The 2013 House Budget Proposal
http://thedianerehmshow.org/shows/2012-03-20/2013-house-budget-proposal
Later this morning Republican Congressman Paul Ryan announces the House 2013 budget proposal. The plan will likely include reduced and simplified tax rates and also a premium support program for Medicare. No one expects this version to pass, but it will establish key markers in the budget battles ahead both with Democrats and Republicans. Some conservatives support seeking spending cuts beyond the cap established after months of negotiation with Democrats, and many hope the plan will scale back major cuts currently slated for the Defense Department: Please join us for a conversation on the House budget plan and election year politics.
Guests
Jared Bernstein
senior fellow, Center on Budget and Policy Priorities; former chief economist and economic policy adviser for Vice President Biden.
Vin Weber
Republican consultant, former member of Congress representing Minnesota's 2nd district (1981-93).
Rep. Chris Van Hollen
Democrat of Maryland, member of the 12-person Joint Select Committee on Deficit Reduction.
Alice Rivlin
senior fellow, Brookings Institution, vice chair, Board of Governors, Federal Reserve System (1996-99); director, White House Office of Management and Budget (1994-96); and founding director, Congressional Budget Office (1975-83).
Congressman Michael Burgess
Republican,Texas, 26th District
Comments
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if cutting Medicaire is such a great idea the why not do it now? Why not do an incremental increase in cost shifts? Seems like we have one option from the right and that seems lame.
Vote ALL incumbents out of office.
Alice claims to support "competition;" well, why not let anyone buy into medicare, or medicaid for their actuarial cost plus 10-15%? That would provide some price competition to the insurance companies. Also, since the Insurance plans would provide such superior services that everyone would gladly pay the premium--I doubt that, but they claim that, but refuse to test/allow it.
Sophism is easy to see when fair and good ideas are put against it. Sadly, many are willfully blind.
I think the Republicans have made their own bed. They swear allegiance to Grover Norquist not to the working folks. they attack women. They give tax cuts to the Rich.They start wars based on lies. WHY would the average American trust anything they present?? They already do not have about 40% of America (Progressives) they soon will lose another 20% (independents) maybe in a decade or so they will lose the conservatives who are financially underwater. 39% leaving them with that 1%. awful party, awful policies and I will be glad to see the day they become a minority 3rd party of the 1% and very marginalized.
I'm the first caller that called Alice wrong on tax policy. Higher taxes encourage capital intensive production and low taxes encourage capital lite production. Through depreciation and the difference between gross and net income, high top marginal tax rates grow GDP. I'm sure you understand this perfectly, I wish you'd elaborate, I'm just a small businessman who doesn't make enough to exploit this effect, but it's clear to see. That proves the sophism, and the delusion of vast swaths of the American people.
I mean, look at the effective tax rate during the Ike years, they weren't much higher than at any other time. So what happened to that money? I fled into deductible avenues like R&D (Bell Labs) employee pensions, capital expansion and innovation. Unsurprisingly this made those companies incredibly powerful. It's absurd to think that firms would flee this consumer market. Those seeking to earn profits here will cherish those domestic expenditures which only strengthen the firms even if cutting net profits. What I am arguing for is capitalism. What Alice, Norquist and the rest of the think tankers, and sycophants are arguing for is a post modern feudalism. Heck, even Hayek supported national healthcare.
I don't think it makes sense to compare today to the Eisenhower administration.
The US economy has completely changed. We now manufacture more than we ever have but we have fewer people doing it. That's progress.
Just today Amazon announced it is acquiring Kiva. Kiva’s order fulfillment process uses hundreds of mobile robots to bring inventory on movable shelves, reducing the need for fulfillment workers to walk, pick & pack inventory.
We're not going back to the 50s.
Nominal tax rates should be HIGH. Consider that high top marginal rates only hits profitable firms and people with outsized incomes. I'm self employed with a landscape business. If I or any firm are highly profitable, I can lower my tax burden by buying new truck, equipment, office, computer, phone. I can advertise more, conduct R&D, expand--ALL are DEDUCTIBLE. That means that the higher the tax rate, the greater the incentive for me do direct those monies into any deductible avenue. Among those are employee benefits, pensions, and higher wages. That's how we got here. We had tax rates OVER 70% from WW2 till Reagan. Now reflect, what does my theory make any sense?
Consider, it's capital lite production that's encouraged by low tax rates, off-shoring of factories and jobs, cause there's no penalty for profits. See, we must remember the difference between Gross and Net profits. Taxing profitable firms is one of the best policies we can have. Again, throughout history, EFFECTIVE tax rates never got much above 20%. But, considering that payroll taxes have subsidized other taxes by $2.2 trillion dollars; we need higher income taxes, and NOT from the payroll tax paying set. (you do know that those are only taxed on the first $110k.
don't manufacture much at all here, are you missing that we have a substantial trade gap? What TV's, computers, phones are made here? Moving stuff is not real production. Utilities are not real production. In a sense, the only thing that counts is what you can export. Professional services, finance are not real production, they are a tax on the economy. That's why high tax rates have made Germany a capital intensive production powerhouse. Those firms reinvest at a greater rate, pay their workers a higher wage, and innovate ahead of the the world. The high tax rate encourages that.
You're right about capital intensive manufacturing. That stuff's expensive. If we raised the top tax rates on these giant firms, they'd bring manufacturing home, cause they'd want those domestic expenses. When taxes are low, these firms rather seek the lowest cost possible.
You need to advocate for higher taxes among your friends. When you can get them to write their Congressmen advocating for higher taxes, then they'll ignore Grover. But the problem is we keep voting for these people. And you and I are in a good place to start convincing
Scott in Dallas
So tax rates are to go down but the changes will be revenue neutral. There aren't many ways this can happen. Cut services and benefits, which disproportionately hurts people that are most in need, or eliminate the deductions that currently help the middle class. We all know very well that corporate welfare and the military won't be touched.
Do the math, folks.
That's absurd. Here's what Ryan offered last time. $800/mo. Does that sound good to you? Well, it costs $1500/mo. Considering that healthcare costs and insurance costs have increased at twice the rate of inflation, Rivlin's plan would beggar the benefit over the years, as would Ryan's. If that really sounds good to you color me shocked.
Don't let the facts get in the way of a good argument.
This is dated
http://www.nytimes.com/2009/02/20/business/worldbusiness/20iht-wbmake.1....
This is more recent
http://www.nam.org/Statistics-And-Data/Facts-About-Manufacturing/Landing...
I'd rather export a 777 than a TV.
Property taxes should be higher, but so should the homestead exemprtion. See that way we can tax higher end properties. Our tax system is/was pretty terrific, and can be adjusted to tax which ever sector whichever sector we wish. But, there's no doubt that tax burdens have regressed. The most taxed person in this economy earns 100k/yr. For some reason, once you pass that threshold, your burden falls 12%.
the sentiment is good, but it's terrible policy. We SHOULD be running deficits right now, though we should have been running surpluses before this economic collapse. Medicaid part D, which Bush passed, without paying for it, has put a systemic $500b/yr liability on our books.
Consider, if we'd been good Keynesians we would have been running surpluses, interest rates should have risen under Bush. This presumably would have dampened the economy, which would mean our bubble would have been less inflated.
We should indeed average to a balanced budget, but to by fiat force the gov't to adhere to that would make our recession far worse. That is indeed shown in England (austerity) versus Germany (high taxes, strong social safety net) England's economy lags, while Germany is humming along.
I'd rather both. Again, I don't dispute your point, but higher taxes encourage more re-investment by these same firms. And, capital intensive production is also depreciated. The higher the tax rate, the greater the depreciation benefit.
Taxes, fines, regulations and fees are all meant to discourage behavior of a certain sort.
Scott Conner, I hope the democrat party puts forward your solutions as clearly as you do, we know they already agree with them.
I'm not sure they agree. I've become inclined to believe that we have a janus faced oligarchy that rules us. Obama has done nothing, not even to articulate a decent defense of policies he hints at supporting.
"PeteG2 wrote:
Let's remember that federal income taxes amount to only 25% of taxes paid in this country. Property and sales taxes shift the tax burden onto the working-poor and middle-class."
So Pete, you don't think upper income people don't pay property taxes or sales taxes?
They pay a lot more for their mansions than you think bud. Those big ticket items they buy have a sales tax.
Pete continues
"minimum wage worker pays over 30% in total taxes on her $14,500 annual salary"
There income is to low to pay Federal Income tax and state income tax and quess what, they get an Earned Income check.
Funny you didnot mention how much a person pays in Federal Income Tax and State Income Tax.
Exactly right. I love this show because of the expert opinions, not the partisan rhetoric. When details like "voucher system" and "defense spending" get mixed into the analysis with statements like "will hurt seniors" and "unfortunately, it's more of the same", I instantly know that I am not getting quality expert analysis, but am being subjected to one side's pre-determined sales pitch. This couldn't be any more obvious as, like livelystone pointed out, we don't even know the details yet.
I'm an independent precisely because I value fact over being loyal to one tribe or the other and I think that is usually the case with this program. I am frankly disappointed, therefore, as I have come to expect a higher level of intillectual integrity from The Diane Rehm Show.
The panel claims that Mr. Ryan's proposal is a starting point for negotiations. This begs two questions. One is that since Mr. Obama has already introduced a balanced plan to includes both cuts and increases in revenue, why isn't his plan the starting point for negotiations? The other is how is it possible to negotiate a balanced plan with a party that almost to a person has taken a pledge never, ever to increase the overall tax rate no matter what?