fairly should ask our government to do by way of spending our money. It is also a confession by a longtime tax geek that I, like many others, have elevated the tactical issues of tax system design beyond their ultimate importance to our society. Instead of arguing about tax rates or even levels of tax revenues in the abstract, we must focus instead on the real question, which is what we think our government is good for.

If you enjoyed this excerpt, purchase the full book here.

Reprinted from We Are Better Than This: How Government Should Spend Our Money by Edward D. Kleinbard with permission from Oxford University Press USA, © Edward D. Kleinbard, 2015.

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  • Independent1

    Anyone who would answer nothing, to the first question in this article is devoid of common sense and totally delusional. Saying that our government is “worth nothing” is akin to saying that the CEO and board of every major corporation in the world is worth nothing. And although we can deride them for the absurd money many of them make, anyone who can’t see that they serve an absolutely necessary purpose within a company is a total idiot!!

    Without the CEO and board of a large corporation, it would only be a short time before the company would collapse like a house of cards with all the infighting that would go on between departments of the company with one manager after another thinking it was his or her department that was the most important and should therefore be deciding the company’s direction. The same thing would happen in America, or any country in the world without a strong government. All anyone who doesn’t believe that has to do is look at Somalia and a number of of countries in Africa and other places in the world with very weak or non existent governments.

    Similarly, without government playing a major role in the operations of our economy, it would only be a short time before it would come to a grinding halt. It’s been only about 90 years since an American president proved that for us, when Herbert Hoover and his failed GOP advisors came up with the misguided notion that it was the private sector who could get the American economy humming again after the stock market collapse of 1929 and refused to apply any kind of stimulus to actually start an economic recovery process. Most of us on this blog are well aware of what the failed GOP policies of that decade ended up doing – creating a world-wide depression that took over 10 years for America and the world to recover from.

    I’ve asked this question before and as yet no one has been able to come up with a solution, so I’ll ask them one more time of those who think that our government is good for nothing:

    How does anyone who believes that our government is worth nothing, think that the private sector would be able to spur the economy once it has started in the downward spiral of a recession???

    a) Would all private sector companies get together and decide to give their employees a pay raise to inject more money into the economy to increase spending again and kick start the economy?

    b) Would all private sector companies get together and decide to run sales so Americans with less cash on hand could spur the economy by buying more items with money they don’t have?

    c) Would all private sector companies get together and pool all the monies they’ve squirreled away over seas so then could send out checks to all Americans in hopes that they’d use that money to buy more goods to spur the economy?

    d) Would all private sector companies get together and offer to cover their employees portions of Social Security to free up monies for their employees so they would have more cash available to spend buying things?

    e) Would they do all of the above?

    f) If not, exactly what could or would private sector companies EVER DO in order to kick start an economy that is in the tail spin of a recession?? Or for that matter, to keep an economy even running without eventually falling into a depression??

    Let’s hear the answer to that one from all those who think that our government is not good for anything and that the Stimulus and Auto Bailout that Obama went forward with was a wasted effort when the vast majority of economists in America agree that Obama following through with his stimulus and auto bailout is the only thing that kept America and the world from falling into the GOP’s 2nd created world-wide depression.

    And keep this in mind too – looking back into history since the Big Depression, the only times the American economy has done well is when tax rates on income and capital gains were higher than they are today, because it encouraged the wealthy and corporations to pull monies they had squirreled away in investments, and used them for creating more jobs by using their monies to expand existing companies or start new ones.

  • davidcayjohnston

    Ed Kleinbard’s book is a masterpiece of moral philosophy and tax policy, as I wrote in my review to it for Tax Analysts, the nonprofit and non advertising publisher of Tax Notes magazine.

    Anyone seriously interested in both tax policy and government spending would do well to read this book, by a tax lawyer who for decades was a savvy designer of tax avoidance strategies on Wall Street and for the last few years has been explaining to people in plain English the realities of our tax system, which in operation has little to do with popular belief or what our politicians in both parties say.

    The first 266 pages lay a solid foundation for the next 150 pages, which show smarter ways to tax that will ease the pain of supporting government, be fairer and end many of the hidden subsidies that regulars here know I have spent the last two decades exposing in my own work.

    • Independent1

      David, unfortunately, it will take a monumental change in the mindset of the GOP, or voting them out of office, in order to go forward with any sensible changes to America’s convoluted tax code. The GOP seems absolutely determined to keep pumping unneeded monies into the pockets of the already wealthy and corporations that not only don’t need it but have in no way earned it.

  • bikejedi

    Its real simple .. You cannot legislate or regulate outcomes . It has never worked anywhere in History .. You can work to maximize opportunity for all , and before all of this Socialism , we had the best system for that ever seen on this globe . It was a Representative Republic combined with Free Market Capitalism that brought the greatest opportunity and prospperity for the greatest number of people ..It also made us the most prosperous Nation ever seen on this globe . Socialist Policy has never succeeded anywhere over time .It is very very simple …..It deincentivizes production and therefore it always implodes . Under Obama and the Dems we have seem the greatest jump in income disparity in History .. The answer is simple dont vote for Socialists or those who espouse those theories … See , Maybe I should write a book

    • mah101

      Just to be clear: 1) We don’t now have, nor have we ever had, a viable socialist policy in the US; 2) Socialism succeeds quite nicely, ask Canada, Sweden, Norway, Denmark – you know, those countries doing well economically, whose students outperform ours, whose people live longer, and who in general are happier; 3) the cause of our income disparity is directly related to deregulation, spending, and tax policies of Republican administrations particularly starting with Reagan.

      These are simple facts that you can look up. They may not fit with your ideologically driven hyperbole, but then again, you just might be wrong.

      • bikejedi

        We are moving towards Socialism here and Liberal indoctrinator are trying to brainwash College kids that this is just jiffy . Canada isn’t Socialist and Sweden Norway and Denmark are hybrids that will fail over time . They also dont worry about defending their own countries and have no real defense budget because they just rely on the U S and NATO to protect them if and when the Shit hits the fan . Their populations are small and they aren’t encouraged to be lazy and be on the dole . they dont have a Political party over there trying to make people purposefully dependent . they have a Society that isnt used to being lazy and where being on the dole is shameful … Here in America we have plenty of Lazy people who take advantage of the system and Liberals are trying to make that Socially acceptable …Those Scandanavian Countries will see in time what happens with Socialist policy .. And wasn’t Reagan’s economy great ? After he got his agenda passed America was really huming along with opportunity for all … How many of us wouldnt want that economy now .. We had way fewer poor people way fewer on Tax Payer hand outs .. Most were working and becoming more and more upwardly mobile … It was a great time to be an American

        • mah101

          Your point about socialism is simply drivel. Buzzwords like “lazy” and “on the dole” are objectively not at work here, and your comment about the size of the population is ridiculous – smaller is better when you need to pay for social services and programs? Really?

          And Reagan’s economy? That was running “great” because he ran up the deficits to pay military contractors for his massive buildup to outspend the USSR. Even Reagan realized he had to raise taxes, as did GHW Bush after him. We still carry the debt of those years today, and the tax and regulatory framework put in by Reagan have directly caused many of the economic problems we face today.

          • bikejedi

            No my point about Socialism isn’t drivel but it sounds like you might not like to confront things that are true…… if they make you feel uncomfortable or go against your own dogma
            As it is sometimes hard to get the intent of typed words I have to ask what is it you mean when you said the terms ” Lazy “and ” on the dole ” are objectively not at work here ? Because that sounds like you are uncomfortable with those terms so you don’t want them used .
            As for the Size and make up of a population it does matter . In a smaller Country that is more one ethnicity….. those Country’s tend to be more nationalistic in nature than a bigger more diverse population . It is easier to hide the flaws of Socialism when that Society has morals and ethics that would frown upon people being on the dole . In those Societies it isn’t Socially acceptable to be on the dole just because you want to be and can …In our Country you have ONE party preaching dependency just for a voting majority and they try to make it Socially acceptable to be on the dole … See all the new people we have made dependent in the last 5 years .. and at a rate never seen before in History … Cloward Piven indeed …
            As for Reagan … real simple who’s economy would you rather be living in … This or his ? That is a slam dunk if you were alive then … And don’t muddy this up with a Liberal re write of history .. It was the advances under Reagan that fueled the tech boom that fueled the e business boom the internet boom etc … a lot of that ( Isolinear chip design for example etc ) can be directly traced to the investment in SDI ( as well as our new Laser weapons we enjoy today ) Clinton was the beneficiary of most of that and of course he had Newt Gingrich writing Budget policy … Please dont try that re write of history as I lived through that ,,,

          • mah101

            Your knowledge of socialism is woefully inadequate and more than a bit influenced by your bias.

            And Reagan, really? The man and his ideologically driven trickle down economics was a disaster for our nation. You ask whose economy would I rather live under, but I would ask you whose bills you would like to leave to your children? And don’t bluster me with all that “I lived through it” stuff. So did I and I recognized it then for the disaster it was. Don’t fool yourself: I never voted for Reagan, and if he were to run today neither would you.

          • bikejedi

            Why is it that people who think they know so much will tell you that you don’t know so much without being able to elaborate their reasons for thinking you don’t know so much … It seems by that omission that it isn’t I who is woefully informed but you .. Not to mention anything of YOUR OWN Bias … What I have never understood about Liberal Socialists is why if you love Socialism so much why don’t you all teach us a lesson and move your happy asses to one of those countries rather then try to ruin our Country ? You all brag about how wonderful Sweden is so why don’t you move there . See I win my case right there …
            The next thing you display is total ignorance of economics and the effects of policies . Reagans spending on tech is paying dividends for our economy and National Security today and will continue to do so .. His debt as compared to GDP is miniscule as compared with the economics ala Community Organizer and the spending Obama is doing will only help Unions and not the country … Your kids will get the bill for it as well as an ever increasing tax bill burden to income ratio .. I mean someone is going to have to pay for all those food stamp people and Illegal aliens right

          • mah101

            Well you see, its because I’m not a socialist, I don’t even know any politically active socialists, and I’m not even a democrat. So to imply that I’m a Liberal Socialist is prima facia false.

            And the reason we who disagree with you don’t go running off to another country is because we are Americans, you friggin moron. This is our country, and we want to see it grow, prosper and live up to its ideals.

            And I’m hardly ignorant of economics, since my one of my doctoral specialties is political economy.

            Now I’m done talking with you. I’m busy and have far more important things to do tonight.

          • joe schmo

            How arrogant can you get. I didn’t realize that we had an obvious class distinction in this Country. It used to be quite prevalent in Europe ….and as long as we are on the subject, what would you call yourself? Let me guess…a Progressive? That’s as close to Communism as you can get. Should I enlighten you? ‘Bike’ has every right to suggest moving to another Country (I would suggest North Korea) because you no longer understand what ‘America’ is. You have totally taken it to the curb and kicked it down the road only to be run over by a Mack truck.

            By the way, you are not dealing with some dumb schumck? I enjoyed economics in college and, if I hadn’t been talented in another area, I would most likely have studied finance of some kind. We all have gifts of some type. That doesn’t mean you have to demean another human being for stating his peace.

            Next time you respond, it would be much nicer if you didnt take your ‘stress filled’ demeanor out on someone who does not think the same way you do. You preach tolerance? ‘CoExist’ my Ass.

            Keep it up idiot, you are the reason why this Country is so divided.

          • mah101

            You have some issues, Joe. You sure like to project your fears, but unfortunately your anger blinds you to the real positions that others have while you force them into your little boxes of hate.

            Now, if you’d like to engage in a real conversation, I’m all ears. Until then, bye.

          • bikejedi

            Well I am glad that you arent a Socialist but you seem to be backing that policy so you can understand my confusion .. That is why I mentioned that people who think like that should just move to one of those Countries they adore so much.

            I saw you other comment as well and understand when things get heated …

            As for your doctoral specialities … I deal with PHD’s everyday ( most from the U of C Poly Sci Dept ) While they are educated and I admire their tenacity in gaining their PHD’s most of them are not very well informed on current events . I have a close friend who is a Co Worker and has a PHD in Poly Sci … Published Author…. and considered one of the leading experts in the World on International Policy . He is woefully under informed on current events however because he ONLY listens to NPR . He was unaware of Fast and Furious for months for instance all the while telling me everyday how NPR is the best and most comprehensive news source out there … He didn’t know about Solyndra for a month after the story broke as well . So I guess I’m just not impressed by that . I am impressed with fact logic and reality

          • mah101

            Bike, my apologies for the tone in my response. I’m normally not this sharp in my responses but I’m in the middle of a very stressful task and haven’t slept for days.

            My positions on your misunderstanding of socialism and on the economic legacy of Reaganomics remain unchanged, but I’ll look forward to a more civil conversation with you about it in the future.

            Good night.

          • joe schmo

            Well… knowledge of socialist is seeped in experience and yours is naive at best.

            Of course you would not vote for Reagan today. He is too much of a Nationalist and you are purely a Commy. News for you, I would vote for Reagan today without even blinking an eye. We need a STRONG leader who knows how to handle the international community as well as the many problems we now face at home.

          • joe schmo

            bikejedi….take a gander at ‘Pravda’ in English. Putin is a nationalist and 83% of the people love him. He is trying to keep globalism OUT!…..and we are welcoming it with open arms. I really don’t want to have the UN or NATO breathing down our necks….

          • bikejedi

            Yes .. I agree now watch the Liberals go batty trying to say we love Putin . I appreciate the Putin loves his Country and does everything he can to help his Country . I admire that Unlike Obama he isn’t just worried about his own political party and legacy but his Country . I admire that unlike Obama he is a strong leader

          • joe schmo

            Yes….Socialism spurs less incentive and innovation. Communist Russia was a good example…. I was over there as a child. I saw the lack of progress with my own eyes….

            This makes me wonder if American’s just want to do less? At the moment, seems that’s the sentiment of the Nation.

        • joe schmo

          A great time to be ‘PROUD’ of who we were… You are so right:)

          • bikejedi

            Even Liberals if they are honest with themselves ( and I wonder whether they can differentiate that ) would tell you that

      • joe schmo

        1) What planet do you reside on. It’s mainly because you do not understand Socialism. My parents came from Europe and I have plenty of relatives there. For some reason you Liberals now want a European style America. News for you…. isn’t what you think it is.. Besides your style of progressivism is more like Communism. Sorry, my Dad escaped from it and that is what he says America is becoming. I can assure you, he hates the regime.
        2) You don’t even know what Socialism s like so how would you know if you would even like it Not as great as you think it is and you have less freedom.
        3) People in this country are just beginning to understand eating correctly. I’ve known this since I was a child. My parents were into health foods when that sort of eating was not cool. People need to make that call. It is not up to us to be the Food police.
        4) People are happier? Not really….I have been in Europe enough to know that people are often, arrogant and unfriendly. No the happiest and friendliest on earth up to this point is the good ole USA.
        5) The cause of our income disparity is not directly related to deregulation, spending and tax policies. Not starting with Reagan…..I’d predict from Clinton forward. Who are the big spenders? (Libs) Who are the over taxers? (Libs) Lower taxes would help or even a flat tax. Who are the kings of ‘uber’ regulations? (Libs) Let’s get rid of the IRS, let’s lower the taxes, lets lower business regulations. Who are the over zealous environmental police? (Libs) Mind you I am all for clean air and water but your initiatives are insane. Why not use Texas as an example:) Success all the way around. Texas should be the poster child for America not California or New York.

        Good try….I don’t even need to look much of this up. Rack it up to experience…..

    • 788eddie

      bikejedi, What on earth are you talking about?
      You most certainly can legislate outcomes. The Bush tax cuts, as well as new state voter restrictions are absolute examples of this!

      Tax cut favoring wealthy =redistribution of wealth in an upward manner.

      Voter restrictions affecting mostly those on the lower end of the economic spectrum (who are less likely to own cars which would enable them to drive to far away registration centers) = less lower end people being able to vote.

      For gosh sake, wake up!

      • bikejedi

        I can see a little bit of a point on the Bush Tax Cuts but that ended up helping the economy as a whole through investment . I have no idea what you are getting at with that voter restriction thing . Who is restricting anyone from voting . By the way lots of people in rural areas have to drive great distances to vote … We could use a National Voter I D law and according to two recent polls done by Liberals Americans favor that by margin of 72% in one and 80% in another .. And before you say it disenfranchises poor people keep in mind that even in most 3rd World Countries they do this and that most poor people already have I D’s or they wouldn’t qualify for food stamps . By the way , I was referring more to espousing Socialist theory which has failed everywhere over time and our former system that created the most wealth and the most opportunity for the greatest number and percentage of our people or any people ever .

        • joe schmo

          In case you haven’t noticed, voting restrictions seem to be one of the Liberals biggest mantras. For some reason they just don’t think Voter I.D. is fair? Doesn’t make sense does it?

          • Independent1

            Yes, and any moron with at least half a brain can see why (since you have less than 1/2 a brain that lets you out).

            There’s several reasons why judge after judge has ruled the ‘you have to have a specific state voter ID’ nonsense passed in many Red States UNCONSTITUTIONAL.

            Requiring a specific voter id, is nothing more than equivalent to a ‘POLL TAX’. Whether they’re free or not, what the state requires to get one, can cost millions of people lots of money. Most states require a form of birth certificate or document which proves U.S. citizenship that millions upon millions of Americans never received when they were born; and which to get now could cost them big bucks. So requiring that voters have to show this nonsense ID is no different than the Poll Tax that was tried during the Jim Crow days.

            And given that REPUBLICANS HAVE NEVER BEEN ABLE TO SHOW THAT VOTER FRAUD IS ENOUGH OF A PROBLEM TO REQUIRE SUCH AN ID; it’s clear that they have only one reason to create the legislation requiring a specific voter ID – SUPPRESSION OF ALL PEOPLE WHO MAY VOTE DEMOCRATIC !!!!!!!!

          • bikejedi

            There are Obviously Liberals who recognize the need for Voter I D as two polls done by Liberals show that 72% in one and 80% in the other want a National Voter I D .. When you couple those polls with the rampant voter fraud and the number of Dems under investigation for vote fraud you can see the need . That becomes even more apparent when you factor that Obama didnt win a single State that requires Voter I D

        • Independent1

          Sorry, but tax cuts NEVER HELP THE ECONOMY beyond possibly a short term kickstart. Tax cuts create long-term retraction of the economy (which was proven by the 8 years under Bush being the most lackluster economy in the previous 7 decades), because the wealthy and corporations pull back from expanding their businesses and entrepreneurs slow down in creating new businesses. Because when tax rates are cut, more money can be made by simply squirreling ones money in offshore investments than putting into expanding an existing business or starting a new one. History has shown that the American economy does better when tax rates are high, especially on capital gains, because it creates an incentive for people to invest in what will increase their incomes via business returns rather than capital gains (like what’s going on today where businesses are sitting on trillions of dollars in overseas and other investments because of the low capital gains tax rate they can make more from those investments than from income due to business profits).

    • Independent1

      Wow!! You get more mentally delusional with every idiotic post you make!!

      If Republican governance is so great, why does every Red State fail miserably in virtually every socio/economic measure you can come up with except for the idiotic principle of trying to balance a government budget or creating tax scenarios that favor the wealthy and dump the responsibility for running their state on the poorer folks that are unfortunate enough to live there and on the federal government??

      If GOP governance is so great, please spend a little time and explain away all these drastically poor statistics which not only show that GOP run states lead the nation in every form of violence including all forms of homicide but even infant mortality from birth!!

      Let’s hear you explain away all these awful statistics that prove categorically that GOP governance is nothing but a total DISASTER!!!

      9 of the 10 states with the most gun related violence are
      Red States

      § States with most Gun Violence per 100,000 – 2012:

      § Homicides/Assaults/Violent Crime

      § LA-9.53/99.51/555.3
      § AK-4.22/80.47/606.5
      § AL-5.92/40.50/420.1
      § AZ-4.24/57.36/405.9
      § MS-6.91/51.69/269.8
      § NM-3.69/87.26/567.5
      § MO-5.59/88.90/447.4
      § GA-4.57/58.64/373.2
      § AR-4.53/100.56/480.9

      14 of the 15 states with the highest rates of gun ownership are GOP-RUN STATES


      7 of the 10 most violent states are red states

      Violent Crimes per 100,000 Population – 2012


      23 of the 25 states with the highest auto fatality rates are Red States. Here’s a list of the 1st 10:

      Auto Fatalities per One Million Miles Driven – 2010


      -11 of the 12 states that have the highest infant mortality rates in the nation are GOP-RUN STATES? With Mississippi having the
      highest infant mortality followed by Louisiana, Alabama, Tennessee, Arkansas, S. Carolina, Delaware, North Carolina, Georgia, Oklahoma, Indiana & Ohio.

      -20 of the 24 states that have more than 12% of their population struggling with incomes below the poverty level (the states that
      need the most welfare assistance) are GOP-RUN STATES. The only Blue States in the top 23 are California, New Mexico, and New York. While for 2013, the 8 states with the highest average incomes, including the 3 with the highest minimum wage standard, are all Blue States.

      – 15 of the 20 states with the highest average rates of homicide over the past 5 years are GOP-RUN STATES. With Louisiana being by far the murder capital of America followed by Mississippi, New Mexico, Maryland, South Carolina, Alabama, Arizona, Michigan, Missouri, Tennessee, Georgia, Illinois, Arkansas, Oklahoma, N. Carolina, Nevada and Florida.

      -18 of the 20 states with the highest firearms mortality rates are GOP-RUN STATES; with Louisiana leading the nation in firearms mortality followed by Wyoming, Alabama, Montana, Mississippi, Arkansas, Nevada, Tennessee, Alaska, New Mexico, Oklahoma, S. Carolina, W. Virginia, Missouri, Arizona, Kentucky, Georgia, Idaho, Florida and N. Carolina

      -9 of the 12 states with 6 or more public servants per 10,000 public employees convicted of corruption are GOP-RUN STATES: led by Louisiana with 10.5, Kentucky – 8.5; S. Dakota – 7.5, Delaware – 7.2; Mississippi – 7.1; Alabama – 7.1; Pennsylvania –
      7.1; N. Dakota – 6.9; New Jersey; 6.7; Montana – 6.5; Ohio – 6.3 and Tennessee – 6.0.

      -12 of the 15 states that get back the most federal aid for the tax dollars they send to Washington are GOP-RUN STATES; And all 10 that get more than $1.75 back for each $1 they send to Washington in tax revenues are red states. Of the 17 states that get back less tax dollars in federal aid than they send to
      Washington in tax revenues, ONLY 3 OF THEM ARE GOP RUN STATES. All 10 of the states that get the least federal aid for the taxes they pay (less than .75/$1) are BLUE STATES. All this implies that it’s 14 Democrat-run states that are supporting the nation, because the 3 GOP-governed states get back between 96-99 cents/$1 of taxes so they’re not doing very much to support America.

      8 of the 10 most corrupt states are GOP-Run states: Mississippi,
      Louisiana, Tennessee, Illinois, Pennsylvania, Alabama, Alaska, South Dakota, Kentucky and Florida.

      9 of the 10 most miserable cities in America are in Red States:
      Huntington/Ashland, WVA, Charleston, WVA, Redding, CA, Spartansburg, SC, Hickory–Lenoir-Morganton, NC, Beaumont/Port Arthur, TX. Columbus, GA/AL, Shreveport/Bossier City, LA, Mobile, AL, Evansville, In/KY.

      All 10 of America’s poorest cities are in Red States: Brownsville-Harlingen, Texas, Dalton, Ga., McAllen-Edinburg-Mission, Texas, Gadsden, Ala., Lake Havasu City-Kingman, Ariz., Albany, Ga., Monroe, La., Cumberland.W.Va., Fort Smith, Ark.-Okla,
      Pine Bluff, Ark;

      While 9 of the 10 richest cities are in Blue States: San Jose-Sunnyvale-Santa Clara, Calif., Washington-Arlington-Alexandria, D.C.-Va.-Md.,Bridgeport-Stamford-Norwalk, Conn., San
      Francisco-Oakland-Fremont, Calif., Boston-Cambridge-Quincy, Mass.-N.H. ,Oxnard-Thousand Oaks-Ventura, Calif., Anchorage, Alaska, Honolulu, Hawaii, Manchester-Nashua, N.H., Napa, Calif.

      All 10 of America’s most miserable states, those with the least
      “well-being factor” for their residents are GOP-Run states with the worst being West Virginia and then: Kentucky, Mississippi, Alabama, Ohio, Arkansas, Tennessee, Missouri, Oklahoma and last but not least – Louisiana.

      -More than 75% of food stamp recipients live in GOP-RUN STATES. Six of the top 10 food stamp-using states are GOP-RUN states and beyond that the greatest food stamp using states are the sparsely populated red states. And of the 456 counties in America that use more than 90% of all food stamps, 421 of those
      counties (92%) voted for Mitt Romney in the 2012 election.

      – the GOP-RUN STATE most Republicans probably look to as
      a shining light for the GOP, Texas, which is the second largest economy in America behind California, compares very poorly to other states in America. Texas ranks in the bottom 5 in more than 90% of 23 subjective measures when compared to other American states! Even though the GOP has had 20 plus years to turn it into something other than a job creation machine, Texas continues to
      shortchange its residents living standards and exposes them to many hazards; including living in the most polluted environment in America.

      -Finally, all 15 of the states with the lowest life expectancy in the U.S. are GOP-RUN STATES?? Such that there is a large
      disparity in longevity between Red States and Blue States: on average, residents of blue states live 2 years longer than residents of red states. To the extreme, the Blue State residents of 9 states with longevity projected to 80 and older, live as much as 5-6 years longer than the residents of the 4 shortest-lived GOP-RUN STATES of MS,WV,AL & LA. Follow this: starting with longevity projections for red states of 75 in: Miss., W. Va., Ala. & LA.; to 76 in: Arkansas, Kentucky & Tennessee to 77 in: S. Carolina, Georgia, Missouri, Indiana, Ohio & N. Carolina; while no Blue State has a longevity projection of less than 78, and many Blue states have longevity projected to 80 and over: N.J., N.H., Vermont, N.Y., Mass., Calif., CT, Minn. & Hawaii; Only one red
      state has longevity projected to 80 Utah (80.2), while 2 Blue States have longevity projections of over 81 –Minn. & Hawaii)

      • joe schmo

        Are you being lied to again…..

        Moody’s and Pew Polls:
        Fastest job growing states in 2014

        North Dakota
        South Carolina

        Hmmmmm….and how many are Blue States? Notice California didn’t even make the list. It is sending business packing….. Most poverty in the whole USA. Thanks For nothing Governor Moonbeam.

        Least job creation:

        New Mexico
        New Hampshire
        New York
        Alaska (Gee I wonder why….Could it be demographics?)

        • Independent1

          Sorry I don’t believe a word of what you just posted. Below is a chart which shows the states that have seen the biggest change in job growth during 2014 And they aren’t the fabricated lists you just posted. And California does, IN FACT, lead the list!!!

          And, for that matter, what does JOB GROWTH have to do with RED STATES being TOTAL DISASTERS to live in because they lead the nation in violence, poverty, homicides, short life spans, terrible healthcare systems, corrupt politicians, polluted environments, uneducated people, deteriorating infrastructure, and on and on????????

        • bikejedi

          Joe it is hard to communicate with Independent . He just believes the sites that agree with him . He wont even look at his own regimes Dept of Labor Stats .. He will end up just calling you names when he cant debate on merit

    • joe schmo

      Absolutely, go for it….We need another best seller:)

      • bikejedi

        I should … Lord knows that in this economy I can use the money .. Maybe I could use the proceeds to take care of the Vets .. I mean at least as well as the Dems take care of the ILLEGAL ALIENS

  • ExRadioGuy15

    While the author does advocate for a more “muscular” Federal Government to play a part in people’s lives (something the Fascist Republicans and Fascism-suborning Libertarians hate), the “wiser spending” talking point is ridiculous.
    The author also contradicts himself regarding “wiser spending” and the GOP’s seditious “Starve the Beast” philosophy.
    Yes, Starve the Beast needs to be abandoned, fully. But, in order to do that, the upward wealth redistribution tools known as the Bush 43 tax policies (most of which are still in effect, despite the “Fiscal Cliff” resolution in early 2013) need to be repealed as soon as possible before any “wiser spending” can be discussed. There’s only one portion of the Federal budget where a “wiser spending” approach can be taken, and it’s the biggest portion of it: defense spending. The $600 BILLION we spend on defense is outrageous and equals the total amount the next 14 countries spend on defense COMBINED!
    And, here’s why “wiser spending” needs to be applied to the defense budget: most of the money spent on it goes into the pockets of defense contractors through profits and bonuses. The “Joint-Strike Fighter” (F-35) program is just such a situation. So far, the US has spent a TRILLION dollars on it, and the warplanes are JUST NOW being built! Also remember that other countries have joined in this program, which means that, once the jets are delivered, the US will get SOME of that money back. But, for the most part, defense programs’ cost are not shared by any other countries.
    Oh, by the way: when cuts are made to the defense budget, guess what the greedy defense contractors do? Instead of taking less profit, they start firing and laying off employees so that they can make the same profit out of less income. This is the essence of something I call “Vampire Capitalism”. Unfortunately, way too many corporate executives are Vampire Capitalists.
    Tax evasion/cheating is our biggest problem right now, not “unwise spending”. We don’t have enough tax revenue to spend unwisely. When the Bush 43 tax policies are repealed, we can THEN discuss how to spend the regained revenue. Until then, “wise spending” is a red herring 🙁 smh

    • joe schmo

      Defense spending? How much less can it get. Let’s just get rid of the military altogether shall we? Then we can see how long we last. YOU ARE LIVING IN LALALAND…….

      • Independent1

        “Defense spending? How much less can it get.”

        Wow!! I gave you credit a little bit ago for having about 1/2 a brain. I guess I need to take that back and realize you have virtually no brain.

        And the above statement you made proves it!!!

        Here’s just a little example of HOW EXCESSIVE AMERICA’S MILITARY SPENDING IS!!!!!!

        The $682 billion spent by the U.S. in 2013 was more than the combined military spending of China, Russia, the United Kingdom, Japan, France, Saudi Arabia, India, Germany, Italy and Brazil—which spent a total of $652 billion, according to the SIPRI Military Expenditure Database.

        In your feeble mind you’re trying to convince people that reducing military spending would somehow cripple our nation when even at current levels we’re spending more than the 10 leading military nations on the planet COMBINED????????

        You’re not living in LaLaLand -YOU’RE LIVING IN TOTAL IGNORANCE!!!!!!

  • Eleanore Whitaker

    We understand the need to help new, small businesses. We never understand handing well established, hugely profitable businesses tens of billions every year of our tax dollars. The equation begins with politicians in the House. Since, it’s the Constitutional duty of the House to disperse tax funds, you can only imagine how much of our tax dollars end up in red states when the GOP is in the majority.

    It’s a matter of “need” vs. “want:” The need to help small businesses to replace the titans who are living off tax dollars and “want” to keep their obscenely profitable businesses in existence by holding taxpayers as consumers and employees hostage.

    This is coming to a head. Most Americans do not believe it’s necessary to hand out “incentives” i.e., massive tax cut and exemption deals to “attract” business to a particular state. If all of these incentives ended, these businesses who still have to locate somewhere, without a tax incentive that burdens individuals living in these states. This is the most absurd line of Big Business Bullshit to come down the pike and one the GOP loves to reinforce with “businesses hire and create jobs” when they get incentives. Do they? Or are 90% of their business operations in cheap labor countries?

    When Big Business doesn’t give back for what it gets, who is the bigger fool for handing them tax subsidies that have zero ROI for the country?

    • joe schmo

      Eleanore…..your record is stuck on skip. ‘Texas is a success story’…..I don’t think I need to say another word. Jealous?

      • Eleanore Whitaker

        Texas is ONLY a success story because it has ONLY one major industry it uses to hold everyone in the other states hostage. Or did. Now that solar energy is biting the ass of Big Oil, Coal and Frackola, the hostages are getting fed up with Texas playing United States of Texas with our tax dollars.

        When my state gets an annual $14 billion like Big Rich Texas, That Whole Other Country (who can’t keeps its filthy syrup mitts off our tax dollars), then you get to tell us how wonderful Big Blowhard Texas, That Whole Other Freeloader State really is.

        Texas gets back an annual ROI of $1.72, for every $1 it pays in federal taxes. Check the GAO if you want proof. That $1.72 puts Texas No. 2 on the list of the states that get back the biggest return.

        Now Joi Boi..if Alaska in No. 1, Texas is No. 2 and the next 5 states are ALL red states in that list, do tell us who the hell you think are REALLY supporting these states?

        My state and surrounding Northeast states get back an average of 65 cents for the $1 we pay so that red state lazy asses with single industries to lay claim to can live on our states’ tax dollars. You don’t know much do you Schmomo? And, typical of narrow minded CONs conning the rest of us out of equitable federal taxes, YOU hate the truth, don’t you?

        • joe schmo

          Why don’t you do some research before you spew off at the mouth.

          I have read in several articles that clean burning natural gas is the wave of the future.

          “As it has for decades, energy is driving Texas’ economy. But it’s not because the state’s wells are gushing crude. In November 2009, Texas wells produced 1.08 million barrels per day, about half as much as they did in the late 1980s. In recent years, natural gas has been undergoing arenaissance. The state’s production rose about 35 percent between 2004 and 2008. And Texas has received a big boost from a different, renewable source of energy: wind.”

          They are a self=sufficient state and are not hone to other states to be on the energy grid. In other words, unlike other states, they provide for themselves.

          But the state’s energy complex is increasingly focused more on services and technology than on intuition and wildcatting. And it is selling
          those services into the global oil patch. Russian, Persian Gulf, and African oil developers now come to Houston for equipment, engineering, and software.

          The Texas housing market also has fared better than many. The mortgage delinquency rate (the portion of borrowers three months behind on
          payments) is 5.78 percent, compared with 8.78 nationwide, according to First American CoreLogic. That’s partly because relaxed zoning codes and
          abundant land kept both price appreciation and speculation down. “House prices didn’t experience a bubble in the same way as the rest of the
          nation,” said Anil Kumar, senior economist at the Federal Reserve Bank of Dallas. But it’s also because of two attributes not commonly
          associated with the Longhorn State: financial restraint and comparatively strong regulation. Unlike many of its neighbors, Texas has
          state laws that prohibited consumers from using home-equity lines of credit to increase borrowing to more than 80 percent of the value of their homes. The upshot: Dallas housing prices have fallen only 7
          percent from their 2007 peak, according to the Case-Shiller index.

          While its political leaders may occasionally flirt with secession, Texas thrives on connection. It surpassed California several years ago as the
          nation’s largest exporting state. Manufactured goods like electronics, chemicals, and machinery account for a bigger chunk of Texas’ exports
          than petroleum does.

          Thanks to that embrace of globalization, the Texas turnaround may help lead the nation in its economic turnaround. Texans have always had the
          ability to think big. Now that their state has become a player in the global economy, we can expect a new kind of swagger.

          Think again…..innovative, global without having to sell their soul, self sufficient, no income tax, an incentive to succeed, team player and open-minded. What’s that old saying….’don’t mess with Texas.’ Well they are putting the rest of the country to shame. I think Texas could teach the rest of the country a thing or two:)

          No you just can’t stand to see Conservative states succeed and believe me they are. California. Texas. HUGE difference.

          • Eleanore Whitaker

            Schmomo says to do some research…what a laugh! Then, the Schmomo says energy is driving Texas economy. Now jerk boi ask yourself just how Texas economy would do without that $14 billion your ASShat CONS of the GOP House majority voted to hand TEXAS last year? Already they’ve voted $15 billion for 2015…Get an education…Preferably one that isn’t Texan BS.

            They are not self-sufficient. If they are, why the hell do they need tens of billions of MY tax dollars?

            You’re pretty stupid if you think Texas would do so well after wind turbines and solar replace their filthy pollution product.

            Or, did you forget who helped pay for 50% of the Exxon Valdez spill Bush, a TexASS president dumped on taxpayers as his swan song in 2007?

            Texas is a blowhard energy state responsible for 90% of the wars in the Middle East. What the hell do you think the MIddle Eastern terrorists hate most if not TX oil interests in their countries?

            YOu really need an education little man. You’d love for us to all believe that the reason we are in a Great Recession and only the Middle and lower classes are feeling the pinch is because we caused it. That $14 billion your asshat GOP thugs handed to Texas for Big Oil last year could have been better spent on the taxpayers who paid the taxes that handed freeloading Texans that $14 billion they didn’t need.

            You don’t call yourself BIG, RICH Texas, That Whole Other Country and then run to the fed for $14 billion. Try again Jerk Boi..Your pathetic sociopathic need to try and jerk the rest of us taxpayers around isn’t working.

            The GAO has a record of Texas, Arizona and New Mexico receiving $80 billion in the last 10 years for border patrol, these asshat states don’t even enforce. Check out the 2011 Texas law that allows illegals to work as maids and yard workers…

            The next time you big mouth hot shots of the right try to tell me I’m wrong, all I have to do is shove the actual funding Texas gets from taxes paid by people in other states.

            If Texas is soooooooooooo BIG and sooooooooooo rich..why does it need on dime of our tax dollars? Big Oil pays zip in taxes, dumps the cost of their spills on taxpayers and then you have the balls to say I’m wrong? This doesn’t begin to include the billions spent on cleaning up Texas filthy pollution that goes beyond their state lines.

  • joe schmo

    Lower the ‘MFing’ tax rate. Look at Texas…. The shining example on the hill. Jobs as far as the eye can see, no income tax. Everyone is happy, happy, happy….. Maybe the rest of the Country should follow by example:)

    ….And let’s stop printing useless paper money. As soon as Russia and China stop using that almighty ‘printed’ piece of crap, America is doooooommmmmed. Then I wish you Dems all the best….LOLOLOL