Why I'm not voting for Bush: Taxes and Fiscal Responsibility

| | Comments (2) | TrackBacks (1)

The Republican party is supposed to be the party of fiscal responsibility. That's one of the things I really like about the GOP. But somehow, things have gone seriously wrong. The deficit spending is out of control. Bush did not veto a single spending bill.

OK. Fiscal responsibility is not so much about lowering budgets per se as mich as it is about balancing budgets. But Bush hasn't done that at all. Instead, he keeps increasing spending and lowering taxes. That just doesn't make any sense.

And now we get to a huge beef for me: taxes.

Bush has made it a stated goal that he is going to cut taxes every year that he is in office, regardless of circumstance. What kind of policy is that? It certainly isn't a principled one unless "tax cuts" is a principle. Look--tax cuts are not always wise. Sometimes, yes. Always? No. (Unless you are a Libertarian who thinks that all taxes are immoral by nature.)

Tax cuts are great if the tax burden is too high. But there was no evidence that it was too high. The Clinton boom years were evidence that the economy can do just fine with taxes at the Clinton levels. The tax burden was not too high and it did not need to be cut as a matter of general fiscal health.

OK, getting beyond "tax cuts no matter what", we come to "tax cuts for the rich". Yes, I know, Bush cut taxes for everyone. I'm not ignoring that. And yes I'm aware that when you cut taxes for everyone, the rich benefit the most because they were the ones paying the most to begin with. I'm not talking about that kind of "tax cuts for the rich". I'm talking about a redistribution of the tax burden from one section of society to another. That is to say, I'm talking about when one group pays a larger percentage of overall taxes than before due to changes in the tax law.

To the extent that the burden has shifted off the poor and onto the middle class, that's great. Progressive taxation is a very good thing. And make no mistake about it, Bush has done this. The poor pay a smaller percentage of all taxes collected than before. That's great. However, to the extent that the tax burden has shifted off the rich and onto the middle class, that's not so good. And make no mistake about it, that has happened too. You cannot make the argument that the rich were being overtaxed before; prior to Bush, the top 5% of earners earned 33% of all income, and paid 40% of all taxes (this includes all taxes, not just income tax). That's barely more than a flat tax. Since the cuts, which have shifted the burden off the rich to some extent, (and remember that the rich have been getting richer while the middle class and the poor are bringing home less real income than four years ago), the top 5% of earners are now earning more than 33% of all income and paying less than 40% of all taxes. Which is to say that they are now near or at a flat tax level, or possibly even in regressive taxation levels.

Bush likes to cut various non-income taxes calling them "double taxation". That sounds reasonable until you realize that after you have an income tax, every other tax counts as double taxation. His logic and actions are in accord here--Bush wants to cut all taxes besides the income tax. And as Edwards points out, that means that the only people who will get taxed are the people who work for their money. Everyone who gets their income from investments, or dividends, or inheritance, they won't get taxed at all. That is not the correct way to encourage hard work.

Bush treats tax cuts like they are some sort of magic wand. But tax cuts can't balance the budget. Tax cuts can't reduce the deficit. Bush's blind faith in the power of tax cuts and his unrestrained spending make him an unacceptable choice for president.

1 TrackBacks

Listed below are links to blogs that reference this entry: Why I'm not voting for Bush: Taxes and Fiscal Responsibility.

TrackBack URL for this entry: http://movabletype.ektopos.com/cgi-bin/mt-tb.cgi/878

An Encouraged Read. from Honzo, knowing that I know that I do not know anything worthwhile. on November 1, 2004 2:14 AM

I would recomend everyone going over and giving a good read-over to Jeremy and Wink's posts over at Parableman. One is for Bush, the other is for Kerry. Kerry's Legislation of Morality Single Issue Voter Why I'm not voting for... Read More

2 Comments

The reason Bush originally proposed a tax cut was for recovery from recession and stimulation of the economy, and it was one of the fastest recoveries from such a recession ever. The one worry is jobs (which at 5% unemployment isn't anywhere close to as bad as Kerry is making it sound), and I assume Bush thinks that further tax cuts will stimulate hiring. My impression is that any further tax cuts will not be across the board, though, but based on principle -- the inheritance tax is unfair, the marriage penalties for situations when they occur (it actually helped me to get married, but that's because I made more money than Sam, and now I earn the whole paycheck), etc. This isn't one of the issues that have motivated me most, so I haven't done as much investigation on it, but I didn't think Bush intended to increase tax cuts across the board or for the rich, just not roll back the tax cut for the rich the way Kerry wants to. If my impression is right on that, then it undercuts the first part of your argument a little bit.

Those who are principled about fairness of taxes, which actually includes Ralph Nader in a few ways, will still see those who make 33% of the income paying 40% of the tax burden as unfair. For them (and this is most true conservatives) increasing the taxes on a group that is already taxed unfairly is truly unjust. That's what seems to be driving those who want to cut taxes on the rich even further. Again, I don't remember Bush saying he wanted to do this, though. He just doesn't want it to get more unfair than it already is. So the principle isn't tax cuts for the sake of tax cuts. It's tax cuts for the sake of more equal taxation.

As for spending, I think Bush is clearly the lesser of two evils on this one, as I've said before. Kerry's proposed budget is so much higher than Bush's that there's no way the amount of higher taxes on the rich will cover it, even if you ignore the fact that that may well lower the productivity of the higher earners and therefore make the tax yield lower than it is with the current rate. A number of economists have predicted that if Kerry succeeds in raising the tax for the top two brackets (not the top one bracket, as he has pretended in the debates and his stump speeches) back to Clinton levels. Kerry's proposed budget is so much higher than Bush's that arguing against Bush (and thus, logically, for Kerry) based on Bush's tendency not to oppose increasing the deficit just isn't going to cut it. Kerry may go on and on about how Bush's policies here are problematic, but if Kerry gets his way his will be worse. (Bush also says he'll do the things Kerry says he'll do. I'm not sure it will really happen with either one.) The only thing stopping him will be gridlock, but that's been there for Bush too with only a bare majority in both houses of Congress, and we don't know yet who will control the Senate anyway, though Republicans have a slight advantage at the moment to get a one- or two-vote majority again.

I happen to agree more with the things Bush is spending money on anyway, so I'd rather him bloating the budget, and if you would favor more what Kerry would do then it makes sense that this consideration would favor Kerry for you.

The main thought I have on what Bush has done so far, though, is that he's been picking his battles. He's been conceding to Republicans in Congress so that they will later support what he wants to do. He's been conceding to Democrats in Congress so that things can get done at all. Kerry would have to do the same thing, no matter which party is in control of the Senate. That's why I don't think there's much to choose from here. They'll both do this. Kerry will try to do it with more money and with causes I support less. Much will try to do it with less money and causes I support more. That's why I think Bush easily wins the "lesser of two evils" label on this issue.

The reason Bush originally proposed a tax cut was for recovery from recession and stimulation of the economy

Actually, the original reason for the tax cut (stated early in the 2000 campaign) was that the surplus was evidence that citizens had been overtaxed. Thus, the tax cut amounted to a "rebate". Econimc stimulus was secondary at best, especially as the economy was "overstimulated" to begin with.

And this is part of why I see Bush as not cutting taxes based on other prinicple, and instead see Bush cutting taxes as a principle in and of itself. When circunstances changed wildly (going from bubble to burst), the tax cut proposal remained totally unchanged. The rationale "behind" it changed radically, but in light of the complete lack of change in the proposal itself, I cannot help but think that the proposal was the part that was important to Bush and that the rationale was determined after the fact.

I am not saying that this particular tax cut was the wrong thing to do. It may well have been responsible for the lightness of the recession (or not). What really bothers me is Bush's insistence that tax cuts are the right solution no matter what the problem. Economy too active (2000)? Tax cut. Recession (2001 and 2002)? Tax cut (both times). Stagant economy (2003)? Tax cut. Economy growing too slowly (2004)? Tax cut. Seriously, with Bush, he wants a tax cut regardless of circumstance. He has said so himself. His tax cutting is not principled except inasmuch as tax cutting itself has become a principle.

the inheritance tax is unfair, the marriage penalties for situations when they occur...etc.

Again, I'm not against all tax cuts. I think getting rid of the marriage penalty was the right thing to do. But other ones...not so much. We can get into it in another post sometime, but I think that an inheritance tax is not inherently unfair. Nor do I think that a tax on dividends is inherently unfair. And cuts in both of those taxes most certainly count as "tax cuts for the rich".

Those who are principled about fairness of taxes...will still see those who make 33% of the income paying 40% of the tax burden as unfair.

Depends on the principle. I think that a flat tax is "fair" in once sense of the word. But I think that a progressive tax is even "fairer". And I think that a regressive tax is in no way fair. We are perilously close (if not already there) to a regressive tax, and Bush is still committed to more tax cuts.

As for spending, I think Bush is clearly the lesser of two evils on this one

As I said in my "Endorsement" post, saying that Kerry is worse on a given issue is kind of missing the point of these posts. That being said, I'm not entirely convinced that Kerry's budget is that much higher than Bush's. Last I heard, it was actually the other way around. And the point here was about fiscal responsibility, that is to say, about being able to pay for everything in the budget; not about the absolute size of the budget. The budget can be enourmous--I don't care--as long as there is money to pay for it. Bush intends to pay for his (allegedly smaller but still enourmous) budget with tax cuts. Kerry intends to pay for his (allegedly even more humongous) budget with PayAsYouGo. Even though Bush's is (allegedly) smaller, Kerry is still the fiscally responsible one here.

Leave a comment

Contact

    The Parablemen are: , , and .

Archives

Archives

Books I'm Reading

Fiction I've Finished Recently

Non-Fiction I've Finished Recently

Books I've Been Referring To

I've Been Listening To

Games I've Been Playing

Other Stuff

    jolly_good_blogger

    thinking blogger
    thinking blogger

    Dr. Seuss Pro

    Search or read the Bible


    Example: John 1 or love one another (ESV)





  • Link Policy
Powered by Movable Type 5.04