Sunday, November 13

Even The Liberals At NPR Agree, Vol. CCCXXXI

Adam Davidson, "It's Not Just About the Millionaires". November 9

ONCE more, as if it were needed: I'm not an economist, I'm a shit-flinger. There's less money in it, but but it's a more valuable service.
This election is about stark differences on economic policy, but one of the few fiscal issues on which Democrats and Republicans agree — surprisingly — is how to tax corporations. Every Republican presidential candidate, and even the guy who currently has the job they’re after, wants to lower rates. Raising them, or even maintaining them, might satisfy the anti-corporate angst of protesters and populists, but it won’t come anywhere near paying off our debt.

Our old favorite, the opening paragraph that simultaneously gives the game away, and annihilates the thousand words that follow.

Where do we begin? With the notion that the Republican's Absolutely No Taxes, Ever is "starkly opposed" by the Democrats' Historically Low Taxation Unless We Can Possibly Raise It Slightly On The Wealthiest 1%, Without Pissing Off Donors? Or that "Democrats" and "Republicans" represent the Manichaean boundaries of human cogitation and domestic political will? That, in fact, "Democrat" and "Republican" views on corporate taxation are in some way--in any way--the product of objective thought, rather than objective accounting? That one is justified in saying "even" Barack Obama agrees with the Seven Specks of Granite, as though that settles something, let alone in the affirmative?

How 'bout here: the idea that demands for increasing taxation on the wealthiest Americans and our corporate fellow citizens is an idea born of angst, and one which is proffered as a way to "pay off" "the debt"? Boy, those protesters and populists sure are misguided, now that you've explained them to me.

Who actually believes that the solution to a problem lies in defining it in such a way that one's preferred action seems like the only possible choice? Well, politicians and jingle writers. Anyone else? Who out there, facing the horns of a dilemma, the teeth of a difficulty, or the angry shower-stall erection of a predicament, says to himself, "Wait! I should ask a politician!"?
Most people who study the issue agree that the top federal corporate tax rate (35 percent of profits) is simply too high.

Just a note here--all economic pronouncements coming from me are illiteracies--but is it not the case that by "most people" "who study" you mean "people paid to consider the effect taxation has on corporate profitability"? And nothing further? Such as, say, the effect it would have on corporate profitability if their non-corporate (aka "second-class") fellow citizens decided they should no longer pay to support the infrastructure those corporations depend on to make any profits whatsoever? Or for the massive Defense outlays, the mineral and water rights giveaways, and government contracting which represent a sizable portion of, if not the net aggregate profit, for many? What exactly is it worth to American corporate citizens that the United States government has, over the past century or more, sought to enforce capitalism--a capitalism, remember, based on a convenient and spurious reading of a Constitutional amendment designed to protect former slaves--here and around the world? Why shouldn't the government--as the instrument, supposedly, of the general population--do to corporations what corporations do to their fellows: take every possible advantage of every tiny lever within its grasp?
The cardinal rule of taxation is that whatever you put a levy on, you’ll inevitably get less of.

"Cardinal" means "fundamental" (so "inevitability" is a given. Dude.). If I look at the cardinal points of the compass, I find 'em right where I left 'em the last time. This isn't the, or a, cardinal rule of taxation. It's the standard rejoinder of the taxed, who imagine that, if they could just avoid paying the 2¢ they actually pay of the nominal 35¢ they're taxed on a dollar of profit, they'd have $1.02. It's a convenient, and illiterate, reading of the Second Law of Thermodynamics. The system isn't closed. The profit maker (sorry, the Benevolent Employer on whom we all rely) doesn't lose that 2¢. He buys something with it. Granted, he has no choice, but then neither do the rest of us have a choice but to grant him, as just one example, a limited liability non-corporate citizens do not share.
Taxing corporate activity means less investing, less hiring, fewer jobs and a smaller economy

of a certain type,
which hurts the rich, the poor and the middle class alike.

in certain (and unequal) ways.
While this may seem like Republican propaganda,

Just because something sounds like Republican propaganda doesn't make it right.
NPR’s “Planet Money,” for which I work, polled many leading progressive policy groups and academics, all of whom told us that they would support lowering the top corporate tax rate.

Which sounds like the precise thing that's behind Republican propaganda.

Here's the interesting thing about this: you sure don't see this sort of analysis done on Social Security, Medicare, or national health care. Not on the business pages, and not from the Republican party, anyway. Should the top corporate tax rates be cut? Maybe. Should Exxon-Mobil and GE be able to avoid taxes altogether? Maybe, depending on the tax structure, but not under the current one. Nevertheless, it moves! You've got a conclusion which arises not from the "evidence" as characterized by what "most people who study the matter" think, but from how you stated the question. It looks at one portion of the tax structure in isolation. And then--and most of all--it simply ignores the history of corporate bad citizenship, of bribery, of criminal collusion, of unequal access to government and the law, and demands that the victims of these behaviors shoulder more of the burden out of fairness.

Y'know something tells me that if most people who study the problem concluded that the solution was to end the phony corporate protection written into the margins of the 14th Amendment in invisible ink, and to revert to an agrarian/barter culture, with a reasonable democratic control of what was produced, when, and for how much, you wouldn't hear a lot of these folks saying, "Welp, okay, let's give it a try."
Any serious analyst who isn’t paid by one of the tax-benefiting industries would suggest eliminating most industry-specific loopholes. But the problem is that cutting them will not even come close to reviving our economy. Alternatively, even if we eliminated all corporate taxes, the extra $250 billion per year at the companies’ disposal wouldn’t be enough to make our $14 trillion economy grow. President Obama tried an $800 billion stimulus, and we’re still debating whether it helped or hurt or did nothing at all.

Okay, for the record: we're in a sixty-five year hole, corresponding to our having added to our WWII indebtedness military expenditures since then which pretty much continued at the same rate. Those aren't recoverable, they aren't readily convertible into something else of value, and they've benefitted very few, financially, at an oversized consequence to our national indebtedness. And we exacerbated that, beginning with the Reagan "Government Debt is Theft" revolution (and how'd that bit of expert wisdom work out for us?) by slashing the top marginal tax rates, which is roughly the level of increased debt we find ourselves dealing with today. The argument for having done so was Jobs. We are now arguing over why there aren't any jobs.

So I'm guessing that most experts who have studied the problem and can be trusted to utter an honest word on the subject would conclude that slashing those tax rates did not work. And doing more of that, while not necessarily contraindicated, is at least lacking in a strong moral or practical imperative. And, further, even a simple history of the public debt--even one which, as this one does, ignores all benefits of public spending--tells us that we didn't get here overnight, so insisting that some action or other "won't solve the problem" is a quacking canard.
It serves the interest of both parties to argue about taxes on corporations and the wealthy because neither wants to discuss the alternative, which is where things get touchy.

S'funny. A couple hundred words ago, what all our politicians agreed on was apodictic.
To solve our debt problems, we have to go to where the money is — the middle class. People who earn between $30,000 and $200,000 a year make a total of around $5 trillion and pay less than 10 percent of that in taxes (owing mostly to tax incentives and the fact that most families make less than $68,000, where larger tax rates begin).

Most make less than $68,000, and are taxed at lower rates, which is why we lump them in with people making $200,000? Because we know you wouldn't do that just to get the required numbers, right? Because there's a cardinal rule about that, somewhere.

Interesting, too, how easy it is to rid ourselves of "middle-class" loopholes.
Increasing the middle-class tax burden an additional 8 percent, however, would actually have a bigger impact than taxing millionaires at 100 percent.

Just for the record, what impact would "killing everyone who doesn't work for a living" have?
Still, many experts say we don’t need to raise the tax rate on the middle class; we just need to get rid of some of those despised loopholes (or beloved incentives). Most reform proposals suggest gradually eliminating the most popular tax deductions, like mortgage interest rates ($120 billion per year) and workplace health insurance ($200 billion per year). Regardless, most economists acknowledge, and most politicians privately concede, that the middle class will have to give up some benefits (Social Security, Medicare) or it will have to pay more in taxes. Actually, it will probably have to do both. The millionaires will be paying more, too. Leading Democrats are proposing a nearly 10 percent hike.

"Leading Democrats" are "proposing a 10% hike"? When, pray tell, was the last time Democrats drove tax policy? When was the last time "leading Democrats" accomplished anything they proposed? Funny how all of a sudden their proposals are supposed to be taken seriously.

It's plain, it's simple, and it's unequivocal: over the past thirty years or more, unequal access to government policy has further enriched the wealthiest Americans at the expense of all other Americans, and has permitted increased protection of huge corporations with fewer and fewer controls on their behavior. The argument is not what math gets us out of the stink this shit created. The argument is how much further do you fucks think you can push it? Paying for today, and paying for the future, is something all Americans should do, including our "corporate" brothers. Paying for the past is the ethical answer to the question of government debt, and that should be done--in addition to what's fair--by those who helped themselves while everyone else sank.


ifthethunderdontgetya™³²®© said...

My comment yesterday at the NYT Magazine (as yet unpublished):

While this may seem like Republican propaganda..."

That's because that's exactly what it is, Adam Davidson.

Adding in the opinions of neoliberals like Erskine Bowles doesn't change that fact. The debt is not the same thing as the deficit, and you quite predictably blur the lines between the two.

I concur with the other posters, this article is fraught with errors and needs to be sent to the ombudsmen straight away.

By the way, the version of this published at NPR is even more egregious.

P.S. President Obama tried an $800 billion stimulus, and we’re still debating whether it helped or hurt or did nothing at all.

No, we're aren't. The debate is whether Obama should have asked for more when it was clear that wasn't enough. Republican poo-flinging is not "debating".

There have been two important bipartisan commissions — Rivlin-Domenici and Simpson-Bowles — that reached the same conclusion:

Alan Simpson and Erskine Bowles (someone Obama picked only because 1) Democrat 2) known advocate of cutting Social Security) published a conclusion. Their committee did not.

And on and on. Our number one problem is not the debt, or the deficit. It is unemployment. Furthermore, raising taxes/cutting benefits on the middle class will have a more dramatic, negative impact on the economy than raising taxes on those aren't spending every dollar that comes in the door.

P.P.S. You said, "Okay, for the record: we're in a sixty-five year hole, corresponding to our having added to our WWII indebtedness military expenditures since then which pretty much continued at the same rate." In fact, the debt passed on by Jimmy Carter's Administration is a negligible portion of our debt today. As recently as early in the Bush-Cheney regime, a maestro such as Alan Greenspan was worried that we would no longer have benchmark Treasury bonds due to paying them all off** (of course, Bush andcompany fixed that problem, but good).

** Planet Money link chosen deliberately. As you can tell, this p.o.s. has riled me quite considerably. IF I blog about it meself, the post will be titled "NPR's Adam Davidson Is A Liar."

James Briggs Stratton "Doghouse" Riley said...

Indeed, the trillion-dollar debt Reagan's puppetmasters had him dance the Highly Publicized Sad Dance when he was "forced" to sign the bill increasing the debt ceiling, was largely the indebtedness and debt service on WWII. There was no corresponding Hype Fest when Ronnie raised it to $2 trillion, or $3 trillion, not a countdown to see if he'd reach $4 trillion or full-blown senility first.

Money's fungible, but today's debt is ethically the Reagan Debt, and the Bush/Republican Majority debt, and is the result of incontinent tax-cutting specifically designed to de-fund hated programs they didn't have the courage to confront head-on. You'd suspect they'd even have realized that at NPR.

And thanks for mentioning Bowles-Simpson; I pointed that out in my original, but it was accidentally edited in the publishing process.

Fiddlin Bill said...

This sort of NPR "piece" I tend to view as simply their management's continuing effort to show Congress that they're not really "liberals" or "socialists." Not that the particular analyst isn't himself quite believing of what he says. But the effect--more "balance." My conclusion: no more donations to NPR.

Fiddlin Bill said...

Oh look, I found another example of NPR's "balance-ism" in a mere 30 seconds, and it's as current as JoPa. I rest my case:

prairie curmudgeon said...

How did this "debate" on taxation get shifted from lowering the deficit to reducing the debt? While a proposal to raise some taxes on wealth by 200 billion dollars can make a significant dent in the annual deficit it suddenly becomes insignificant and thus not worth discussion as a means of lowering the entire debt.

As part of load of debt added by Reagan do not forget the social security reforms which added to the social security surpluses which were used as general revenue sources and which also partially masked the rising deficits created in part by lowering taxes on the wealthy and corporations. At the very least this portion of the debt represented by the social security trust fund should be repaid in whole by increasing taxes on the rich by the default rescinding of the bush tax cuts on the rich.