Comments on: Open…Open…Open Thread… http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/ The Political Vine is the home of political news, satire, rants, and rumors. Fri, 21 Nov 2008 07:00:32 +0000 http://wordpress.org/?v=2.3.2 By: PCDavis http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-641 PCDavis Sun, 26 Mar 2006 15:28:35 +0000 http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-641 Ah yes, the benefits of republican governance that is enjoyed by the rest of the country. As always concerning things republicanism, follow the money. It's tax time, remember halliburton is spelled with 2 L's. Ah yes, the benefits of republican governance that is enjoyed by the rest of the country. As always concerning things republicanism, follow the money.

It’s tax time, remember halliburton is spelled with 2 L’s.

]]> By: Bob http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-620 Bob Thu, 23 Mar 2006 00:56:07 +0000 http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-620 <i>"Modest sums over time don’t buy the world, but for the average family, they do help a great deal when viewed over a longer period of time."</i> Very true. As for your specific proposal, yes, it does make sense to index deductions and exemptions so that a little inflation doesn't result in an automatic tax increase, however small. The marginal rate cuts I'd have to weigh against their impact on programs and services, of course. Wouldn't want my kids' teachers going hungry, you know. ;-) “Modest sums over time don’t buy the world, but for the average family, they do help a great deal when viewed over a longer period of time.”

Very true. As for your specific proposal, yes, it does make sense to index deductions and exemptions so that a little inflation doesn’t result in an automatic tax increase, however small. The marginal rate cuts I’d have to weigh against their impact on programs and services, of course. Wouldn’t want my kids’ teachers going hungry, you know. ;-)

]]> By: Donald Singer http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-619 Donald Singer Wed, 22 Mar 2006 20:26:32 +0000 http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-619 Bob, Good points, and a realistic assessment of the political river in which tax and economic policy swims. It is indeed up to the elected officials to tell the voters how they will spend the public funds and which, if any, programs they would cut. The purpose of a just and reasonable tax policy is, I think, to raise revenue and serve as an incentive for economic growth, which in turn will produce more revenue. With that point in mind, would it not constitute good economic policy to reduce the number of brackets in the Georgia income tax system to, say, two at 3% and 5% and then index personal and dependent exemptions and the standard deduction to inflation in order to militate against "bracket creep"? The program could be phased in over a period of several years to diminish any jarring disruptions to state revenue. The lower tax rates would allow people to keep, spend, and invest more of their own money, thereby providing significant economic stimulus and greater measure of tax justice for working and middle class individuals and families. Your example of $50.00 a month is instructive becuase it perfectly illustrates how marginal and incremental changes in tax policy could have substantial real-world effects over time. That amount over the course of a year would be a mortgage payment for a lot of people or money added to a child's college fund or savings plan---$600.00 a year over 18 years would be in excess of $10,000 for college expenses with interest, dividends, and capital gains added in. Modest sums over time don't buy the world, but for the average family, they do help a great deal when viewed over a longer period of time. Thanks for the information and your perspective. Best regards, Bob,
Good points, and a realistic assessment of the political river in which tax and economic policy swims. It is indeed up to the elected officials to tell the voters how they will spend the public funds and which, if any, programs they would cut. The purpose of a just and reasonable tax policy is, I think, to raise revenue and serve as an incentive for economic growth, which in turn will produce more revenue. With that point in mind, would it not constitute good economic policy to reduce the number of brackets in the Georgia income tax system to, say, two at 3% and 5% and then index personal and dependent exemptions and the standard deduction to inflation in order to militate against “bracket creep”? The program could be phased in over a period of several years to diminish any jarring disruptions to state revenue. The lower tax rates would allow people to keep, spend, and invest more of their own money, thereby providing significant economic stimulus and greater measure of tax justice for working and middle class individuals and families. Your example of $50.00 a month is instructive becuase it perfectly illustrates how marginal and incremental changes in tax policy could have substantial real-world effects over time. That amount over the course of a year would be a mortgage payment for a lot of people or money added to a child’s college fund or savings plan—$600.00 a year over 18 years would be in excess of $10,000 for college expenses with interest, dividends, and capital gains added in. Modest sums over time don’t buy the world, but for the average family, they do help a great deal when viewed over a longer period of time. Thanks for the information and your perspective. Best regards,

]]> By: Bob http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-618 Bob Wed, 22 Mar 2006 17:09:54 +0000 http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-618 Donald, I agree that the state spends too much money on incentives to attract single, large employers. The rush to throw money at the Nascar museum was also ridiculous, especially considering that the family that controls it was just playing us to pressure Charlotte for more money. As an economist, I can tell you that these kinds of targeted incentives - really preferences for businesses and communities that know how to pull political strings - are not a particularly efficient way of accomplishing economic development objectives. Broad-based incentives are better, but of course, they don't make headlines and no one will pay lobbyists to fight for them. However, I would caution against latching on too quickly to political sound bites. Eliminating corporate income taxes sounds great when you read in the paper than some pol suggested it, but whoever said it either wasn't serious or needs a new calculator. My understanding is that the $400 million of incentives was the value spread over a number of years, for one thing. For another, Georgia's revenues from corporate income taxes are projected at almost $800 million this year. Even if we offered Kia nothing and even if the $400 mil was all cash this year, the best we could do is suspend corporate income taxes for six months, which would have little or no long-term effect on business relocations to GA. As for individual income tax rates, for all practical purposes, GA has a flat tax beginning at relative low levels of income. I'm sure you wouldn't get much opposition from the left to raising the threshhold, making the tax more progressive. I'm not sure, however, that this would have much impact on savings and investment. Even if you exempted another $10k from taxation, you add only $50/month to the taxpayer's disposable income. That's not an argument for not doing it, mind you, just a reality check on the significance of it. More generally, I agree that it is OUR money, not the governments. We may be compelled by law and social compact to contribute our fair share, but the burden is on our elected representatives to handle our money prudently, not wasting it and not spending it on things that are not the proper functions of government. Of course, what is and what isn't a proper function of government is a matter of widely divergent opinions. Which is why we should expect candidates for office, in particular, to be specific about what they think should be cut, rather than letting them get away with "it's our money - we deserve a tax cut" sound bites. Regards. Donald,

I agree that the state spends too much money on incentives to attract single, large employers. The rush to throw money at the Nascar museum was also ridiculous, especially considering that the family that controls it was just playing us to pressure Charlotte for more money. As an economist, I can tell you that these kinds of targeted incentives - really preferences for businesses and communities that know how to pull political strings - are not a particularly efficient way of accomplishing economic development objectives. Broad-based incentives are better, but of course, they don’t make headlines and no one will pay lobbyists to fight for them.

However, I would caution against latching on too quickly to political sound bites. Eliminating corporate income taxes sounds great when you read in the paper than some pol suggested it, but whoever said it either wasn’t serious or needs a new calculator. My understanding is that the $400 million of incentives was the value spread over a number of years, for one thing. For another, Georgia’s revenues from corporate income taxes are projected at almost $800 million this year. Even if we offered Kia nothing and even if the $400 mil was all cash this year, the best we could do is suspend corporate income taxes for six months, which would have little or no long-term effect on business relocations to GA.

As for individual income tax rates, for all practical purposes, GA has a flat tax beginning at relative low levels of income. I’m sure you wouldn’t get much opposition from the left to raising the threshhold, making the tax more progressive. I’m not sure, however, that this would have much impact on savings and investment. Even if you exempted another $10k from taxation, you add only $50/month to the taxpayer’s disposable income. That’s not an argument for not doing it, mind you, just a reality check on the significance of it.

More generally, I agree that it is OUR money, not the governments. We may be compelled by law and social compact to contribute our fair share, but the burden is on our elected representatives to handle our money prudently, not wasting it and not spending it on things that are not the proper functions of government.

Of course, what is and what isn’t a proper function of government is a matter of widely divergent opinions. Which is why we should expect candidates for office, in particular, to be specific about what they think should be cut, rather than letting them get away with “it’s our money - we deserve a tax cut” sound bites.

Regards.

]]> By: Donald Singer http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-617 Donald Singer Wed, 22 Mar 2006 15:21:16 +0000 http://politicalvine.com/politicalrumors/rumors/openopenopen-thread/#comment-617 Bob, You make an excellent and accurate point that government has a number of legitimate functions for which it needs revenue. I don't dispute that point. My more general point is that government at all levels does far more than it needs to do and spends a great deal more money than it should. This money in the form of tax revenue, including income tax revenue, comes from individuals and families who, by their earning the money, have a powerful claim on it. There is, as you rightly note, considerable waste in government that could be largely eliminated. Beyond the waste, government simply spends lots of money taken from tax payers on welter of programs and initiatives that ought not to exist. For example, Georgia just landed the Kia Plant in West Point by offering $400 million in tax breaks and incentives. For that kind of money, the legislature could have reduced or even eliminated the state corporate income tax, thereby making Georgia a magnet for all sorts of businesses, large and small, not just a big multi-national conglomerate. Moreover, the top Georgia income tax rate of 6% applies to every dollar earned over $20,000 dollars. Would you not concede that this relatively high marginal state individual income tax rate and a low threshold at which it applies are significant disincentives to savings and investment by individuals and families? Personal and dependent exemptions and the standard deduction in the Georgia income tax code are not indexed for inflation, so each year Georgia taxpayers are subject to "bracket creep" in which a diminishing portion of their income is shielded from taxation. Once more point: tax policy has to meet a standard of reason and justice, and from my perspective, there is always justice in structuring the tax code so that individuals and families are able to keep more of their hard-earned money without forking it over to the government, which will always find a reason to spend what revenue it has, and more. The burden, and it's a substantial one, should always be on the government to justify why it needs more of your money, not on you to justify why you should be permitted at the sufferance of government to keep the wealth for which you have labored. Thanks for the comments and thoughts. Bob,
You make an excellent and accurate point that government has a number of legitimate functions for which it needs revenue. I don’t dispute that point. My more general point is that government at all levels does far more than it needs to do and spends a great deal more money than it should. This money in the form of tax revenue, including income tax revenue, comes from individuals and families who, by their earning the money, have a powerful claim on it. There is, as you rightly note, considerable waste in government that could be largely eliminated. Beyond the waste, government simply spends lots of money taken from tax payers on welter of programs and initiatives that ought not to exist. For example, Georgia just landed the Kia Plant in West Point by offering $400 million in tax breaks and incentives. For that kind of money, the legislature could have reduced or even eliminated the state corporate income tax, thereby making Georgia a magnet for all sorts of businesses, large and small, not just a big multi-national conglomerate. Moreover, the top Georgia income tax rate of 6% applies to every dollar earned over $20,000 dollars. Would you not concede that this relatively high marginal state individual income tax rate and a low threshold at which it applies are significant disincentives to savings and investment by individuals and families? Personal and dependent exemptions and the standard deduction in the Georgia income tax code are not indexed for inflation, so each year Georgia taxpayers are subject to “bracket creep” in which a diminishing portion of their income is shielded from taxation. Once more point: tax policy has to meet a standard of reason and justice, and from my perspective, there is always justice in structuring the tax code so that individuals and families are able to keep more of their hard-earned money without forking it over to the government, which will always find a reason to spend what revenue it has, and more. The burden, and it’s a substantial one, should always be on the government to justify why it needs more of your money, not on you to justify why you should be permitted at the sufferance of government to keep the wealth for which you have labored. Thanks for the comments and thoughts.

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