Thinking Right

By Ragnar Danneskjöld

November 17, 2008 8:44 AM | Link to this

Good morning all. “Government intervention in the financial sector was necessary to arrest panic.” I agree that intervention was necessary, although I believe – and previously argued here - that the plan passed by Congress was not appropriate for US economic needs. The financial sector affects every other industry; that argument does not exist for Detroit.

Joseph Schumpeter’s life work was dedicated to the proposition that Detroit now faces, and is the reason we no longer have a buggy-whip industry. The global automobile industry has excess production capacity. The advantage is to the low-cost producers, due to US government diktat, as automobiles become less an article of prestige or enjoyment, and more an item of efficient functionality. For many reasons, mostly labor-costs and government-restrictions, Detroit is among the highest cost auto producers in the world (the Germans and Swedes rank even with the traditionally-American companies.) Japan’s labor and related production efficiencies make it competitive in the world markets. Note however, that it is only the American market where the American companies are unprofitable; the big three are doing nicely everywhere else in the world. Countries with lower corporate taxation – and that is most of the world other than Japan – will have a clear advantage over Detroit in the car wars.

I think our friend ron last week argued, correctly, that chapter 11 was the appropriate resolution for Detroit’s difficulties. Ford has the cash to survive another year; Chrysler and GM do not. Even in chapter 11, however, much capacity will be reduced. Perversely, many of the most profitable products of the big three cannot survive chapter 11, as they are unviable due to US pollution and gas mileage restrictions. The nanny government will once again be the immediate cause of much economic dislocation and private suffering, as it was in the housing meltdown.

By Churchill

November 17, 2008 8:51 AM | Link to this

Mom is in her room drinking again, I will be so glad when football season is over or when Auburn beats Alabama. She wanted me to post this Palin bit for her.. Please pray for Auburn Football

FRANK RICH Published: November 16, 2008 ELECTION junkies in acute withdrawal need suffer no longer. Though the exciting Obama-McCain race is over, the cockfight among the losers has only just begun. The conservative crackup may be ugly, but as entertainment, it’s two thumbs up!

“The love-in that supposedly a large group of people are having over Sarah Palin leaves me stumped….I can’t help thinking if she were an average-looking mid-forties woman who wore sensible shoes instead of bright red pumps, the fuss would be over before it began. “

Over at Fox News, Greta Van Susteren has been trashing the credibility of her own network’s chief political correspondent, Carl Cameron, for his report on Sarah Palin’s inability to identify Africa as a continent, while Bill O’Reilly valiantly defends Cameron’s honor. At Slate, a post-mortem of conservative intellectuals descended into name-calling, with the writer Ross Douthat of The Atlantic labeling the legal scholar Douglas Kmiec a “useful idiot.”

In an exuberant class by himself is Michael Barone, a ubiquitous conservative commentator who last week said that journalists who trash Palin (more than a few of them conservatives) do so because “she did not abort her Down syndrome baby.” He was being “humorous,” he subsequently explained to Politico, though the joke may be on him. Barone writes for U.S. News & World Report, where his 2008 analyses included keepers like “Just Call Her Sarah ‘Delano’ Palin.” Just call it coincidence, but on Election Day, word spread that the once-weekly U.S. News was downsizing to a monthly — a step closer to the fate of Literary Digest, the weekly magazine that vanished two years after its straw poll predicted an Alf Landon landslide over Franklin Delano Roosevelt in 1936.

Will the 2008 G.O.P. go the way of the 1936 G.O.P., which didn’t reclaim the White House until 1952? Even factoring in the Democrats’ time-honored propensity for self-immolation, it’s not beyond reason. The Republicans are in serious denial. A few heretics excepted, they hope to blame all their woes on their unpopular president, the inept McCain campaign and their party’s latent greed for budget-busting earmarks.

The trouble is far more fundamental than that. The G.O.P. ran out of steam and ideas well before George W. Bush took office and Tom DeLay ran amok, and it is now more representative of 20th-century South Africa during apartheid than 21st-century America. The proof is in the vanilla pudding. When David Letterman said that the 10 G.O.P. presidential candidates at an early debate looked like “guys waiting to tee off at a restricted country club,” he was the first to correctly call the election.

On Nov. 4, that’s roughly the sole constituency that remained loyal to the party — minus its wealthiest slice, a previously solid G.O.P. stronghold that turned blue this year (in a whopping swing of 34 percentage points). The Republicans lost every region of the country by double digits except the South, which they won by less than double digits (9 points). They took the South only because McCain, who ran roughly even with Obama among whites in every other region, won Southern whites by 38 percentage points.

Those occasional counties that tilted more Republican in 2008 tended to be not only the least diverse, but also the most rural, least educated and slowest-growing in population. McCain-Palin did score a landslide among white evangelical Christians, though even in that demographic Obama shaved the G.O.P. margin by seven percentage points from 2004.

The Republicans did this to themselves, yet a convenient amnesia can be found in conservatives’ post-Election Day soul searching. There’s endless hand-wringing about Bush and McCain blunders and Abramoff-Stevens corruption, but there’s barely any mention of the nasty cultural brawls that defined the G.O.P. campaign narrative this year as the party clung bitterly once more to its 40-year-old “Southern strategy.”

There were as many Republican prejudices as candidates. In primary season, the whispered antipathy among some conservative evangelicals toward Mormons grew so loud that Mitt Romney felt compelled to give a speech defending his faith (but was so fearful of inciting further wrath that he said the word Mormon only once). The conservative gatekeeper Michael Medved spotlighted another whisper campaign in May, writing that the popular moderate Florida G.O.P. governor Charlie Crist had been “single since his divorce in 1980 (after a marriage that lasted only a year)” and was the subject of “nasty rumors of possible gay activity.” Crist announced his engagement to a woman weeks later, but by then he was no longer a serious contender for the ticket.

John McCain also might have held Florida had he prevailed with his first choice of a running mate, the pro-abortion-rights Joe Lieberman, but G.O.P. ayatollahs scuttled both him and the abortion moderate Tom Ridge, who might have helped win Pennsylvania. Not that McCain was innocent in these exclusionary escapades. He strenuously sought the endorsement of the Rev. John Hagee, even though Hagee had blamed gays for Hurricane Katrina, referred to the Roman Catholic Church as “the great w*******,” and theorized that Hitler came about because God’s “top priority for the Jewish people is to get them to come back to the land of Israel.”

The icing on this rancid cake was the race-baiting of Obama and the immigrant bashing by G.O.P. hopefuls who tried to outdo the nativist fringe candidate Tom Tancredo. Yet Republican denial is unabated. In an interview with Palin the weekend before the election, a conservative Wall Street Journal editorialist asked whether “the G.O.P. doesn’t in fact have a perception problem, that it is no longer viewed as a big tent.” A perception problem? Hello — how about a reality problem?

Yet the G.O.P. really does believe that it’s all about perception. That’s why its 2000 convention offered a stage full of break dancers and gospel singers, wildly outnumbering the black delegates in the audience. Bush and Karl Rove regarded diversity as a public-relations issue to be finessed with marketing. Round up some black extras! Sell “compassionate conservatism” by posing Bush incessantly with black schoolchildren! Problem solved!

The 2004 Bush-Cheney campaign Web site even boasted a “Compassion” archive of photos of Bush with black folk, including Colin Powell. McCain used the same playbook this year, when he headed south to emote over Katrina victims and stock his own Web site with pictures depicting his adventures in black America. He had been a no-show in New Orleans during the six months after the hurricane hit, when his presence might have made a difference.

In defeat, the party’s thinking remains unchanged. Its leaders once again believe they can bamboozle the public into thinking they’re the “party of Lincoln” by pushing forward a few minority front men or women. The reason why they are promoting Palin and the recently elected Indian-American governor of Louisiana, Bobby Jindal, as the party’s “future” is not just that they are hard-line social conservatives; they are also the only prominent Republican officeholders under 50 who are not white men. The G.O.P. will have to dip down to a former one-term lieutenant governor of Maryland, Michael Steele, to put a black public face on its national committee.

Such window dressing aside, there remains only one Republican idea for reaching out to minority voters: Richard Land, of the Southern Baptist Convention, recommends pandering to socially conservative blacks and Hispanics with yet more hyperventilation about same-sex marriage. Weird though it may be, gays were the sole minority group that actually voted slightly more Republican this year (though still going Democratic by 70 to 27 percent). Pitting blacks and Latinos against them could open up a whole new bloody front in the G.O.P. civil war.

The only other widespread post-election conservative ideas are Bush 2000 retreads (market-based health care and education reform). Jindal offers generic gab about how the party must offer Americans “real solutions” and “substance,” but he has yet to offer a real solution to his own state’s gaping $1 billion budget shortfall. Indeed, the only two “new” ideas that the G.O.P. is pushing in defeat are those they condemn when practiced by Democrats: celebrity and identity politics. Palin’s manic post-election publicity tour, which may yet propel her and “the first dude” to “Dancing With the Stars,” is almost a parody of the McCain ad likening Obama to Paris and Britney. Anyone who says so is promptly called out for sexism by the P.C. police of the newly “feminist” G.O.P.

At the risk of being so reviled, let me point out that in the marathon of Palin interviews last week, the single most revealing exchange had nothing to do with her wardrobe or the “jerks” (as she called them) around McCain. It came instead when Wolf Blitzer of CNN asked for some substance by inviting her to suggest “one or two ideas” that Republicans might have to offer. “Well, a lot of Republican governors have really good ideas for our nation,” she responded, without specifying anything except that “it’s all about free enterprise and respecting equality.” Well, yes, but surely there’s some actual new initiative worth mentioning, Blitzer followed up. “Gah!” replied the G.O.P.’s future. “Nothing specific right now!”

The good news for Democrats is a post-election Gallup poll finding that while only 45 percent of Americans want to see Palin have a national political future (and 52 percent of Americans do not), 76 percent of Republicans say bring her on. The bad news for Democrats is that these are the exact circumstances that can make Obama cocky and Democrats sloppy. The worse news for the country is that at a time of genuine national peril we actually do need an opposition party that is not brain-dead.

By Retire Wooten

November 17, 2008 8:52 AM | Link to this

Government intervention= Corporate Welfare, Socialism, and whatever else you Republicans want to pin on Democrats. Remember this in the future: it happened under a Republican administration. Wooten likes to parse his words, but he’ll be screaming socialism if Obama bails them out.

By Dusty For Martin

November 17, 2008 8:54 AM | Link to this

Jim Martin has my vote. Saxby Chambliss is a liar & thief.

By Republicans for Martin

November 17, 2008 8:57 AM | Link to this

Saxby got over $2 million for our vote on the $700 billion bail out wall street bill. How can we trust him to not sell out to the lobbyist again?

By Ragnar Danneskjöld

November 17, 2008 9:05 AM | Link to this

The simple way to identify the paid anti-Saxbe bloggers and the closely-related (but much smaller in number) Saxbe Derangement Syndrome sufferers is that their first post of the day ignores the topic of the day – they don’t waste any time with thought before posting their program materials. As the off-topic anti-Saxbe postings already begin, here, as a public service, are the responses to the whinings of today’s paid democrat bloggers and for the other Saxbe Derangement Syndrome sufferers:

(1) No, he didn’t smear Max Cleland and he did not question Cleland’s patriotism; here is the ad, see for yourself. He did challenge Cleland’s judgment, legitimately. Mr. Cleland richly deserved to be fired for insisting on unionizing Homeland Security, then in formation; as rotten as that agency is, can you imagine how bad it would be if it had been unionized? Two weeks ago, in this space albeit in another context, we discussed the inherent economic problem that arises with unionized bureaucrats. Democrats always claim that their judgment on policy matters should not be questioned, that same is “smearing.” This was a valid economic challenge – Saxbe was not merely a screaming monkey jumping on Cleland’s shoulders – and there is no doubt in retrospect that the voters made a good decision. (Note that Mr. Cleland is never mentioned prospectively for statewide office in Georgia. Isn’t that the real difference between a smear and a valid criticism?) We all agree that Saxbe destroyed Max’s political career, we simply disagree over the merits of that destruction. I think the destruction was a fundamental good for society.

(2) The reasons to vote for Saxbe are

(a) Mr. Chambliss’s unflinching support of the military missions in Afghanistan and Iraq. He gets to share the credit for the victories - (a) the extinguishment of al Qaeda all over the world and (b) the formation of a true representative democracy in the heart of the Arabian Middle East - because he never demanded unilateral withdrawal, when the screaming monkeys were baselessly demanding surrender. Mr. Martin lacks Mr. Lieberman’s character (that’s not particularly a criticism of Martin, few people do), and would have knuckled under to party pressure.

(b) Mr. Chambliss’s unqualified endorsements of Chief Justice Roberts and Justice Alito, in the confirmation process. I think a majority of democrats opposed both, and the conservative bloc has been correct on every issue, even when in the minority. Mr. Martin does not appreciate the virtues of conservative justices, and he fails to appreciate the danger in the “living, breathing Constitution.”

(c) Mr. Chambliss is “open” to Fair Tax, even if, as friend Ga Values argues, Chambliss does not understand it. Mr. Martin is not open to the Fair Tax, and willfully misrepresents the nature of the plan. Before Boortz and Linder, I advocated elimination of the income tax and substitution of a national sales tax, both on grounds of “fairness” and simplicity. Amusingly, Mr. Martin’s total argument against the Fair Tax seems to be that democrats cannot be trusted to really abolish the income tax; perhaps he is correct in his character analysis there.

(3) We don’t care about lobbyists. If you have any suggestion of “bribery,” take it to the Obama justice department. Otherwise the activities of Chambliss and family are indistinguishable from those of the prospective vice president. Saxbe’s earmarks are a drop in the ocean of democrat earmarks under the current Congress, so that is hardly an argument for strengthening the political power of the democrats. I acknowledge my weasel-words in this argument, as I have a profound contempt for the democrat spending standards that lured formerly-honest conservatives to the dark side.

(4) The headline of the November 12 WSJ read, “Democrats Plot Detroit Rescue.” While there may be some argument in favor of government intervention to preserve confidence in the financial system, as that meaningfully implicates every other business in the country, that same argument does not validate corporate welfare to the failing automobile giants. Mr. Martin does not distance himself from the “democrats” in the headline, and thus cannot possibly claim a favorable distinction from Mr. Chambliss.

By Ga Values

November 17, 2008 9:06 AM | Link to this

Here is a really good editorial from the Augusta Paper, This pretty well says what I’m thinking without the spelling errors.

Conventional left wing wisdom holds that the Nov. 4 election wasn’t just a rejection of President Bush, John McCain or the Republican Party “brand,” but of conservatism itself.

Liberal columnist Eugene Robinson made that argument in a Chronicle op-ed piece last Wednesday, contending that America is “turning left” and is no longer a “center-right nation.” He’s dreaming. Democrats did so well because of the tottering economy and impatience with the Iraq war.

Culturally, most Americans are still very conservative. They believe in God, personal responsibility, religious symbols on public property, voluntary school prayers, the right to bear arms, law and order, stiff punishment of criminals and curbs on Internet and TV smut.

Even Robinson’s fellow African Americans, who turned out so heavily for Barack Obama, voted against same sex marriage ballot propositions by 70 percent. That’s not repudiating conservatism.

South Carolina Gov. Mark Sanford has it right. He pointed out at the GOP Governors’ Conference last week that voters turned down Republicans, not conservatism.

“Republicans have campaigned on the conservative themes of lower taxes, less government and more freedom,” he said. “They just haven’t governed that way. America didn’t turn away from conservatism, they turned away from many who faked it.”

Indeed, many Republicans campaigned as conservatives and governed like Big Government liberals — not only in Washington, but in many of the states they controlled too. Sanford noted that in recent years state governments have grown faster and fatter than the federal government.

Did Republicans think voters were so dumb that they wouldn’t see the hypocrisy between what they said and what they did? Besides, it’s suicide to try to win elections by out-promising Democrats on handing out public largesse.

“So during our ‘time in the wilderness,’ it’s my hope that we go back to the basics of conservatism,” said Sanford, “what it stands for and its real-world implications for people’s lives. The sooner we do, the sooner we will see good policy from Republicans, and the sooner I suspect we will return to electoral favor.”

In short, Republicans must start practicing what they preach. Moreover, they must not let themselves fall into the trap of becoming a “cult of personality” party in order to please the TV gods who always prefer personality over substance. They did that with Ronald Reagan, but it’s worn off. Democrats did it with Bill Clinton, and it wore off too. Eventually, even Barack Obama will wear off. So Republicans must guard against glomming on to the first pretty face that comes along.

Sanford’s on the right track. And though he wouldn’t admit it, he may be looking to get on track to the presidency himself after his term expires in 2010. And if he does, you can be sure he’ll express the need for his party to get back to basics. Campaign on principles — conservative ideas that are true to the Constitution and our Founders’ vision. What the party needs in the years ahead are leaders with vision and substance built on a solid conservative base.

From the Monday, November 17, 2008 edition of the Augusta Chronicle

By Adam Gibson

November 17, 2008 9:06 AM | Link to this

This was the reply I got from GM on Friday:

“GM USA is closed on November 14th, 2008”

Why?

GM gave every UAW worker in the US the day off with pay to go DEER HUNTING!!!

Does that sound like a company in trouble? Ask Mr. Gettlefinger.

By Indy

November 17, 2008 9:08 AM | Link to this

The GOP is a corrupt party and the only path to reform is to throw out the perps.

It is truly sad that there are no provisions to recall a US Senator, otherwise the best move would be to launch a recall effort against Saxby Chambliss immediately after the run-off.

As it stands, suffering the damage that Martin can do is simply the price to pay for reforming the GOP and ridding it of this lousy traitor to any semblance of party principles.

By GT Rambler..

November 17, 2008 9:10 AM | Link to this

After attending a Chambliss rally today I’ve come to the conclusion that those of us who would like to hear at least some admission that Saxby’s own voting record, and not votes for the Libertarian, is responsible for him being in a runoff just isn’t going to be forthcoming. However, I do plan to vote for him and will encourage others to do the same only because I’m certain the alternative would be even more devastating for the country.

I believe that the most telling outcome of this runoff, regardless of how it turns out, is how our other Senator votes in the coming two years. I certainly hope he’s paying attention to the lack of enthusiasm GOP voters are showing. If he isn’t I believe there could/should be a challenger in the primary in 2010.

Real Republicans cut spending AND taxes.

By Ga Values

November 17, 2008 9:16 AM | Link to this

Ragnar Danneskjöld 9:05 AM

Here is what the WSJ thinks about Saxby’s National Sales Tax. Please read & rethink your support of Saxby the Socialist:

Former Arkansas Gov. Mike Huckabee’s unexpectedly strong second-place showing in the recent Iowa Republican straw poll is widely attributed to his support for the FairTax.

For those who never heard about it, the FairTax is a national retail sales tax that would replace the entire current federal tax system. It was originally devised by the Church of Scientology in the early 1990s as a way to get rid of the Internal Revenue Service, with which the church was then at war (at the time the IRS refused to recognize it as a legitimate religion). The Scientologists’ idea was that since almost all states have sales taxes, replacing federal taxes with the same sort of tax would allow them to collect the federal government’s revenue and thereby get rid of their hated enemy, the IRS.

Rep. John Linder (R., Ga.) and Sen. Saxby Chambliss (R., Ga.) have introduced legislation (H.R. 25/S. 1025) to implement the FairTax. They assert that a rate of 23% would be sufficient to replace federal individual and corporate income taxes as well as payroll and estate taxes. Mr. Linder’s Web site claims that U.S. gross domestic product will rise 10.5% the first year after enactment, exports will grow by 26%, and real investment spending will increase an astonishing 76%.

In reality, the FairTax rate is not 23%. Messrs. Linder and Chambliss get this figure by calculating the tax as if it were already incorporated into the price of goods and services. (This is known as the tax-inclusive rate.) Calculating it the conventional way that every other sales tax is calculated, with the tax on top of the price, yields a rate of 30%. (This is called the tax-exclusive rate.)

The distinction is confusing, but think of it this way. If a product costs $1 at retail, the FairTax adds 30%, for a total of $1.30. Since the 30-cent tax is 23% of $1.30, FairTax supporters say the rate is 23% rather than 30%.

This is only the beginning of the deceptions in the FairTax. Under the Linder-Chambliss bill, the federal government would have to pay taxes to itself on all of its purchases of goods and services. Thus if the Defense Department buys a tank that now costs $1 million, the manufacturer would have to add the FairTax and send it to the Treasury Department. The tank would then cost the federal government $300,000 more than it does today, but its tax collection will also be $300,000 higher.

This legerdemain is done solely to make revenues under the FairTax seem larger than they really are, so that its supporters can claim that it is revenue-neutral. But for the government to afford to purchase the same goods and services, it would have to raise spending by the amount of the tax it pays to itself. The FairTax rate, however, is not high enough to finance the higher spending it imposes. Therefore the proposal only works if federal purchases are cut by 30%, close to $300 billion — the increased cost imposed by the FairTax.

Similarly, state and local governments would have to pay the FairTax on most of their purchases. This means that it is partly financed by higher state and local taxes. It’s also worth remembering that state sales taxes now average 6%, which means that the total tax rate will be 36% on retail sales.

State sales taxes have long exempted all but a few services because of the enormous difficulty in taxing intangibles. But the FairTax would apply to 100% of services, including medical care, thus increasing their cost by 30%. No state comes close to taxing services so broadly.

Consumers would also find themselves taxed on newly constructed homes. Imagine paying 30% to the federal government on top of the purchase price of your next house.

Since sales taxes are regressive — taking more in percentage terms from the incomes of the poor and middle class than the rich — some provision is needed to prevent a vast increase in taxation on the nonwealthy. The FairTax does this by sending monthly checks to every household based on income.

Aside from the incredible complexity and intrusiveness of tracking every American’s monthly income — and creating a de facto national welfare program — the FairTax does not include the cost of this rebate in the tax rate. As noted earlier, the FairTax is designed only to match current revenues and does not cover any increased spending that it may require. Since the rebate will cost at least $600 billion the first year, either federal discretionary spending would have to be cut by 60% or the rate would have to be five percentage points higher than advertised.

Rejecting all the tricks of FairTax supporters and calculating the tax rate honestly — by including the higher spending that it mandates and by being realistic about what could actually be taxed — professional revenue estimators have always concluded that a national retail sales tax would have to be much, much higher than 23%.

A 2000 estimate by Congress’s Joint Committee on Taxation found the tax-inclusive rate would have to be 36% and the tax-exclusive rate would be 57%. In 2005, the U.S. Treasury Department calculated that a tax-exclusive rate of 34% would be needed just to replace the income tax, leaving the payroll tax in place. But if evasion were high then the rate might have to rise to 49%. If the FairTax were only able to cover the limited sales tax base of a typical state, then a rate of 64% would be required (89% with high evasion).

I’ve emphasized problems with the FairTax rate because public opinion polls have long shown that support for flat-rate tax reforms is extremely sensitive to the proposed rate, with support dropping off sharply at a rate higher than 23%. But there are also massive technical and administrative problems with collecting all federal taxes at the checkout counter and relying entirely on state governments to collect the federal government’s revenue.

Among the problems: What possible incentive would the states have to be vigorous in their federal tax collections? What is to stop them from slacking off and giving their citizens a tax cut at federal expense? What about states with no sales taxes? What’s to stop people from bypassing retail outlets and buying their goods from producers or at wholesale, tax-free?

Perhaps the biggest deception in the FairTax, however, is its promise to relieve individuals from having to file income tax returns, keep extensive financial records and potentially suffer audits. Judging by the emphasis FairTax supporters place on the idea of making April 15 just another day, this seems to be a major selling point for their proposal.

Yet all but six states now have state income taxes. So unless one lives in one of those states, this promise is an empty one indeed. In short, the FairTax is too good to be true, and voters should not take seriously any candidate who supports it.

Mr. Bartlett was deputy assistant secretary of the Treasury for economic policy from 1988 to 1993.

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

By getalife

November 17, 2008 9:17 AM | Link to this

gop to Detroit- Drop dead. Good for them.

Congress is back to throw our money at bad decisions.

Rewarding failure is not change, that was gop.

By 3 Jack

November 17, 2008 9:20 AM | Link to this

there is no vote ‘for’ saxby, just a vote against a filibuster proof senate.

this lame argument is reliant upon the ludicrous notion that saxby chambliss is a solid fiscal conservative voter which is just not the case. check any of the fiscal conservative groups that grade senators, none have him rated highly.

saxby represents the problem conservatives need to eradicate. instead of letting another rino slide, let’s make this election the turning point where fiscal conservatives let it be known there is a new day dawning with conservative voters holding their elected officials accountable. to do otherwise only continues the gop decline into complete irrelevancy.

By AmVet

November 17, 2008 9:20 AM | Link to this

The corporate destruction of capitalism.

And for a decade or more, in spite of the mountains of evidence detailing the enormous impending dangers, the sheep and talking heads such as our yellow journalist here, actually cheered on the hyper-corrupted plutocracy, the “captains of industry” and the robber barons on Wall St. and K Street. After all, it didn’t affect them directly, so it seemed, and who gives a trickle-down, rat’s azz about anyone else?

It is identical to the situation with global warming and numerous other critical policy challenges facing us, the ostriches and the “fiscal conservatives” in the reactionary ranks, don’t want to know about it.

So, yes, by all means, lets get rid of even MORE of that “unnecessary” and evil government regulation like our Hero f the Texas ANG did when he gutted the SEC’s corporate oversight and policing efforts after promising in his first campaign to crack down on the corporate crooks.!

The new GOP - the party of no accountability. And the new Democrats - the party of no spine.

Their intentional ignorance, outright stupidity and tacit approval has come home to roost. And now their children and their grandchildren are going to get to pay for it.

Heads should roll. And there should be a lot of these corporate criminals and their paid-off lackies in Washington doing time.

AND footing the bill.

But guess how this is going to turn out?

By Joe

November 17, 2008 9:21 AM | Link to this

If you re-elect Chambliss now, your entire party will be too weak to defeat him in 5.5 years. If you re-elect him today, you are stuck with him until he is tired of you.

By Will Bennett

November 17, 2008 9:22 AM | Link to this

I’ve had enough of this pragmatic nonsense and fear-mongering. Where have those things gotten us? They have gotten us career politicians like Saxby Chambliss who obviously care more about staying in power than doing the will of the people who elected him. I will be happily voting my conscience which means a vote against Saxby. I’m sick of being threatened with all the possible worst-case “what if’s” if I don’t vote for the right guy. I’m not saying that I agree with everything (or even anything) that Jim Martin says. But we really don’t know how he will vote once in office. However, we know EXACTLY how Saxby Chambliss will vote and THAT is reason enough to vote against him.

By Game Fan

November 17, 2008 9:24 AM | Link to this

Saxby Chambliss is as much a symptom as a cause. Hopefully sooner rather than later conservatives will start to realize that COR-POR-ATIONS are starting to call all the shots. And our “representatives” are nothing more than well-paid actors.

By AmVet

November 17, 2008 9:29 AM | Link to this

He did challenge Cleland’s judgment, legitimately.

“A lie told often enough becomes truth” Vladimir Lenin.

By Brent

November 17, 2008 9:37 AM | Link to this

I am proud to have voted FOR Allen Buckley , and I will happily put up with two more weeks of ads to vote AGAINST Saxby on December 2nd.

For any of you in doubt here in Georgia, remember that your senior Senator did the following:

Voted FOR the bailout……… Voted FOR the farm bill……….. Was among the Gang of 10 energy……….. boondoggle, raising taxes after taking the “no tax pledge”. Voted FOR the FISA bill……… Voted FOR subsidies for “clean” energy…. Not present to vote to honor fallen soldiers in Iraq and Afghanistan (but was able to vote on other bills the same day)………. Voted TO allow telecoms to keep immunity for spying……… Only Senator NOT TO VOTE on habeas corpus for those held at Guantanamo Bay………… Voted FOR mixed-gender only marriage…….. Voted TO re-authorize the Patriot Act……… Those ten things all happened in the last two years alone, and that’s a lot of things I disagree with, so I will be voting for Jim Martin.

By findog

November 17, 2008 9:49 AM | Link to this

The sad truth is this is about busting unions. Sure if we still had one of the three plants that used to make cars here in Metro-Atlanta more people would be claiming that it is imperative that we keep Doraville, East Point, and Lakewood plants open, but they are gone and so is our concern for their fortunes. The same was said about the aerial refueling tankers and other aircraft that might be made in part at the Cobb Facilities; same imperative of national vitality. But this for Republican’s is payback to the unions, just like minimum wage hikes being stopped because that was an immediate increase to over-paid union members, their contracts requiring a matching boost to any minimum wage increase.

If Obama is smart he’ll trade Card-Check for the American Automobile Industry bailout and he will tack a heavy burden to restructure their fleets to meet our national security interests. Even bolder would be to nationalize all retiree health benefits as a significant step toward single payer sanity. But then what do I know I’m a middle management engineer…

By Redneck Convert

November 17, 2008 9:56 AM | Link to this

Well, as a godly Republican, I don’t give a hoot how many people get throwed out of work when the auto makers go bust. It will put us one step closer to getting back into power. See, I figure the 4 million or so that lose their job when the auto makers fold will blame the librul Democrats for what happens. By the time it happens, the libruls will be in charge of the White House and Congress.

Course, I got to admit we will be in a awful way if another war breaks out and we need to get all kind of tanks and planes made. Maybe China or Russia will make them for us. We’ll get it done on credit, the way we do now with everything, because it don’t cost us nothing.

There’s plenty of jobs for Walmart greeters, and the people throwed out of work will be able to get them. This weekend I went into a Walmart and the greeter couldn’t even understand English and tell me where they’d moved the white socks. With all the people out of work, we won’t have to put up with that no more.

Anyhow, it’s about time the union thugs got what’s coming to them. Including the people that retired and draw health benefits from the auto makers. Pretty soon we’ll all be zipping around in a little Jap or German auto. I’ll miss my Ford F-450, but it will be worth it to see all those bums out of work and hollering about it. We got to have Free Innerprize, even if it drives us into the poorhouse. Except for the big banks and stock cos. They got all the money of the rich people, and we can’t have Trickle Down if they lose their shirt.

By Ragnar Danneskjöld

November 17, 2008 10:12 AM | Link to this

Good morning, Ga Values. I do recall Mr. Bartlett’s essay on the Fair Tax. I found it unpersuasive then (and now) as it addresses only the fine points of implementation, and not the larger issues of equity and efficiency. The current income tax system compels 100 million Americans to spend – that uncompensated expense is a hidden burden on the economy, and is totally relieved with the Fair Tax. The much smaller need for audit reduces the nanny-state intrusion into literally millions of individual lives, and otherwise practically eliminates incidents of fraud. With an exponentially smaller collection force and an immeasurably smaller burden on the individual taxpayers, the government retrieves essentially the same revenues.

The core economic problem from the income tax is that it erodes wealth. Aggregate private wealth is the “wealth of nations.” The income tax inherently reduces wealth. Every dollar of income is used in one of two ways: (1) consumption, or (2) savings. Every dollar that goes into savings adds to national wealth. The income tax is imposed equally on both consumption and savings. Our abysmal national savings rate, and thus capital formation, is enhanced by elimination of the tax on savings.

While I am not married to the Fair Tax in particular, I see that as a great improvement over the current system, both for simplicity, and efficiency, and for mitigation of adverse macroeconomic effects.

By Dusty

November 17, 2008 10:15 AM | Link to this

Well, as you may have noticed, paid Demo bloggers have used my name to further their job for Martin, that after a long paid tirade from Churchill about Sarah Palin who is obviously at the top of lib smear list.

I WILL VOTE FOR CHAMBLISS BECAUSE WE NEED HIM IN CONGRESS.

Since the subject of the day if bailing out the auto industry, I have to agree with Wooten. It makes me sad because I enjoy my GM car which has never given me any trouble, looks great and gets good mileage.

But…if we bail out one industry it only follows that we SHOULD bail out all industries in trouble. Thus we would have business run by government. It also means that taxpayers would not be running their lives but spending their money running the business of government owned projects.

DO YOU WANT CONGRESS RUNNING AMERICAN INDUSTRY? NO!

DO YOU WANT OBAMA RUNNING AMERICAN INDUSTRY? NO!

DO YOU WANT FOREIGN COUNTRIES RUNNING OUR INDUSTRIES? NO!

We want Americans running their own American industries. If they cannot do it, let other Americans then try.

In the meantime, Americans may have to “bite the bullet” in order to correct deficiencies. That may be necessary to save the integrity of America, i.e. NO SOCIALISM. So let us remember: NO SOCIALISM FOR AMERICA. SAVE CONGRESS BY VOTING FOR SAXBY CHAMBLISS.

Attention BLOGGERS: Paid Democratic bloggers are using other blogger’s names to get their goals. Lies do not bother them. Be aware that the ID you see may be used by those without ethics, not the REAL PERSON to whom that ID belongs.(Wooten let’s imposters post here. Freedom of speech is awarded to liars also.)

By Ragnar Danneskjöld

November 17, 2008 10:16 AM | Link to this

Dear GA Values @ 9:16, I just noticed an omission in my tome, the line should have read: “The current income tax system compels 100 million Americans to spend countless hours preparing even simple information forms, without regard to effort expended in ascertaining the legal obligations under the tax code - …” And I forgot to mention the incentive for lobbyists to push for exclusions and deductions under the current codes.

By Disgusted

November 17, 2008 10:19 AM | Link to this

The core economic problem from the income tax is that it erodes wealth. Aggregate private wealth is the “wealth of nations.” The income tax inherently reduces wealth. Every dollar of income is used in one of two ways: (1) consumption, or (2) savings. Every dollar that goes into savings adds to national wealth.

So a national sales tax does not also reduce wealth? Or is it your assumption that the Fair Tax as a replacement for the income tax would shift the burden to the lower classes, so that the wealthier among us would be able to save even more?

By Dusty

November 17, 2008 10:21 AM | Link to this

RedNeck, you better watch your satire. If all our businesses go flat you may not get paid for your undercover work as a lib agent. Then you won’t even need white socks. You’ll be running barefoot to the soup kitchen.

By deegee

November 17, 2008 10:23 AM | Link to this

We are still pouring billions into the coffers of AIG. What’s the problem with allocating $25 billion of the $750 billion already allocated to the big 3? As long as they accept a bankruptcy type of reorganization as a part of the deal, then I don’t see a problem with it. The automakers sold trucks and cars that were in demand up until recently when the price of oil shot sky high. Whose fault is that?

If our government had a leader with a vision, he or she would have guided the industry toward a sense of responsibility instead of letting them get drunk at the party. The government is as much to blame as the management. The workers are in the trenches. It’s up to the generals to set the strategy, and they failed us.

By Soothsayer

November 17, 2008 10:24 AM | Link to this

“…even when they’ve simply missed their market or, as in the case of the Detroit-based auto industry, they’re functioning with a marketplace model that’s broken.”

WHOA! Wait just a minute! Just a few short months ago Republicans were lining up to buy the lumbering behemoths Detroit was producing. In fact, “bigger was better.” Especially with the IRS footing some of the bill.

Even now the status symbol is a monster Escalade with tricked out wheels. And, now that gas has fallen I’ll bet you see the “monster trucks” making comeback. Let’s face it: Detroit has been producing what we want to buy. I say that figuratively, I wouldn’t dream of buying any SUV.

All of you here want to vilify the unions. Have you ever worked on the line at an assembly plant? Imagine working straight through your entire shift where even a restroom break requires someone to replace you. Would you be willing to do it for $14.00 an hour ($28,000/yr)? Or would you want $28 an hour ($56,000/yr)? The difference is that one is a living wage and the other is not. Would you be willing to work there without any kind of retirement program? I’ll be not.

I know people who have worked on the line and I can tell you it “uses them up.” It is hard, difficult work.

By DebbieDoRight

November 17, 2008 10:28 AM | Link to this

Wooten: or whether the U.S. is on a high-speed rail to socialism.

Did you remember to take your meds today? Obviously not. I am honestly beginning to believe ALL repuglicans are stone cold crazy!! They’d rather see millions of people out of work; they’d rather see auto makers go down the tubes; they’d rather see states go bankrupt trying to provide unemployment insurance, schools, bridges, and roads; they’d rather all these things to happen before they give ONE THIN DIME to stop it!!

Give the money to the auto industry — put conditions on it and charge them interest, (like we should have done with Wall Street/AIG), do whatever it takes to stop AMERICA from going down the drain; for once repuglicans, think of someone or something other than your own self interests!!!

And Wooten, don’t forget your meds for Dementia, ummm……maybe I should make that statement to your keepers. Sorry.

By Ragnar Danneskjöld

November 17, 2008 10:32 AM | Link to this

Dear Disgusted @ 10:19, “So a national sales tax does not also reduce wealth?” Right, it is imposed purely on consumption. People can control their tax expenditures by spending less, saving more.

By bearcasey

November 17, 2008 10:33 AM | Link to this

No bail out for the AJC when it goes under. Then, Wooten can get a right wing REAL JOB!

By Ga Values

November 17, 2008 10:35 AM | Link to this

Ragnar Danneskjöld 10:12 AM

I guess you think a drunk congressman/Dentist and a can’t make it as a lawyer talk show host know more than Allen Buckley & Dan Bartlett. You have now reduced yourself to the level of Dusty. You should have watched the debates, it was obvious that Saxby the Socialist did not have any idea about a flawed theory that he had entererd into legislation.

By Ragnar Danneskjöld

November 17, 2008 10:41 AM | Link to this

Dear GT Rambler @ 9:10, I agree with your entire argument. Attention, Johnny.

Dear Disgusted @ 10:19, a follow up, on your other postulate: “Or is it your assumption that the Fair Tax as a replacement for the income tax would shift the burden to the lower classes, so that the wealthier among us would be able to save even more?” We’ll ignore for the moment your assertion that the burden would be “shifted” – I think that false, and will address in due course - and go straight to the ethics of taxation.

How shall we tax rich people? You assert that income is income, and all should be taxed equally. I think there are two types of rich people, those who save and reinvest in the economy, and live the Sam Walton lifestyle, and in contrast those who spend all the money they can get their hands on, and for the most frivolous purposes, i.e., for want of a better example, the Paris Hilton lifestyle.

Hypothetical: entrepreneur A earns $10 million per year, but lives the life of a cloistered monk, saves every dime he has and reinvests in the economy, or even better donates tons of money to charity. Starlet B earns $10 million per year, gets drunk every night at Hollywood parties, blows money on the wild life, saves nothing, gives nothing to charity. Shall we tax these two people equally? Under the income tax, the answer is “yes.” Under the Fair Tax, the answer is “no.”

I think your assumption that the tax burden would be shifted to the poor is untrue simply because rich people spend more money. Within every income class there would be a precipitous shift in taxation, from the frugal and the pious to the conspicuous consumers. I do not see that as a bad thing

By Ragnar Danneskjöld

November 17, 2008 10:45 AM | Link to this

Dear GA Value @ 10:35, your cultism is showing. “I guess you think a drunk congressman/Dentist and a can’t make it as a lawyer talk show host know more than Allen Buckley & Dan Bartlett.” If an idiot says something intelligent, and a genius says something stupid, I am not inclined to magnify the stupid idea of the genius. That, of course, is the practice of leftism.

By Ga Values

November 17, 2008 10:46 AM | Link to this

Ragnar Danneskjöld 10:16 AM

Here’s Fact Check’s take on Saxby’s National Sales Tax::

Unspinning the FairTax May 31, 2007 We look at the numbers behind the numbers. Summary In our recent article on the second GOP debate, we called out Gov. Mike Huckabee as well as Reps. Tom Tancredo and Duncan Hunter for their support of the FairTax. We wrote that the bipartisan Advisory Panel on Tax Reform had “calculated that a sales tax would have to be set at 34 percent of retail sales prices to bring in the same revenue as the taxes it would replace, meaning that an automobile with a retail price of $10,000 would cost $13,400 including the new sales tax.” A number of readers pointed out that H.R. 25, the specific bill mentioned by Gov. Huckabee, calls for a 23 percent retail sales tax and not the 34 percent used by the Advisory Panel on Tax Reform. That 23 percent number, however, is misleading and based on some extremely optimistic assumptions. We found that while there are several good economic arguments for the FairTax, unless you earn more than $200,000 per year, fairness is not one of them.

Update June 14: In a letter, Americans for Fair Taxation wrote to say that it disagrees “very strongly” with FactCheck’s analysis of the FairTax. For their objections and our response, see the end of the “Analysis” section. Analysis How to Make 30 Look Like 23

Americans for Fair Taxation offers the following plain-language interpretation of H.R. 25:

Americans for Fair Taxation: A 23-percent (of the tax-inclusive sales price) sales tax is imposed on all retail sales for personal consumption of new goods and services.

It is the parenthetical that is important, for it hides the real truth of the tax rate.

First consider the way in which sales tax is normally figured. A consumer good that carries a $100 price tag might be subject to a 5 percent sales tax. That means that the final bill for the item is $105. The 5 percent figure is the amount of tax that is charged on the original purchase price. But now suppose that instead of pricing the item at $100, the shop owner simply priced the item at $105, then sent $5 directly to the state. The $105 price would be a tax-inclusive sales price. But $5 is just 4.8 percent of $105. That 4.8 percent number, however, is relatively meaningless. You are still paying exactly the same 5 percent tax on the item.

The 23 percent number in H.R. 25 is the equivalent of the 4.8 percent in the previous example. To calculate the real rate of the sales tax, we have to determine the original purchase price of an item. We can begin with the same $100 item, keeping in mind that a price tag that reads $100 has sales tax already built in. If our tax rate is 23 percent of the tax-inclusive sales price, then of the $100 final price, $23 of those dollars will be for taxes, meaning that the original pre-tax price of the item is $77. To get $23 in taxes on a $77 item, one must impose a 30 percent tax. In other words, a 23 percent sales tax on the tax-inclusive sales price is equivalent to a 30 percent tax on the actual price of the item.

FairTax proponents object to the 30 percent number, claiming that critics use the larger number to frighten people. Americans for Fair Taxation claims that it uses the tax-inclusive number to make it easier to compare the FairTax to the income tax that it will replace (since most of us think of income tax rates on an inclusive basis). But we are not accustomed to thinking of sales taxes inclusively. The result is that many FairTax supporters (about 15 percent of those who wrote to us, for example) do not understand that the 23 percent figure is tax inclusive.

Our analysis of the FairTax used a figure of 34 percent as the basic exclusive tax rate. One e-mailer complained that our number was at least 10 percentage points “higher than [the FairTax] is” because we calculated it as an addition to retail prices. But our 34 percent number is not 10 percentage points higher than the legislation. A 34 percent exclusive number is equivalent to a 25 percent tax inclusive rate – only 2 percentage points higher than the FairTax bill. We think that, intentional or not, the use of the tax-inclusive 23 percent rate has misled a lot of FairTax proponents.

But 30 Is Not 34 Either

Americans for Fair Taxation, however, has complained that H.R. 25 calls for a 23 percent inclusive (or 30 percent exclusive) rate, not a 34 percent rate. Our number came from the President’s Advisory Panel on Tax Reform, which calculated that a 34 percent rate on the actual price of consumer goods would be necessary to make the program revenue-neutral. Americans for Fair Taxation has said that the Advisory Panel did not use the FairTax as detailed in the legislation but instead made up its own plan. This complaint is disingenuous. The Advisory Panel did in fact begin with the 30 percent figure that proponents of the FairTax submitted. But the panel rejected those figures, claiming that they were based, at least in part, on the unrealistic assumption that there would be full compliance with the FairTax. In other words, proponents assume that no one will cheat on taxes. However, the Treasury Department estimates that the evasion rate for the entire U.S. tax system under current law is approximately 15 percent. The Advisory Panel accordingly assumed a 15 percent evasion rate for the FairTax.

More significantly, however, the panel found that FairTax supporters were employing questionable accounting. In calculating federal revenue, proponents assumed that purchases made by the federal government would be taxed at the full 30 percent rate. But when calculating federal expenditures, FairTax proponents did not factor in the additional costs of the 30 percent sales tax. The Advisory Panel thus threw out the revenue from federal purchases, noting (correctly) that increased revenue from taxing federal purchases is exactly canceled by increased costs in the federal budget. Unfortunately, the Advisory Panel has thus far refused to release its methodology, making it difficult to reconcile its projections with those of Americans for Fair Taxation.

Using a formula that corrects for the faulty assumption about government spending, William Gale, director of the economic studies program at the Brookings Institute, calculates that a 39.3 percent exclusive rate would be necessary for revenue neutrality. (We used the lower Advisory Panel number). A more recent study by FairTax supporter and Boston University economist Laurence Kotlikoff – working from Gale’s formula and adopting the same basic assumptions – determines that a 31.2 percent exclusive (or 23.8 percent tax-inclusive) rate would be sufficient.

Even if Kotlikoff is correct that a 31.2 percent rate is revenue-neutral, there remains some reason to doubt that the rate actually would be that low. The FairTax proposal assumes a 100 percent tax base on consumption. By way of contrast, most states that have sales taxes have roughly a 50 percent tax base. With the FairTax’s 100 percent base, consumers would pay taxes on a great many things that may not intuitively seem like consumption. The list would include:

Purchases of new homes Rent Interest on credit cards, mortgages and car loans Doctor bills Utilities Gasoline (30 percent in addition to current taxes, which would not be repealed) Legal fees At today’s prices, gasoline would cost almost $1 per gallon more. A $150,000 new home would run $195,000 – plus the 30 percent tax that the buyer would pay on the interest on the mortgage. In short, the FairTax taxes everything that one buys, with the one notable exception of education. Any exceptions to the tax base (for instance, eliminating rent or credit card interest from the tax base) would require an offsetting increase in the rate.

But the FairTax Will Lower Prices

Proponents of the FairTax point out that prices on consumer goods contain what are called “hidden taxes.” Under current law, corporations have to pay taxes on their earnings. Moreover, businesses have to pay social security taxes for each employee. The money to pay these taxes has to come from somewhere, and FairTax supporters argue that the cost is passed on to the consumer. In fact, the best-known proponent of the FairTax, talk-show host Neal Boortz, argues that 22 percent of the price of a consumer good is really a “hidden tax.” Get rid of corporate and social security taxes, Boortz argues, and consumer good prices would drop by 22 percent. Even with the 23 percent FairTax, prices stay the same, and with the elimination of income taxes, paychecks will get bigger. Everyone gets a raise and the federal government still gets its revenue. About 10 percent of the e-mail messages we received from FairTax proponents trumpeted this kind of magic act. It is easy to understand the confusion on the issue, as Boortz himself made similar assertions in the hardcover edition of his book. (He later issued a corrected version in paperback.)

A bit of critical analysis shows that this cannot be right. The FairTax is revenue-neutral. That means that for every tax dollar collected under the current system, the FairTax has to collect a dollar. If the FairTax exactly equaled embedded taxes, then it could not possibly be revenue-neutral, since embedded taxes do not take into account personal income or estate taxes. The FairTax rate would have to be high enough to replace embedded taxes plus income and estate taxes.

Chris Edwards, the Cato Institute’s director of tax policy studies, points out that prices do not really matter; corporate, payroll, income and estate taxes currently generate approximately $2.4 trillion, and a revenue-neutral FairTax would still require that taxpayers pony up $2.4 trillion. Nor is it clear that the 22 percent embedded tax figure is particularly meaningful. David Burton, chief economist of the Americans for Fair Taxation, calls it “simplistic” to think that the entire cost of corporate taxes is borne by consumers. Cato’s Edwards suggests that while consumers do pay at least part of the costs, producers also bear some of the burden. That is, employees pay part of the costs of hidden taxes (in the form of lower wages), and corporate shareholders pay another portion (in the form of lower returns on their investments).

The FairTax: Is It Regressive?

Sometimes sales taxes are called regressive, meaning that the poorest pay higher rates than the wealthy. Strictly speaking, sales taxes are flat, since everyone pays the same rate. But because the poor tend to spend a high percentage of their income on basic consumer goods such as food and clothing, sales taxes do require the poor to pay a higher percentage of their income in taxes.

The FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a “prebate,” which Edwards calculates to be about $5,600 annually. The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending. Americans for Fair Taxation disputes the Treasury Department numbers, claiming that the actual cost would be closer to $485 billion per year. The Treasury Department has so far refused to release its methodology, making it difficult to determine whose estimate is correct.

Who Really Pays?

With the prebate program in effect, those earning less than $15,000 per year would see their share of the federal tax burden drop from -0.7 percent to -6.3 percent. Of course, if the poorest Americans are paying less under the FairTax plan, then someone else pays more. As it turns out, according to the Treasury Department, “someone else” is everybody earning between $15,000 and $200,000 per year. The chart below compares the share of the federal tax burden for different income groups under the current system and under the FairTax. Those in the highest and the lowest brackets will see their share decrease, while everyone else will see their share of taxes increase.

Americans for Fair Taxation rejects the Treasury Department analysis, objecting that Treasury considers only the income tax. By leaving out payroll taxes (which are actually regressive) Treasury’s chart makes the FairTax look worse by comparison. We found that including all the taxes that the FairTax would replace (income, payroll, corporate and estate taxes), those earning less than $24,156 per year would benefit. AFT’s Burton agreed that those earning more than $200,000 would see their share of the overall tax burden decrease, admitting that “probably those earning between $40[thousand] and $100,000” would see their percentage of the tax burden rise.

Why Be Progressive?

It is easy to look at charts like the one above and dismiss the FairTax as simply another way to help the rich get richer. But there is an economic argument for a less progressive tax system, though that argument is extremely technical. Kotlikoff has asserted that the FairTax will lower the marginal tax rate for all earners. (The marginal rate is the tax rate paid on the last dollar earned.) Because marginal rates are lower, each extra dollar of income will result in greater purchasing power. The decrease in marginal rates is progressive – that is, marginal rate reductions are greater for the working- and middle-classes than for the wealthy.

Moreover, even FairTax critics like Gale agree that consumption taxes increase the size of the economy. Many studies show that long-term incomes would rise under a consumption-based tax system. Optimistic accounts show a 10 percent rise in income over time, but even the more cautious studies show gains of 5 percent to 7 percent. Because the FairTax will grow the economy, workers will eventually see increases in their income. FairTax proponents claim that the growing economy, coupled with the reduction in marginal tax rates, will offset the increased tax burden. Burton argues that “the FairTax is a positive-sum game,” one in which purchasing power will grow faster than the tax burden. The size of any such gains is disputed, however; Americans for Fair Taxation consistently chooses from among the most optimistic growth projections.

Upon Further Review

We stand behind our earlier analysis of the FairTax. The proposal to which Gov. Huckabee referred is not a 23 percent tax, but rather a 30 percent tax. And it is revenue-neutral only through an accounting trick. It will collect more money from those earning between $15,000 and $200,000 per year and less from those earning more than $200,000 per year. It is possible that the FairTax would make most people better off, but much of that gain would be a direct result of making the tax code less fair.

• by Joe Miller

Correction, May 31: In the Analysis portion of our original story we stated that “Taxpayers with very low incomes would receive a ‘prebate’.” In fact, all taxpayers would receive the prebate for sales taxes on purchases up to the poverty level.

Update June 14: Americans for Fair Taxation wrote us to say that the organization disagrees “very strongly” with FactCheck’s analysis and that we have “uncritically accepted many misleading arguments” made by FairTax critics. As a courtesy to AFT, and as a service to our readers, we are posting the letter in our “Supporting Documents” section. We stand by our article, and our comments on AFT’s letter are below.

Our mission at FactCheck.org is not to rule on issues of public policy but rather to reduce the level of deception and confusion in U.S. politics. We found that, whatever Americans for Fair Taxation’s intentions, there remains much confusion about the FairTax.

AFT disputes our conclusion that the 23 percent number is misleading. We stand behind it. Sales taxes, as AFT notes, “are almost always expressed in an ‘exclusive’ manner,” which in our view makes 30 percent the logical figure to use when describing the FairTax.

We don’t actually call the FairTax “regressive,” as AFT implies that we do. We reiterate, however, that those earning between $15,000 (or perhaps as much as about $24,000 – see our addition to the “Who Really Pays” portion of our article above) and $200,000 per year – virtually all middle-class Americans – would pay a higher share of the tax burden under this proposal. Those earning more would see their share drop, as even AFT economists admit.

We did not ignore Americans for Fair Taxation’s research. Much of that research is publicly available and is listed among our sources. We do, however, approach all evidence with a healthy skepticism – including research that is funded by the very group whose claims we are investigating. Where possible we rely upon neutral sources, such as the bipartisan President’s Advisory Panel on Federal Tax Reform, and on opinions from third-party scholars from think tanks like the Brookings Institution and the Cato Institute.

By Ga Values

November 17, 2008 10:48 AM | Link to this

Here is the link to the Fact article so you can see the graphs..

http://www.factcheck.org/taxes/unspinningthefairtax.html

By speak softly and carry a big stick-VOTE MARTIN

November 17, 2008 10:49 AM | Link to this

FREE ENTERPRIZE does not have bail-outs. -BUSH STARTED ALL THIS BAIL-OUT SOCIALISM, snd SAXBY CHAMBLISS supported it every step of the way.REPUBLICANS have convinced DEMOCRATS that ther is nothing SOCIALISTIC about BIG CORPORATIONS NOT PLAYING BY the same rules.WOOTEN wants to blame this on the Unions, the working class and not the Crooked CEO’S and POLITICIANS.

By findog

November 17, 2008 10:49 AM | Link to this

Adam @9:06 Most mega corporations give employees three or four personal days off, which are not a part of the banking holiday scam, with a specific clause that they can pick one. However, how your query would go unanswered if only the UNION workers got it off is a tad suspect. I assume you are a self-hating closet tree hugger with latent gun confiscation fantasies…

By Soothsayer

November 17, 2008 10:50 AM | Link to this

FairTax proponents:

Go back a research the 10% excise tax on luxury yachts imposed on new yachts in the 80s. If you had to guess, what do you think happened to sales of new yachts? You’re exactly right, no new yachts were sold. All but a few boat builders went out of business.

Like today’s economic state of affairs? How would you like a permanent economy like what we have now? Remember the FairTax only applies to new homes and automobiles. What do you think that will do to homebuilding and the auto industry?

If you bought a $200,000 new home under the FairTax, you would owe $60,000 in FairTax on that home. If you went down the street and bought a home that was a resale you would owe nothing. Let’s say you just had to have the new home. Your mortgage lender says he will finance 95% of the appraised value of the new home. Now you have to come with $70,000 ($60,000 FairTax + $10,000 down payment) cash to buy that home.

Friends, if you can’t see the folly in this you’re delusional.

By reebok

November 17, 2008 10:55 AM | Link to this

Saxby will win, but I’ll stand in the cold if necessary for the privilege of voting against him.

By Peter

November 17, 2008 10:57 AM | Link to this

Well Jim………..Today I agree with you, why bail out all of America’s failing industries….?

Good thing they had the same Vision as George Bush…….heck he never ever made them create cars and trucks that got better Miles Per Gallon…….

The Bush family would have suffered then…….So they deserve the same fate as American’s who actually voted for George Bush……..

Problem is when George took America Down……..All American’s are now Suffering, not just the folks with the “Same Vision” as Bush !

By Wee Willy

November 17, 2008 11:03 AM | Link to this

Am I the only one who thinks that there is a concerted effort by professional Democrat bloggers on this space and others? Is that one reason why Oblama won the election? If so, maybe the Republicans can take a clue on how to organize and use the internet to their favor next election. God knows they sure didn’t have a clue this election.

As concerns the original topic of this article (I am not sure how it became a Saxbe Chamblis article), I am with Neil Cavuto of Fox Business News who suggested that the initial requirement for any company to come to Washington for a bailout is that the first job to be eliminated is the current CEO (and subsequently the top management team) since they were the ones who guided the company into the financial situation requiring a bailout in the first place. Obviously their business plan was either flawed or their engaged in financial malfeasance. In either case, they need to be replaced. No CEO job, no CEO parachute would be the first requirement. Then let’s see how many companies truly want a bailout. I’ll bet it will slow down….you think?

By Ga Values

November 17, 2008 11:07 AM | Link to this

Here’s what the Brookings Institute got when they checked out Saxby’s National sales tax. I read & understand what they are saying, so it can’t be that hard to understand

http://www.urban.org/UploadedPDF/1000785TaxBreak_5-16-05.pdf

By Ga Values

November 17, 2008 11:12 AM | Link to this

Ragnar Danneskjöld 10:45 AM

I actually know John which helps with my evaluation.. try again after you have read the Brookings piece.. My wife is gone so I have to cook lunch..

By Glenn

November 17, 2008 11:13 AM | Link to this

American auto manufacturing will never die. Heck, even the Greedheads in mgt. and their opposite-numbers, the moribund unions, couldn’t kill it — and they’ve all been trying for two generations. And some of them were good people, doing the best they could to kill off Detroit, just so’s they’d win the colors to take home and brandish like a scalp over the frontyard flagpole the neighbor’s dog p** on every morning just before marking the daily paper that brings news of the neverending ending of Detroit.

By Ragnar Danneskjöld

November 17, 2008 11:19 AM | Link to this

Dear GA Value @ 10:46, you posted 2,800 words that do not address my argument. Irrelevance notwithstanding, please be considerate of our fellow bloggers. Volume does not prove superiority. If GGG is offended by my 700 word essays of original thought, think how he will react to your cut and paste!

Dear Soothsayer @ 10:50, you argue that the current market bias created by the income tax is better than the market bias that would be created by the national sales tax, but you don’t way why. Epithets aside, why?

By Abac

November 17, 2008 11:21 AM | Link to this

I would hate to see Georgia without a Democratic Senator in Washington when we are headed into the worst recession of our lifetime. When times get bad Georgia is going to need all the help it can get! South Carolina got a Democratic Senator and will probably get ten times the money that Georgia will get!

When you got the Democrats running everything in Washington you better have a Democrat Senator to deal with them. Sorry Saxby! But the writing is on the wall! If Mccain had won I’d have voted for you!

By Glenn

November 17, 2008 11:21 AM | Link to this

Hey, great new filter y’all got here, ayatollahs. Can’t post the word “P”, which word, by the way, is the transliterative spelling of the letter itself. You’ve gone from literate to semi-literate to illiterate to aliterate to anti-literate in fewer than six months. Congratulations! You now have standing to criticize NSA and their supposed violations of our own rights to literacy and orality.

Whaddabuncha Ma-roooooons!

By Ragnar Danneskjöld

November 17, 2008 11:21 AM | Link to this

Dear GA Value @ 10:46, you posted 2,800 words that do not address my argument. Irrelevance notwithstanding, please be considerate of our fellow bloggers. If GGG is offended by my 700 word essays of original thought, think how he will react to your cut and paste!

Dear Soothsayer @ 10:50, you argue that the current market bias created by the income tax is better than the market bias that would be created by the national sales tax, but you don’t way why. Epithets aside, why?

By Saxby stole my Social Security

November 17, 2008 11:22 AM | Link to this

Saxby’s Gang of 10 Traitors has helped elect OBAMA. His vote for the $700,000,000,000.00 Wall Street Bailout with an added $153,000,000,000.00 of pork was done after he got over $2,000,000.00 from LOBBYIST. Saxby worked with Pelosi, Reid, Boxer & Kennedy on the ILLEGAL AMNESTY Bill & to over ride President Bush’s Veto of the PORK filled Farm Bill. If this is what our country needs we are in deep trouble.

By LOBBYIST FOR SAXBY

November 17, 2008 11:24 AM | Link to this

During the last 8 years Republican Congressmen tried to fix the Freddie Mac and Fannie Mae mess but they were blocked by Barney Frank and Chris Dodd. The Wall Street’s Paulson along with Frank And Dodd wrote the $700,000,000,000.00 bail out Wall Street bill then added $153,000,000,000.00 of PORK for good measure. Our 7 Republican Congressmen voted against this RIP OFF of the taxpayer. Yet Saxby Chambliss (Socialist/RINO,Ga) voted for this waste. Why he has received over $10,621,716.00 from special interest much of it from BANKS & INSURANCE COMPANIES. With Saxby MONEY talks & the Taxpayer walks

By LOBBYIST FOR SAXBY

November 17, 2008 11:25 AM | Link to this

Saxby will vote for the BIG 3 BAILOUT, if they add an Ethanol Subsidity Got to take care of Bo Chambliss Ethanol LOBBYIST..

By LOBBYIST FOR SAXBY

November 17, 2008 11:26 AM | Link to this

**Saxby has worked hard to get things done for his friends on Wall Street.

Yes to rewarding companies that send American jobs to China, India, and other countries. In 2004, Chambliss voted against closing up $39 billion in tax breaks for companies that outsource their jobs. [Vote 90, 5/11/04] In 2005, Chambliss voted against against repealing tax incentives for domestic companies that move their manufacturing plants out of the U.S. [Vote 63, 3/17/05] He even gave those same companies a tax cut. In 2003, Chambliss voted to cut taxes on U.S. companies’ overseas income from 35% to 5.25%. [Vote 165, 5/15/03]

Won’t hold U.S. companies accountable if they deal with terrorists. Chambliss even voted against an amendment that makes U.S. businesses liable for dealing with foreign businesses that have links to terrorism. [Vote 203, 7/26/05]**

By Kitty

November 17, 2008 11:38 AM | Link to this

Saxby is a disgrace. His disrepect for Cleland. His voting for the bailout is basically the same he has done all along. He is for big spending…ie the war. Bush created the war and the REPUBLICANS CREATED this economic mess. Why not keep the money here in our nation when Iraq can afford to take care of themselves. No, we keep spending, spending, and spending there. The Iraqies should be paying our war expenses. Saxby leave us alone…go on vacation and don’t come back. You are a real disgrace. Fire Saxby, Fire Saxby. NOW.

By Sissy Saxby

November 17, 2008 11:41 AM | Link to this

Even the honest Republicans I know admit that Sissy Saxby has been a horrible Senator. The only reason anyone supports him is pure partisanship.

By findog

November 17, 2008 11:43 AM | Link to this

To quasi-quote Governor Palin, “It’s got to all be about job creation and health care.” The problem is that we are the sole nation competing in the automotive industry without nationalized healthcare thereby placing an undue burden on our manufacturers to carry the cost into their products. That $2k in costs tied to every vehicle, supporting the Viagra market, is a small but important part of the problem. Had the health care field been level then the big three would not have to push the larger vehicles where they can put that burden into the price and still compete. At the lower end that 2k allows them to compete with KIA, and build the affordable, gas misers, we need. So it is all BILL & HILLARY CLINTON’S FAULT for not passing health care reform in 1994.

By Soothsayer

November 17, 2008 11:43 AM | Link to this

Ragnar:

I’m not sure I understand your question. But I will ask you one. Do you really believe someone would pay $60,000 tax on a $200,000 home? Especially if they can buy an existing home and not pay any tax?

I know that you want this more than any thing on earth. You will probably do significantly better than under the current system. The overarching question is what will the FairTax do to the nation?

I believe that it will result in financial catastrophe that has never been seen in the country.

First and foremost though is the fact that all arguments re: the FairTax are moot. The FairTax will never be passed. If it was not passed after Bush’s 2004 re-election, it will likely never be passed.

Here’s a math problem for you. If the FairTax is 30% (expressed as a sales tax) and our Federal budget is $3 trillion (that’s a 3 with 12 zeroes behind it) and there are 300,000,000 people in the US, how much would each person living in the US have to spend subject to the FairTax to provide our government with $3 trillion? I’ll wait for your answer. This the point where Dr. Walby stopped returning my e-mails.

By SNELLVILLE REPUBLICANS FOR MARTIN

November 17, 2008 11:44 AM | Link to this

LOOK OUT $axby has been UNrepresenting GEORGIA for 6 years and he wants another 6 to help finish off the sorry HERBERT HOOVER/GREAT DEPRESSION job Bush and Cheney started 8 years ago.**BILL CLINTON HAD A BALANCED BUDGET AND NOW WE HAVE TRILLIONS OF DEBT MOUNTING EVERY DAY,THANKS TO ALL THE GRAFT OF THE “W” ADMINISTRATION.

By VETERANS FOR MARTIN

November 17, 2008 11:45 AM | Link to this

$AXBY CHAMBLI$$ does not care about Veterans nor our Armed Forces.

By REPUBLICANS FOR MARTIN

November 17, 2008 11:47 AM | Link to this

Come on Georgia! this is your chance to prove the critics of our geat state wrong! Be on the right side of history! Chambilss is serious part of the problem, NOT the solution! Do the right thing and help our state and country make the progress we desperately and help us move forward! JIM MARTIN DOES NOT WANT TO RAISE YOUR TAXES, Chambliss is a hard core LIAR and he is seriously corrupt, We need our reps in Georgia to be on the same path to change and progress as our new President. Jim Martin will do a ton of good for Georgia having a direct line to Obama, where as old Saxby boy will be fighting Obama’s progress every step pf the way and Georgia will get left out in the cold, the last thing this state needs right now! Don’t let our great state be left out because of pig headed, ignorant Chambliss. Jim Martin will help Georgia’s economy and help all the poor people in our state. Vote for Jim Martin, and you will be glad you did when we get rolling in ‘09 and we have Jim on our side to represent us in Washington.

By Dutchman

November 17, 2008 11:48 AM | Link to this

It just seems strange that major auto manufactures from many nations, Mercedes, BMW, Nissan, Toyota, Kia to name a few, can come to our country, build cars here to sell here and make money, while the US big three need a bailout.

What am I missing here?

if they can make a go of it here, why can’t the big three???

Oh, I know, it must be those $70+ an hour jobs for the US line workers. I wish I made $50/hour, it must be nice to have such a well paying job while your company is going bankrupt.

By @@

November 17, 2008 11:51 AM | Link to this

Dang Jim! Just when I think I’ve identified dem voters as stealth “cheetahs”, they go and change their spots.

They’re now spotted hyenas wanting to devour their scrappy unions?

Funny……..I’ve been watching them define the unions as the American laborers first line of defense, but now……..

What a difference a “bailout” (income redistribution) makes when the contribution is theirs.

ABORT! ABORT! ABORT!

Oh, and btw! If you’re so inclined, please share some stories from the tractor’s “pull together” team. There’s gotta be some earthy entertainment from the farm team.

By Wrench Bender

November 17, 2008 11:55 AM | Link to this

Hey Jim, how about giving us some relief. Don’t publish any of the regulars for a week or two. Us just-readers already know what they are going to say and how many hundreds of words it takes them to say it. SAVE the BANDWIDTH! I will even post a few comments.

Like this, short and simple:

I hope all the voters who thought Obama was unbeatable sure wish they had gotten off their collective masses and voted. Welcome to Socialism and a ‘Haitian’ boatload of Radical Liberal Judges ruling from the bench.

And, about that overfed UAW bailout? F-em, and I might buy an 80%+ American built auto again. Till then, I’m buying used or foreign.

By REPUBLICANS FOR NONE OF THE ABOVE

November 17, 2008 11:59 AM | Link to this

Minnesota Gov. Tim Pawlenty opened up a luncheon speech to his fellow governors by noting that excuses could be made, citing the unpopularity of President Bush, the Iraq war and the poor state of the economy.

But, he continued, such a rationale was “not fair and it’s not complete.” The party’s problem, he said, is far more grave.

“We cannot be a majority governing party when we essentially cannot compete in the northeast; we are losing our ability to compete in the Great Lakes states, we cannot compete on the west coast,” Pawlenty argued, also citing similar problems in the mid-Atlantic and interior west. “Similarly, we cannot compete and prevail as a majority governing party when we have a significant deficit as we do with woman, where we have a large deficit with Hispanics, where we have a large deficit with African-American voters, where we have a large deficit with people of modest incomes.”

While just 43 percent of whites voted for Obama, the group now makes up just 74% of the electorate, down from 89% in 1980. And that trend is accelerating. Just since 2003, whites’ share of the electorate fell four percentage points, while blacks, Latinos and Asians increased by three points, to 23 percent, and gave the Democrat 95%, 66% and 61% support respectively.

Later, talking to reporters, Pawlenty put it more plainly: “The Republican Party is going to need more than just a comb-over.”

He doesn’t advocate for a major ideological shift—few prominent voices in the party are—but rather for aggressively offering solutions on issues such as health care, energy and education that have been viewed as Democratic turf.

By Tomhere

November 17, 2008 12:02 PM | Link to this

Good Thinking. That means no more promises of INCENTIVES from the State of Georgia to FOREIGN CARMAKERS to build their plants here. RIGHT?

By Bo Chambliss Lobbyist

November 17, 2008 12:04 PM | Link to this

SAXBY ECONOMICS

Monday, November 17, 2008; 11:11 AM

Citigroup announced plans to reduce its workforce by approximately 50,000 people worldwide as the company tries to rebound from a year of steady losses and problems linked to the global financial crisis.

In a presentation at an employee town hall meeting today, Citigroup chief executive Vikram Pandit spelled out the company’s current efforts to slash expenses and return the financial giant to profitability.

At its peak late last year, Citi employed 375,000 people worldwide — a workforce assembled through merger, growth and an effort by Citi executives in the 1990s to create a global financial superstore.

But that number began to shrink after Citi posted losses late last year, and currently stands at about 350,000. After four straight losing quarters, totaling about $20 billion, Pandit told employees on Monday that the cost cutting must continue.

He said the workforce would fall in coming months to about 300,000, and company-wide expenses were to be trimmed by 20 percent.

By Ragnar Danneskjöld

November 17, 2008 12:11 PM | Link to this

Dear GA Value @ 11:07, although I realized the posted link was flawed, I searched the urban.org website, and could not find the particular document you cite. I have read Pechman’s Tax Policy twice, and think I understand it, so I am prepared – throw your best at me. Apologies for 11:21; browser crashed immediately after I attempted to post, and I thereafter intentionally and wrongly reposted.

Dear Wee Willie @ 11:03, great idea, thanks for sharing.

By Soothsayer

November 17, 2008 12:25 PM | Link to this

As of the second quarter of 2003, a UAW-represented assembler earns $25.63 per hour of straight time. A typical UAW-represented skilled-trades worker earns $29.75 per hour of straight time. Between 1992 and 2002, inflation-adjusted real wages for UAW-represented autoworkers increased by 13.5 percent. This is a compounded annual pay increase, after inflation, of 1.28 percent.

$25.65/hr is a little over $53,300/yr. Would you be willing to work (I’m talking about hard, physical labor) for less than this? What we’re talking about here is the difference between living in mobile home and being able to afford a home. What do you think is a fair wage?

By Ragnar Danneskjöld

November 17, 2008 12:25 PM | Link to this

Dear Soothsayer @ 11:43, “I’m not sure I understand your question.” I don’t doubt that, as mine was a morality question – those usually throw our leftist friends, who are routinely unwilling to address simple questions of right and wrong. However, the assumption-flaw in your “math problem” is readily revealed by flipping it: “If the Federal budget is $3 trillion (that’s a 3 with 12 zeroes behind it) and there are 100,000,000 people earning a paycheck in the US, how much would each person have to earn at a 100% tax rate to provide our government with $3 trillion? I’ll wait for your answer. This the point where Dr. Walby stopped returning my e-mails.” Dr. Walby sounds like a pretty intelligent guy to me.

By Interested in Fair Tax details

November 17, 2008 12:36 PM | Link to this

Questions about fair tax:

By Soothsayer

November 17, 2008 12:43 PM | Link to this

Dr. Karen Walby, Director of Research and Chief Economist for Americans for Fair Taxation.

Your reply is just so much pablum. Your “flipped” question is nonsense. Please try to solve the math problem as originally written. I don’t really blame you for avoiding it.

AN OPEN CHALLENGE FOR ANYONE ON THIS BLOG: solve the math problem presented on my 11:43 post.

By Soothsayer

November 17, 2008 12:49 PM | Link to this

Interested in FairTax details

Literally everything you spend money on would be taxed under the FairTax. The mortgage interest on your home, the property taxes on your home and auto, medical, dental, hospital, any service, food, clothing, prescriptions—not sure about stocks and bonds but I would think so. It is completely different than the “sales tax” we now have. If you sell anything at retail or provide services (i.e. attorney, Ragnar) you must collect and pay over the FairTax.

By Wootonsux

November 17, 2008 12:51 PM | Link to this

How would you feel if your wife had breast cancer, and someone said to let her die?

By Wootonsux

November 17, 2008 12:54 PM | Link to this

How would you feel if your wife had breast cancer, and someone said to let her die?

By Glenn

November 17, 2008 12:58 PM | Link to this

@: @@,

Brilliant person, come play, please. Ok mean to make the durty urchins smile and make art and surprisingly high test scores, and to leave ‘em laughing when we go. No gold-plating c/o elite universities & fdn’s, just reproduceable, fun stuff @ the price of ~ $10K + 2-3 cartsful of supplies from the local bigbox store. The rest, What To Do with the Stuff, is, at it should’ve been right along, free to share. So please come share with us. Do.

No need to leave hearth & home, or to abandon touching commitments pedagogical. Just the doing, now. Then, it’s back to our same Batchannels, same Battimes. Put on your Batjsmas (I’ll supply the Bat Utility Belts) and come fight for Gotham by night, and for your specials by day. Ask your Mongo. I’m betting he’d approve.

Please.

g

By findog

November 17, 2008 1:00 PM | Link to this

Sooth @12:49

3E12 / .3 = 1E13 / 3E8 = 3.33 E4 = 33,300

By F22 Man

November 17, 2008 1:04 PM | Link to this

This was in the lead editorial in Sunday’s New York Times. As you can see they & most people want to end the F22 program. Saxby is a marked man but Jim Martin can save my job. Georgia needs the F22 program so a vote for Martin is a vote to help Georgia.

More rational spending: What we are calling for will be expensive. Adding 92,000 ground troops will cost more than $100 billion over the next six years, and maintaining lift capacity will cost billions more. Much of the savings from withdrawing troops from Iraq will have to be devoted to repairing and rebuilding the force.

Money must be spent more wisely. If the Pentagon continues buying expensive weapons systems more suited for the cold war, it will be impossible to invest in the armaments and talents needed to prevail in the future.

There are savings to be found — by slowing or eliminating production of hugely expensive aerial combat fighters (like the F-22, which has not been used in the two current wars) and mid-ocean fighting ships with no likely near-term use. The Pentagon plans to spend $10 billion next year on an untested missile defense system in Alaska and Europe. Mr. Obama should halt deployment and devote a fraction of that budget to continued research until there is a guarantee that the system will work.

The Pentagon’s procurement system must be fixed. Dozens of the most costly weapons program are billions of dollars over budget and years behind schedule.

Killing a weapons program, starting a new one or carrying out new doctrine — all this takes time and political leadership. President Obama will need to quickly lay out his vision of the military this country needs to keep safe and to prevail over 21st-century threats.

By Devastator

November 17, 2008 1:04 PM | Link to this

Can someone explained to me how the repukeglicans have gone from “Buy American, Country First,” to Let Detroit die?

By Soothsayer

November 17, 2008 1:15 PM | Link to this

Findog

Excellent! Except for one small detail. You must add the tax onto the purchases before dividing. You should have gotten $43,444.

3E12 / .3 = 1E13 + 3E12 / 3E8 = 43.444 E4 = 43,444

For all FairTax proponents out there. The average family of 4 would have to spend over $160,000 PER YEAR to fund the FairTax. This is before the so-called prebates.

By Ga Values

November 17, 2008 1:23 PM | Link to this

Ragnar Danneskjöld 12:11 PM

I must have had multiple tabs up at once but I had the original Gale draft up, now I can’t find it. Try reading this it has more than enough reasons why the national sales tax won’t work.

http://useconomy.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=useconomy&cdn=newsissues&tm=26&gps=24816121436674&f=00&su=p649.3.336.ip&tt=11&bt=1&bts=1&zu=http%3A//www.brookings.edu/papers/1998/03taxes_gale.aspx

By REPUBLICANS EVIL TIME IS UP

November 17, 2008 1:24 PM | Link to this

I am so glad that you twisted evil neo-nazis are losing your positions of so-power,Jimbo here wants to let detroit die! So that means I will have to buy european or Asian, but you fake republicans scream buy american but its the NEO-NAZI CONSERVATIVE REPUBLICAN THATS SELLING THE COUNTRY OUT, LOOK AT HOW SONNY PERDUE GOT ELECTED,HE PROMISED THE PEOPLE OF GEORGIA A VOTE ON THE CONFAGDERATE FLAG, AND SOON AS HE GOT INTO OFFICE HE FORGOT ABOUT THE FLAG, SAME WITH SUXBY SHAMELESS, HE IS SELLING THE NORTH AND SOUTH GEORGIA HICKS OUT WITH THEIR JOBS HOMES AND EDUCATION, BUT THE HICKS ARE TO STUPID TO SEE THAT SUXBY IS A SHAM ARTIST WHO WILL STAND BY THE REBEL FLAG SCREAMING DIXIE WITH DURING RE-ELECTION TIME, BUT AFTER HE GETS THOSE STUPID HICKS VOTE, THEY ARE JUST POOR WHITE TRASH TO SUXBY, GO AHEAD AND VOTE SUXBY AGAIN SO WE CAN LOSE ANOTHER 180,000 JOBS. P.S. JUST BEING A REDNECK LIKE SUXBY DOESNT MEAN HE SHOULD BE ABLE TO SCREW OVER FELLOW REDNECKS!

By Ga Values

November 17, 2008 1:30 PM | Link to this

I can not get links to work off this site so here’s a cut & paste. It is a little long but gives lots of facts.

Don’t Buy the Sales Tax Taxes, U.S. Economy, Tax Reform

William G. Gale, Vice President and Director, Economic Studies

The Brookings Institution Save Print E-mail March 1998 — The tax reform panacea in vogue several years ago was the flat tax. This go around, it’s the retail sales tax. Advocates praise the simplicity, the potential for economic growth, the enforceability, and the fairness of a tax system based on consumption. But when examined closely, the simplicity breaks down, payments would be close to impossible to collect, and the tax’s fairness would be, at best, questionable. Nonetheless, more plausible consumption and income tax reform plans should not be ignored. Brookings Policy Brief Series

View All » POLICY BRIEF #31 The politics of tax reform are cyclical, and once again, we’re hearing the call for sweeping change. The flat tax and the idea of fundamental tax reform dominated policy discussions in 1995 and the early part of 1996. These proposals aimed to replace the income tax, drastically simplify taxes, and spur economic growth by flattening tax rates, eliminating tax preferences, and taxing consumption rather than income. In 1997, however, Congress and the President moved in essentially the opposite direction. The Taxpayer Relief Act of 1997 showered new deductions and credits on various groups of taxpayers, made taxes more complicated, and raised effective marginal tax rates for many people.

Now, as 1998 begins, there are once again renewed calls to tear out the income tax and start over. Although the flat tax has certainly not disappeared, the newest plan to attract significant attention is a national retail sales tax. Representatives Dan Schaefer (R-Colo.) and Billy Tauzin (R-La.) have proposed a 15 percent sales tax which they claim will replace the personal and corporate income taxes and the estate tax. A group called Americans for Fair Taxation has launched a multimillion dollar campaign to replace income, estate, and payroll taxes with what they claim would be a 23 percent sales tax. These plans would tax almost all private consumption and all government expenditures. Ways and Means Chairman Bill Archer (R-Texas) has indicated general support for a sales tax but to date has officially kept his options open.

Sales tax advocates claim their plans would dramatically boost prospects for economic growth, simplify the tax system to the point where states could collect the tax and the IRS could be abolished, reduce costs of compliance by an order of magnitude, and provide Americans with a tax system that is fair, visible and understandable. All worthy goals, but that’s a very tall order. Can it be filled?

A National Retail Sales Tax

Retail sales occur when businesses sell goods or services to households. Business-to-business transactions are not retail sales because the purchase is used as an input, not as household consumption. Household-to-household sales of goods or services are not included, either, since tax should have already been paid when the good was originally sold to a household from a business. For example, the sale of a newly constructed home to a family that will occupy it is a retail sale. But the sale of that same newly constructed home to a business that is planning on renting it to others is not a retail sale. Nor is a sale of an already existing home from one occupant to another.

Measuring the sales tax rate would seem to be a simple problem. Suppose a good costs $100 and there is a $30 sales tax placed on the item. Most people would probably consider that to be a 30 percent sales tax, since the tax is 30 percent of the selling price. This is known as the tax-exclusive tax rate. An alternative would divide the $30 tax payment by the total cost to the consumer ($100+$30), making it a 23 percent rate. This is known as the tax-inclusive tax rate. Sales taxes are typically quoted as tax-exclusive rates. Income tax rates, however, are typically quoted as tax-inclusive rates. For example, a household that earns $130 and pays $30 in taxes would normally think of itself as facing about a 23 percent (30/130) income tax rate.

Although there is no one true method of reporting the rate, it is crucial to understand which approach is being used, since the tax-inclusive rate will always be lower than the tax-exclusive rate and the difference grows as the rates rise. At a rate of 1 percent the difference is negligible, but a 50 percent tax-exclusive rate corresponds to a 33 percent tax-inclusive rate.

Both the Schaefer-Tauzin (S-T) and the Americans for Fair Taxation (AFT) plans would attempt to tax all goods or services purchased or used in the United States. Exemptions would be provided for business purchases for resales, purchases to produce taxable property or services, and exports. Expenditure on education would be exempted on the grounds that it is an investment. The sale of newly constructed single-family homes would be taxed, as would improvements to existing single-family houses. Already existing owner-occupied housing would be exempted. All financial intermediation services would be taxed. The tax would exempt expenditures abroad by U.S. residents and half of foreign travel, but tax domestic expenditures by non-residents. Notably, the proposals would tax all federal, state, and local government consumption items, as well as government investment in equipment and structures.

The plans would offer demogrants, or rebates, for each family, equal to the tax rate times the poverty line, the amount of income a family needs officially to stay out of poverty. Both plans would allow businesses who remit taxes to government to retain a small percentage of revenues collected as compensation for collection costs.

A national retail sales tax structured along these lines would represent a sharp break from the current tax system. First, the tax base would shift. Currently, our system taxes something loosely related to income. Under a pure sales tax, the base would be consumption. Second, marginal tax rates currently rise with income, but would be flat in a sales tax. Third, for reasons of social policy, tax administration and politics, the income tax contains a series of deductions, exemptions, and tax credits. Under the proposed sales tax, all of these would be eliminated. Finally, the sales tax would make vast changes in the tax system’s administration, enforcement, and point of collection.

Lessons from the States

Sales taxes already exist in 45 states, the District of Columbia, and over 6,000 localities. State tax rates range from 3 percent to 7 percent. While state sales taxes are widely viewed as successful, they are very poor models for federal reform.

States only tax about half of private consumption of goods and services. Many states exempt goods such as food, electricity, telephone service, prescription medicine and so on. Most states do not tax services very well, if at all. In addition, between 20 and 40 percent of state sales tax revenue stems from business purchases, which are not retail sales. This causes cascading of the sales tax, which distorts relative prices in capricious ways and gives firms incentives to merge with other firms in order to avoid the tax. States often do not require their own government to pay sales taxes. And states do not provide demogrants; instead they help the poor by exempting specific items like food. These findings suggest that running a pure, broad-based sales tax as envisioned by S-T and AFT could be quite difficult in practice.

What?s the Rate?

Determining the appropriate tax rate in a national sales tax can be tricky. For example, if (a) there is zero tax evasion, (b) state and local taxes do not change, (c) the tax base is not reduced by political or other factors, (d) nominal government spending is held constant, and (e) transition issues and economic growth are ignored, the AFT proposal would require a 23 percent tax on a tax-inclusive basis, or a 30 percent tax rate in the more familiar tax-exclusive approach. (All of the following rates are tax-exclusive.) But realistic adjustments for each of the stringent conditions listed above raises the estimated tax rate.

The tax evasion rate under the income tax is between 15 and 20 percent. Evasion issues are discussed in the next section; here we simply note that a 15 percent evasion rate in the sales tax, which is probably conservative, would raise the rate to 35 percent.

In the absence of federal income taxes, states would likely have to convert their own income taxes to sales taxes and conform closely to the federal tax base. Add in the revenues from existing state sales taxes, and the combined federal and state sales tax rate would climb to 45 percent.

Suppose the tax base were reduced by one-third from the pure consumption tax proposed. In light of all the preferences in the current income tax, and the exemptions in state sales taxes, this is probably not an unreasonable assumption. It would come about, for example, if just food and health were exempted, or if just government expenditures were exempted. Cutting the base like this would raise the required rate to 67 percent.

Since a sales tax would likely raise prices, nominal government expenditures on goods and services consumed by government and on transfer payments would have to rise to hold constant the inflation-adjusted effects of government policy. This could add another 10 percentage points to the required tax rate.

Any transition relief provided to households would reduce the tax base and raise the required rate further. For example, the S-T plan would make payments to those on fixed annuity incomes to account for any increase in prices. Economic growth could reduce the required tax rate, but as discussed below, probably not by very much. And if saving rises following the implementation of a sales tax, consumption would have to fall, which would reduce the tax base and raise the required tax rate further.

The clear result, then, is that any realistic sales tax plan would have tax rates much higher than the 23 percent rate promised by the AFT. Sales taxes at such high rates raise crucial questions about enforceability.

Enforceability and Simplicity

Tax simplicity and tax enforcement should be analyzed together—any tax can be simple if it is not enforced. If it could be enforced, the sales taxes would be quite simple for the typical household, but problems would arise for businesses.

The likely rate of evasion in a sales tax is a key issue. Sales tax advocates admit that evasion would be a certainty, yet make no account for it in their estimates and hope that sentiments of fairness will induce taxpayers not to cheat. They also point to low marginal tax rates as an inducement not to cheat, but as shown above, the tax rate would not likely be low.

Another claim is that detection of cheating would rise dramatically since only retailers would have to be audited, but this is misleading. Under the sales tax, businesses that make retail sales would be responsible for sending tax payments to the government, unless the buyer used a business exemption certificate, in which case no tax would be due. But the buyer would have the legal responsibility for determining whether the good is used as a business input or a consumption item. This means that auditing and enforcement would have to focus not just on retailers, but also on all businesses that purchase from retailers, to ensure that business exemption certificates were used appropriately. One study found that, in Florida, where sales taxes have never exceeded 6 percent, 5 percent of all purchases made with business exemption certificates were used inappropriately to exempt personal consumption from taxes. At the much higher tax rate needed in a federal sales tax, a much larger percentage of sales to businesses might be expected to fall into this category.

Most importantly, the sales tax would generate tremendous opportunities for evasion. For example, in the income tax, the rate of evasion is around 15 percent. But income where taxes are withheld and reported to government by a third party has evasion rates of around 5 percent. For income where taxes are not withheld and there is no cross-reporting, evasion is around 50 percent. Since the sales tax would feature no withholding and no cross-reporting, the possibility of high evasion rates needs to be taken quite seriously.

Advocates also assert that the sales tax would be more effective than the current system at raising revenue from the underground economy. The classic example is that of a drug dealer who currently does not pay income tax on the money he earns, but would be forced to pay taxes under a sales tax if he took the drug money and bought, for example, a Mercedes. The problem with this argument is laid out best by Rep. Richard Armey (R-Texas): “If there is an income tax in place, he [the drug dealer] won’t report his income. If there is a sales tax in place, he won’t collect taxes from his customers” and send the taxes to government. In the end, neither system taxes the drug trade.

Many other countries have attempted to implement a retail sales tax, or variants, and almost all have abandoned the tax and moved to a value-added tax. Governments have gone on record as noting that at rates of more than 12 percent, sales taxes are too easy to evade. The most optimistic assessment would be that there is no historical precedent for a country to enact a high-rate, enforceable, national sales tax. That does not mean it is impossible, but extreme caution would be appropriate.

Finally, some sales tax advocates would eliminate the IRS and have the states administer the tax. Even though the states would keep 1 percent of the revenue they collect, they would have poor incentive to collect federal taxes adequately. Even the Wall Street Journal, no fan of big government, notes that “it is fantasy to think of ‘getting rid of the IRS.’”

The Tax Base

For reasons of equity, efficiency, and simplicity, establishing a broad tax base is a key element of sales tax proposals. The broader the base, the lower the rate can be. As the income tax shows, allowing specific exemptions creates a political slippery slope. Loopholes accorded to one group breed additional loopholes, by fueling demand from other groups for equally favored treatment and by weakening congressional resolve to stem the tide of special requests.

But taxing a broad base will be hard. Some items are quite difficult to tax, like imputed financial services. Other items may not be taxed for reasons of social policy. Child credits, rental payments, and some or all food may fall into this category. Finally, some sectors might not be taxed because of strong political influences—housing and health, for instance, though exemptions here may also be related to social policy.

These issues create serious trade-offs. For example, taxing health insurance would raise the number of uninsured by an estimated 6 million to 14 million people. Not taxing it would raise the sales tax rate by several points.

Even with extreme political discipline in avoiding subsidies, it will be difficult to tax more than 80 percent of personal consumption. Retaining some of the major preferences in the income tax could reduce the private consumption base to about 60 percent of personal consumption.

The most controversial and interesting feature of the proposed sales tax base is the provision to tax all consumption and investment purchases made by the federal, state, and local governments. These provisions increase the tax base by more than 40 percent. But taxing government only helps keep the sales tax rate down when government is not allowed to raise the additional amount of revenues it collects to pay the tax. If this restriction takes effect, real government spending would have to fall dramatically.

Economic Growth

Tax reform could increase economic growth in several ways. A broader tax base that eliminated loopholes would help direct assets and efforts to their most productive economic use. Lower tax rates would encourage working, saving, and investing and reduce incentives to avoid or evade taxes. Simpler taxes would reduce compliance costs. Changing the base from income to consumption would enhance the after-tax return to saving and investment.

But growth projections also need to take into account transition relief. Consider a 65-year-old who retires the day that a sales tax takes effect. While she worked, her income exceeded her consumption and she paid income taxes. Now in retirement—when her consumption will exceed income—she will be asked to pay consumption taxes. Should she be given tax relief for consumption financed by drawing down her assets? Giving such people tax relief on their accumulated assets would raise the sales tax rate considerably and reduce growth, but not giving tax relief seems unfair. Politically, some sort of relief seems almost a certainty.

Estimates suggest a well-functioning, broad-based consumption tax, with limited personal exemptions and limited transition relief could raise income per person by up to 2 percent over 10 years. But more generous transition relief or erosion of the tax base would drive the growth effects to zero fairly quickly. These results stand in sharp contrast to AFT’s claims that after 10 years of a sales tax, the typical American household would be at least 10 percent and “probably 15 percent better off” than they would have been otherwise.

Would a Sales Tax Be Fair?

The issue of fairness in taxation is often contentious and always subjective. The sales tax would tax consumption at a flat rate compared to the current system, which taxes income at progressive rates. Taxing consumption instead of income is often justified on grounds that consumption may be a better indicator of long-run ability to pay taxes, since income varies significantly from year to year. But for people who face constraints on what they can borrow, the long run may not be the most relevant time period. Clearly, there is nothing inherently fair (or unfair) about having just a single rate.

If households are classified by annual income, the sales tax is sharply regressive. Under the AFT proposal, taxes would rise for households in the bottom 90 percent of the income distribution, while households in the top 1 percent would receive an average tax cut of over $75,000. If households are classified by consumption level, a somewhat different pattern emerges. Households in the bottom two-thirds of the distribution would pay less than currently, households in the top third would pay more. Still, households at the very top would pay much less, again receiving a tax cut of about $75,000. There appears to be little sound motivation for heaping huge tax cuts on precisely the groups whose income and wealth have benefitted the most from recent events, and raising burdens significantly on others.

The proposed sales tax also contains potentially severe marriage penalties. Recall that the demogrant would equal the tax rate times the poverty line. The poverty line is $7,890 for one person, plus $2,720 for each additional person. At a sales tax rate of 30 percent, a conservative estimate, two single people would be entitled to rebates of $2,367 each for a total of $4,734. If they married, they would receive $3,183, so their annual marriage penalty would be $1,551. At higher rates, the penalty would rise.

Advocates like to assert that sales taxes are pro-family relative to the income tax. However, children and families benefit disproportionately from numerous features of the current system, including dependent exemptions, child credits, child care credits, earned income credits and education credits. And the preferential treatment of housing, health insurance, and state and local tax payments also plausibly helps families, since they consume relatively more housing, medical services, and government-provided services such as education. All of these preferences would be eliminated under a sales tax.

Moreover, compared to childless couples, families with kids generally have high consumption relative to income, so switching from income tax to a consumption tax would further raise tax burdens during years when family needs were highest. Based on 1996 data, a recent study found that enactment of a broad-based, flat-rate consumption tax like the sales tax or flat tax would hurt families with incomes less than $200,000, because of the loss of tax preferences, but would help families with income above $200,000, due to the dramatic reduction in the top tax rate. Incorporating the 1997 tax changes—especially the child and education credits-—would only exacerbate these results.

Conclusion

As a replacement for the existing federal tax system, a national retail sales tax is a non-starter. After accounting for evasion, the conversion of state and local taxes, adjustments to keep government benefits constant, and plausible reductions in the tax base, the required rate would be sufficiently high to make enforcement too difficult and evasion too tempting. The historical record should suggest great caution in this regard.

Even if the tax were enforceable at these rates, the implied effects on economic growth would be small at best, and certain sectors of the economy, such as employer-provided health insurance, could be affected significantly. The sales tax would raise burdens on low- and middle-income households and sharply cut taxes on the top 1 percent.

Opposition to the sales tax is not a partisan issue. Robert McIntyre of Citizens for Tax Justice decries the sales tax as unworkable. The Wall Street Journal calls the sales tax a “VAT [value-added tax] in drag” and highlights concerns about administration and enforcement. Bruce Bartlett of the National Center for Policy Analysis concludes that the sales tax is a poor choice for replacing the tax system. Joel Slemrod of the University of Michigan pronounces the sales tax as NAUSEA-I, an acronym for “not administrable at usual standards of equity and intrusiveness.”

These problems with the sales tax do not imply that tax reform is a bad idea. Improvements to the tax system are sorely needed. Other types of consumption taxes, like value-added taxes or variants of the flat tax, should receive careful consideration. Many of the gains of moving to a consumption tax could also be obtained through judicious modifications of the income tax. Since income tax reform may also generate much smaller transitional problems, it should be considered seriously, and first.

By Mathematically Challenged

November 17, 2008 1:53 PM | Link to this

Soothsayer

Why am I getting $43,333 as Total Spending per person [$13 trillion / 300 million] ?

Your assistance is appreciated.

By Ragnar Danneskjöld

November 17, 2008 1:55 PM | Link to this

Dear Ga Values @ 1:30, thanks, I am ready to answer each point; tell what moves you in this 3,700 words. I disposed of the fairness issue @ 10:41 – my argument is unanswerable, as I have posted it several times, and nobody ever tries to address it. Much of the Brookings Article relies on testimony by figureheads rather than substantial argument, and otherwise laments that it is unworkable for vague or unspecified reasons or an occasional red herring, e.g., “imputed financial services.” Hand wringing is not argument. The Fair Tax of course is limited to hard goods and seems to me quite workable.

By Glenn

November 17, 2008 2:06 PM | Link to this

Yeah, Devapuke-illator I can try to explain:

Screw ‘em if Chapter Elevening ain’t good enough for them. If they can’t make their respective cases, not to the B. Franks of the World who know nothing of real business except to resent the very idea of money-making, then let’s have Detroit’s Big Three make their cases to the People’s appointed fiscal magistrates. That’s what Mom&Pop, of the still detested though now moribund GOP Base, must do; and after all, What’s good for the Country ought to be good enough for GM.

No?

By Disgusted

November 17, 2008 2:14 PM | Link to this

“The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn.” [Italics supplied] From the FairTax.org Web site.

So much for your assertion that the Fair Tax is “… limited to hard goods …”, Ragnar. Even a lawyer’s fee would be taxable, as would hundreds of other service charges. These are not hard goods.

By Ga Values

November 17, 2008 2:20 PM | Link to this

I have actually purchased around 20 corporations with sales between $50-200 million out of bankrupcy so I have some knowledge on the subject. At first I was completely for a bankrupcy but I am having 2nd thoughts. To begin with Bankrupcy law is very vague, the judge has a great deal of power because he can do mostly as he wants. Bankrupcy lawyers are a small group & all know each other. In the business, the bankrupcy is over when there is no money to pay the lawyers. The GM case could run for years with legal feed is the hundreds of billions, with nothing left in the end. If I trusted Government I would say appoint a Trustee to do a pre package bankrupcy but Superman is not available. Net Net there is probably no cost effective solution.

By BS Aplenty

November 17, 2008 2:24 PM | Link to this

What Would Jesus Do?

As a free market capitalist, I am reluctant as heck to bail out any insolvent corporation. That situation is adquately addressed in the federal Bankruptcy Code. I don’t, in general, advocate governmental assistance. However, the federal government did assist Chrysler Corporation in just such a fashion in the late 70’s.

At that time, Lee Iacocca was CEO of Chrysler. The newly named CEO, Iacocca, got the federal government (Carter Administration) to guarantee loans to the company. It was clear at the time that the company would not survive but there was not a systemic problem. GM and Ford were still solvent and operating at the time.

Subsequently Chrysler paid the guaranteed debt off about seven years early. Bankruptcy was averted. But that was then and this is now. I don’t think “Detroit’s” problem is isolated. I think it’s an uncompetitive business model including leader-less executives.

My conclusion is, at this point, the game is a strictly cost/benefit analysis. Should the auto companies file for Chapter 11, then the pension and healthcare obligations of the automakers would likely fall to the Pension Benefit Guaranty Corporation, a government agency. I am not familiar with the scope of said guarantee but I’ll bet its close to the $25 billion industry loan proposal.

Anybody got a sense for the size of that pension obligation in this down market? Does it and other government guaranteed obligations exceed the proposed bailout?

By findog

November 17, 2008 2:24 PM | Link to this

Sooth @1:15 I was attempting to serve two masters. Your inquiry, while escaping the wrath of the pure tax league of super hero’s, was done with their mathematical method of reductive reasoning…

By Soothsayer

November 17, 2008 2:27 PM | Link to this

Mathematically challenged:

Your answer is correct. I used the “actual” percentage of .299 which resulted in a slightly higher number.

What would a good that cost $1 have to be sold at to yield a “profit” (tax) of 23%? 1 / .77(1 - .23) = 1.2987 or .299.

Sorry for the confusion but great job!

By findog

November 17, 2008 2:42 PM | Link to this

What would be a really good thread would be if not the fair tax then what?

How about the lowest rate of ten-percent becomes the new minimum tax and NO ONE pays any less? No rebate either. Raise the minimum wage eleven percent to cover the initial costs. Corporations can pay no less than ten percent. Venture capitalists pay no less than ten percent. Move the next incremental bump [15%] up to cover a family of four at poverty times some multiplier to say $60k. Start the next bump up to 23% at the cut off point for SSI [$90k] then double that for the final highest rate of 30% for all incomes over $180. Then take the limit off of Medicare and keep 1.5% as far as the baseball player can swing… BTW no cap on Medicare is reasonable since when we get you ready for your dirt nap there is no limit to what the medical profession will go to in attempting to save you from the inevitable meeting with your maker.

By findog

November 17, 2008 2:57 PM | Link to this

BS @2:24 When the pension goes into the federal system the retirees get about half or a third of what they earned.

SO

Let them fail, like the airline industry, oh wait we propped them up after 911

Let them fail like the banking industry, oh wait we shelled out $700B, no wait again we are not going to use that money to do what we said

Let them fail and wipe out another trillion in the stock market, no that $700B could be used to acquire their assets

Let them fail unless the unions give up what they have earned over the last 60-years, yes that’s it!

By Disgusted

November 17, 2008 3:01 PM | Link to this

The Big Three automakers have $114 billion dollars in long-term health care obligations alone for their million retirees—and that doesn’t count the cost of pension obligations, which are more than twice as great.

So American is faced with a choice: either pass a $25 billion dollar aid bill with appropriate restrictions on the automakers, or be prepared to absorb much of the cost of the long-term obligations by allowing the automakers to file bankruptcy in order to be relieved of the obligations.

I assume that the conservatives on this blog would be willing to incur an additional $200+ billion in federal obligations for the sake of pure laissez faire. After all, as the late great Illinois senator Everett Dirksen once said, “A billion here, a billion there—pretty soon you’re talking about real money.”

By Glenn

November 17, 2008 3:05 PM | Link to this

Wootensux @ 12:51 & 12: 54,

How I would I feel? Undead myself. And I’d feel what Georgians are made to feel: that Medicine, as practiced in any contiguous state included the supposedly poor ones, doesn’t give a damn, Scarlet, for its own.

So I’d light out for one of the other states, such as Florida or Tennessee or N. Carolina. That’s what I’d do. If you want the very best, then look to e.g. Mayo or Harvard/Boston Mass., or UCSF or UCLA or even UC Davis Med, Sacramento.

Then maybe you (plural) will feel better, and will know that while American commonfolk are kind enough to have made their willing, financial preparations for those hurting, still, the State of Georgia, whose healthcare system for now remains in the grip of 159 politicized sherrifs (yes, sherrifs; that’s the problem), don’t give a hoot how you feel, so long as you can pay hospital costs redounding to jail fees.

All the best, to you and yours,

g

By Glenn

November 17, 2008 3:10 PM | Link to this

Well, my last one coulda used a copy-editor. But who bothers any longer to keep such folks on payroll? The AJC obviously doesn’t do, unless Tucker has her own, necessarily — and Tuck, as all the world can see weekly but not weakly, refuses even to spend Company money on staff attorneys!

Go figure for your$self…

By Vernon Jones

November 17, 2008 3:11 PM | Link to this

Vernon Jones Supports Saxby Then He Must Be The Man

By BS Aplenty

November 17, 2008 3:14 PM | Link to this

findog and Disgusted

I am sympathetic to the plight of auto and other workers who toiled for many years for companies with the expectation of a pension at days end. I, myself, have the expectation of a company-sponsored pension payment at age 60 should my company remain solvent. But I am older and wiser.

I know that defined benefit pensions are being terminated in private industry. I would not expect any private (defined benefit) pensions as we know them in fifteen years. And, I’m glad.

Gone will be the uncertainty for workers who have given their working lives for a corporation only to find that their benefits were, how shall we say, optional. Give me the outright 401(k) or some similar proposal where the benefit accrues and is paid periodically to an account owned by me. Then if I want to leave, so be it. The benefits to date come with me. No vesting, no time-in-service calculations, just pay me to date.

That’s cold comfort to those, like me, who operate under private pension systems. But, at least, my kids won’t rely on fantasy benefit systems like pensions. Just my take.

By @@

November 17, 2008 3:19 PM | Link to this

Glenn @ 12:58:

I have yet to figure out what it is you want from me. Do you want me to fly to California every night?

I am not certified to teach although I do.

Aside from group time, everything I do is tailor made to fit the individual child’s needs. In my environment, no two children are alike. No two children respond to the same instruction/lesson application. With each progression, trial and error begins yet again.

It is strictly through observation, and hands-on application that I could prove useful.

I am, however, flattered that you believe I can be from a distance.

I’ll check back later. Right now I’m gonna lay my stuffy head on a soft pillow in hopes that the throbbing will dissipate.

By Tolley Jay

November 17, 2008 3:20 PM | Link to this

Wooten’s a moron but he’s dead right on this one.

By itsme

November 17, 2008 3:29 PM | Link to this

Why not bail out Georgia landscapers? Not only have they suffered during the economic downturn (clients unable to pay their bills), but they are still contending with the drought, too. And, while we’re at it, there are thousands of other businesses that need help.

By JackLeg

November 17, 2008 3:32 PM | Link to this

How come all the people against the fair tax forget to subtract the embedded taxes we are already paying?

By dick c

November 17, 2008 3:41 PM | Link to this

What’s likely to happen to GM without a bailout is that they’d go Chapter 7. Liquidation would likely result in a purchase of Chevy, Buick, Cadillac, by their Chinese partner SAIC. SAIC GM would then likely import chinese made vehicles, undercutting all other imports and U.S. made vehicles. The chinese would also then own the Chevy Volt technology. You want to find out what a slippery slope is? Pull the lever and flush GM.

By Shawny

November 17, 2008 3:41 PM | Link to this

Before you go hog wild on wanting to toss out Saxby on the bailout deal, notice how the republicans are against the automakers bailout and the democrats are for it. Put Martin in, and all you do on this particular issue is add another yes bailout vote.

By Republicans R Crooks

November 17, 2008 3:45 PM | Link to this

In a similar fashion, let the AJC and all the other worthless rags in the country suffer their fate also, no bailouts for them. Let all the failing newspapers, magazines, radio stations, and media empires fail, as the market wills. No welfare, food stamps, or jobless benefits for laidoff reporters, editors, copyboys, or deliver people….Darwin rules….creative destruction…

By Scholar

November 17, 2008 3:46 PM | Link to this

I agree with Jim on this one. The big 3 made their deal with the devil during the SUV craze of the 90’s, now they have to reap it. The SUV market was a huge cash cow for them. Where are all those profits now? Did they go into developing fuel-efficient vehicles that represent forward thinking? No, but you can still get the Cadillac Escalade with the cheasy extra helping of chrome edition rolling on 20-inch rims.

Honda does not seem to be having any issues, and some of there cars are made in Ohio. Don’t prop up the heroin addicts in Detroit. It is high time they detox.

By Jake

November 17, 2008 3:48 PM | Link to this

Fair Tax? - 1. There isn’t anything fair about it, since it’s regressive. 2. Therefore, ethically, it’s vastly inferior to Steve Forbes’ flat tax. 3. We buy, sell, use less of anything that is taxed given a choice. Since consumer goods are 70% of our economy and they would all be taxed it sounds like GDP and tax revenues would both be less than expected.

By Republicans R Crooks

November 17, 2008 3:49 PM | Link to this

Stinking scum bag saxby can stay if you agree to kick out Traitor Joe Lie-berman….

By NoWay

November 17, 2008 3:49 PM | Link to this

No way, no how should one dime be used to bail out the UAW. Let the big 3 file chapter 11 and go from there.

By Republicans R Crooks

November 17, 2008 3:57 PM | Link to this

ok NoWay, I will agree to no GM bailout if you agree to burnAtTheStake 90% of all law school graduates here in AmeriKa….Light em if ya got em…..

By Steve

November 17, 2008 3:59 PM | Link to this

You people are funny. You agree that the financial institutions should be bailed out, even though they got there with very bad business practices. Yet you want to let the US Big 3 auto manufacturers go away because of very bad business practices. It’s no wonder the economy is going the way of the dodo!

By Sham Tax

November 17, 2008 4:09 PM | Link to this

JackLeg 3:32 PM

What can you buy at WalMart that has embedded taxes?

By Emily

November 17, 2008 4:17 PM | Link to this

I’ve done some research on Saxby to find out how he voted on the issues. Here’s what I found out:

Saxby voted AGAINST improving health care for returning soldiers and veterans.

Saxby voted AGAINST providing health insurance for our country’s uninsured children.

Saxby voted AGAINST disaster relief for victims of Katrina & Rita.

Saxby voted AGAINST farmers that needed assistance due to the drought.

Saxby voted AGAINST victims of domestic violence.

Saxby voted AGAINST improving protection for our troops by denying them vehicles to withstand roadside bombs.

Saxby voted AGAINST limits on extended tours of duty. Some of our troops have served three or more tours of duty. Saxby wants them to keep on indefinitely. By the way, Saxby never served in the military - he claimed he couldn’t because of a bad knee. But yet he wants to make others serve indefinitely.

Saxby voted AGAINST shifting $11 billion from corporate tax loopholes to fund education.

Saxby voted AGAINST keeping more police officers on our streets. This is a program that reduced violent crime for 7 years in a row. Saxby voted against continuing it.

Saxby voted AGAINST repealing tax subsidies for companies that send our jobs overseas.

Saxby voted FOR a bill that makes it easier for companies to send our jobs to other countries.

These are just some of the votes where Saxby voted against our best interests. There are many more. He has sided with corporate lobbyists every step of the way. Saxby needs to be voted OUT of the Senate. He does not have our best interests at heart.

Vote for Jim Martin in the runoff.

By Glenn

November 17, 2008 4:19 PM | Link to this

@@,

You’re head is wanted all ‘round, whether it rest on a pillow round or rests not until it makes the round. Our business in in any broken urban school or school district, anywhere, and your idividuations are of import in all places, provided we have your guidance toward the admittedly iffy objective of generalizing the particular.

Not a one of the greatest educators of the Twentieth Century was certificated. Not one.

By Tolley Jay

November 17, 2008 4:32 PM | Link to this

Steve @ 3:59:

What you fail to understand is that bankruptcy does not offer protection to financial institutions the way it does typical industry. A bank’s most important creditors are not subject to the automatic stay. Financial contracts, such as securities contracts, swaps, repurchase agreements, commodities contracts, and forward trades, are unaffected by the automatic stay.

By AmVet

November 17, 2008 4:37 PM | Link to this

Emily,

Six deferment Saxby has made great progress though!

Instead of the 0% grade he got from the Disabled Americans Veterans and Vietnam Veterans of America in 2004, he has skyrocketed up to 57% and 60% respectively.

And the Iraq and Afghanistan Veterans of America also give him a failing grade - D minus.

Too bad the yellow old coot is too old to serve. He’d probably get fragged…

By Redneck Convert

November 17, 2008 4:39 PM | Link to this

I know you all will be releived to know that the beer truck driver that got shot today near Oakland Cemetery wasn’t me. I didn’t want nobody to loose a bunch of sleep tonight over it.

By Devastator

November 17, 2008 4:45 PM | Link to this

CHICAGO – President-elect Barack Obama and former Republican rival John McCain pledged Monday to work together on ways to change Washington’s “bad habits,” though aides to both men said it was unlikely McCain would serve in an Obama Cabinet.

The two men met in Obama’s transition headquarters in Chicago for the first time since the Illinois senator vanquished McCain in the presidential election Nov. 4. Obama said they wanted to talk about “how we can do some work together to fix up the country,” and he added that he would offer his own thanks to McCain “for the outstanding service he’s already rendered.”

Obama has said he is likely to invite at least one Republican to join his Cabinet, but McCain was not expected to be a candidate. The Arizonan is serving his fourth term in the Senate.

Obama and McCain sat together for a brief picture-taking session with reporters, along with Rahm Emanuel, Obama’s incoming White House chief of staff, and South Carolina Republican Sen. Lindsey Graham, McCain’s close friend. Obama and McCain were heard briefly discussing football, and Obama cracked that “the national press is tame compared to the Chicago press.”

When asked if he planned to help the Obama administration, McCain replied, “Obviously.”

After the meeting, the two issued a joint statement saying: “At this defining moment in history, we believe that Americans of all parties want and need their leaders to come together and change the bad habits of Washington so that we can solve the common and urgent challenges of our time.”

By Do the Math

November 17, 2008 4:47 PM | Link to this

Jim: So you think banks and wall street are good places to throw away tax payer money but that the auto industry is not????

All of your arguments hold true for the other wastefull bailouts Washington so why is this any different?

When you find yourself in a hole, the first thing you do is stop digging.

By laughing

November 17, 2008 4:55 PM | Link to this

I come here once in a while to hear from the lunatic fringe. I must say, you are out in force today. There are some real wind-bags on this blog. If only you were half as brilliant as you think you are you would be doing something more worthwhile than posting rants.

By caz1158

November 17, 2008 5:18 PM | Link to this

the begining signs of socialism have arrived. the government will take care of all our needs. we the people,loyal sheep that we are will follow anyone who promises to take care of us. if you did’nt see this happening then blind sheep is the proper term for you. the dems have preaching this for decades,keep the lower class down (welfare),promise the middle class anything (never happens), and blame all our woes on the rich and the nasty republicans. where do i go to get my “perfect citizen” handbook?

By caz1158

November 17, 2008 5:20 PM | Link to this

the begining signs of socialism have arrived. the government will take care of all our needs. we the people,loyal sheep that we are will follow anyone who promises to take care of us. if you did’nt see this happening then blind sheep is the proper term for you. the dems have preaching this for decades,keep the lower class down (welfare),promise the middle class anything (never happens), and blame all our woes on the rich and the nasty republicans. where do i go to get my “perfect citizen” handbook?

By Laughingly Similar 2U

November 17, 2008 5:22 PM | Link to this

Now, Laughing, lets not be too critical of our fellow commenters. A blog allows someone to “Truman” another, that is, make a fool out of himself with a passionate threat. Truman did that on the national stage in the fifties when his wife was criticized for her singing the Mozart. Never sing the Mozart. Ever. But she did, and some journalist understated some very well played phrases about her performance and well, Truman “blogged” a letter to him which got published. Truman was a lame duck after that.

So we all are Trumans. It’s okay.

I think this campaign brought us all together. I think we’re closer. I’m standing here on the far, far left, way beyond the male-bashing lunatic fringe, in fact I’m actually in that imaginary line that extends from the End Zone Pylons to infinity, you know, that imaginary plane that causes six points if you just nudge it a little.

I live so far left (healthcare for the sick, education for the dumb, justice for the innocent), yet, I think Obama’s first act as president should be to pardon Bush, Cheney and Rove.

My wife’s recent pet scan revealed that her stage four breast cancer has spread into her brain and spinal chord. She maybe has months, maybe till spring or summer or fall, or…… She’s lashing out at the universe and I’m absorbing all the blows. I said “through sickness and health” one day, so here I am with her, even though the marriage has been over, if you use Brangelina as a model, for years.

But people are not disposable sir, and she has a husband to work out her frustrations on. I’m here forever, sir.

Life and politics are so intertwined that my wife is actually still angry about McCain’s campaign tactics.

My wife is a great artist. Her work is wonderful and it’s a privelege to be there when she creates. She hasn’t done much lately, of course, but she’s doing this piece from the hell she’s in. It’s the damndest thing she’s ever painted. It’s not done yet, and maybe it never will be, but what a crazy piece this is.

My wife.

By caz1158

November 17, 2008 5:39 PM | Link to this

I just read a blog by Laughable,I say that cause so much of was. I’m more of a central/right kind of guy. I believe in equal justice for victims and the perpetraters. I believe in education for all.But as the old saying goes,”you can lead a horse to water-but you can’t make him drink”. Another words educate the ones who want to be educated. Healthcare-well that should be individual states responsiblity, not the federal government. How bout a new concept-take care of yourself and not rely on others for one’s actions of life. I am sorry for your wifes situation though,but its not my responsibilty to care for her,sorry.

By caz1158

November 17, 2008 5:51 PM | Link to this

I hear the lines are forming fot federal bailout protection. General Mills, Florida fruit growers, GE, & Home Depot just to name a few. Now that the Government has opened the floodgates, How do they say NO to anyone? Oh yeah that $600 stimulus check will hold me over till april-Ha!!! What a Joke,and we wonder why the rest of the world is laughing at us!

By Glenn

November 17, 2008 5:54 PM | Link to this

Laughing Sim,

You can laugh even at the daredest times. Is there a Sim for that? ‘Cause there’s no simp can do it.

It was old Harry’s daughter, Margaret, who got panned, and Mr. Truman didn’t make a fool of himself in defense of his daughter (he challenged the critic to join him in fisticuffs), but rather the alcoholic critic who was foolish to have penned poisonously a review of a recital (not a performance subject to improvement and therefore susceptible of honest criticism). Still, dear daughter Margaret didn’t belong in the arts.

But your dear wife does. Only an artist who loves would love art the more when loving’s time is short.

To art, to life and to love, then. To her, to you, and to us.

Glenn

By catlady

November 17, 2008 6:26 PM | Link to this

One bailout leads to another and another. No, the car industry does not need to be bought out because of their imprudence. Dear God, Dems and Repubs, you gotta get a grip! We bail out Chrysler, we bail out the airlines, we bail out wall street, the ins. co’s, the banks, and … and… and… This has GOT to stop NOW. You take a risk, you pay for your risk. You build cars poorly/without economy, you pay. Stop ALL the bailouts NOW. Not another cent! No bailing out the city of Atlanta. A pot rests on its own bottom.

Folks need to get back to basics. Grow your food, take care of yourself and your family. Do whatever labor is available (rather than thinking yourself above i t). Reuse. Limit expenses. Be prudent. Keep your car an extra year, or five extra years! Be modest. This should apply to EVERYONE, EVEN THE BIG BOSSES.

THE GREED CONTINUES!!!!

By Ricardo

November 18, 2008 5:44 PM | Link to this

One thing that is overlooked about having a vital auto industry is the relationship to a strong defense. In late 1941, auto production was shut down and all factories related to auto production were converted to war-related production. Munition, aircraft, ammunition, and support vehicles for the ground, marine, and air were produced. Most acknowledge that the ability for production to ramp up quickly and completely as what turned the tides of WWII toward the allies. We loose this heavy industry capacity, it ain’t coming back soon.

GM president William Knudsen managed and directed the Office of Production Management which oversaw all production at all factories. He previously worked at Ford to design production lines for the Model T, then at Chevy, then GM. Henry Ford didn’t like taking orders from a guy he fired, but FDR got him in line.

By Ricardo

November 18, 2008 5:56 PM | Link to this

How about a surtax on the oil companies to loan to the auto companies? Oil companies have plenty and their price manipulation caused the whole mess.

By brermismbrarf

December 3, 2008 3:32 AM | Link to this

hi, nice site1 i want work with you and buy advertising place for my websites , [url=bankingfinancialcrisis.iperninsure.com]bankingfinancialcrisis[/url] [url=financialcrisis.iperninsure.com]financialcrisis[/url] [url=financialcrisistimeline.iperninsure.com]financialcrisistimeline[/url] [url=fraudfinancialcrisis.iperninsure.com]fraudfinancialcrisis[/url] [url=globalfinancialcrisis.iperninsure.com]globalfinancialcrisis[/url] [url=icelandfinancialcrisis.iperninsure.com]icelandfinancialcrisis[/url] [url=metastock.iperninsure.com]metastock[/url] [url=usfinancialcrisis.iperninsure.com]usfinancialcrisis[/url] [url=worldfinancialcrisis.iperninsure.com]worldfinancialcrisis[/url] please contact me if you are interested!