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GUEST COMMENTARY: Why the left should support a consumption tax

Tuesday, May 3, 2011 | 1:36 p.m. CDT

Now that the dust has cleared on another tax season, I’d like to address readers who are generally of a liberal/progressive perspective on a topic of great controversy: the so-called “Fair Tax” reform idea that continues to gain traction in Missouri.

Yes, it’s clearly pushed by free-market advocates, the Tea Party crowd and more conservative groups than you can shake a stick at. However, could the idea of eliminating the state’s personal and corporate income taxes, replacing them with a “revenue neutral” consumption (sales) tax, possibly end up supporting some of your overall societal goals? For the open minded, here goes.

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Complexity hardest on the poor

Every taxpayer spends hours filing their Income Tax return, and yet it is still difficult to be in total compliance due to its endlessly increasing complexity. In fact, the poor, typically lacking sufficient education, find the forms especially difficult. There are free preparation services for lower-income filers, but many don’t know about them, have access issues, are still intimidated, end up hiring a tax professional (with money they can’t afford) or just don’t file at all.

By eliminating the income tax, we would eliminate this compliance burden. By collecting sales taxes at the point of sale, we shift the limited remaining tax filing responsibility onto businesses.

Consumers pay all the taxes anyway

On the surface, no corporate income tax seems outrageous, as the people will pay all the taxes. But, people already do.

By taxing corporate profits now, or at least trying to (see: GE recently or Goldman Sachs before them, etc.), do you think the “fat cats” just sit there and take it, shrugging their shoulders at lost net profits? Goodness, no. They simply raise prices; that is, as the market will allow. That market that might allow, by the way, is you and me buying an apple, a car or whatever. The consumer pays the money to the business that then pays the tax.

Not more regressive

The political left universally supports a progressive income tax, so the “Fair Tax” is maligned because it is said to be regressive. Yes, while the Federal Income Tax Code has many upper income brackets to accomplish this progressively, please realize that with Missouri’s top bracket at the archaic $9,000/year, our state essentially has a 6 percent flat tax.

There is even an argument that the current setup is a little regressive because the poor need that 6 percent of income to buy the necessities of life, whereas 6 percent to a wealthier individual is likely just extra disposable income.

So the fair tax proposal, seeking to not increase nor decrease the progressivity overall, has a “prebate” feature, whereby lower-income folks would get a monthly check in advance to cover the estimated Sales Tax for basic necessities.  With the prebate, it is arguable that the fair tax might actually end up being slightly progressive in practice.

This would move Missouri residents from one flat, if not slightly regressive, income tax system to a different form of a flat, possibly slightly progressive, sales tax model. I realize this is a different perspective.

Corporate welfare thrives off corporate income

All kinds of Americans turn populist in light of corporate welfare programs. Since the income tax code is the typical conduit for these schemes, and reform is hopeless, let’s abolish the whole thing.

Now, while the right often criticizes “social welfare,” the fair tax does not effect the government’s spending side whatsoever. So while the left’s social programs are not touched, the “corporate welfare” that hides out in the cesspool of income tax credits would become extinct.

Enourages sustainable living

In essence, a tax is a cost. So taxing something, by definition, increases its cost, which discourages its usage. Like the proposal to raise the cigarette tax — increasing the cost of Marlboro’s would obviously prompt more smokers to quit an increasingly expensive habit.

Likewise, if hyperconsumption in general is environmentally destructive, then consumption should be taxed. Even better, the only products the fair tax applies to are new products. What a great incentive for everyday people to instead repair things, shop at garage sales, grow a garden, share, salvage. Less consumption of new products means less made-in-China, Walmart stuff and less consumer demand for big-box stores. In fact, don’t spend your time protesting at city hall to prevent a new super center, instead join forces with the Tea Partiers for once to support fair tax.

Compatible with democratic values 

If one favors democratic values, then an open, transparent tax code that is easily understood by the average citizen should also be a priority. In a just society, a citizen should know what their cost of citizenship is – which is practically unknowable now.

The complexities that have grown out of the income tax code have somewhat backfired on its proponents that desire social justice. It has become a corporate welfare platform; it enriches lawyers and accountants that many citizens fear they must depend on to be compliant, and it ends up causing many citizens to resent government overall – not to mention leading to fights in capitals nationwide.

So, oddly enough, perhaps liberals and progressives should re-examine the fair tax, as it might be a partial solution for their priorities, if for quite different reasons than right-wingers espouse. But good public policy tends to be a win-win.

Steve Spellman hosts “The Mid-Missouri Freedom Forum” on 89.5FM KOPN radio Tuesday nights from 5 to 6 p.m.; Steve realizes every kind of tax is unfortunately collected by force, regardless. MU economics graduate student Abhi Sivasailam, who has studied this issue extensively, also contributed to this article.


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Comments

Ellis Smith May 3, 2011 | 2:33 p.m.

A consideration is this: WHAT sales items are to be taxed? All of them, or just some? Excluding tax on food items purchased at grocery stores or other grocery outlets could be considered more "fair" to low income families, as food purchases do - or at least should - constitute a greater portion of their expenses.

Some states have had and probably still have such exclusions. When we lived in Ohio years ago, shoppers at super market checkouts had to lay all purchased items which qualified as "food" on the conveyor belt first, so that the cashier could total those purchases first, then "taxable" items, if any, were rung up next.

Needless to say, that procedure was a real pain in the butt, but it's no problem with bar code scanners: you can put items on the belt in any order and the electronic bar code system will identify each item and can be programmed to tax only those which are taxable. Let's hear it for industrial engineering!

I have to say that it appears Democrats are in the process of doing an "about face" in their stance on what is considered a "fair" tax. I am shocked, SHOCKED! :)

(Report Comment)
Mark Douglas May 3, 2011 | 7:22 p.m.

Is your article about the Missouri state Fairtax-- or national? It's hard to tell from your piece.

If you are talking about the National Fairtax, it sounds great, but is more of a polticial hoax and stunt, not a serious tax plan.

The trouble is MATH. A 23% tax on personal consumption, on people who can pay it, would only bring in about a trillion dollars. Granted, that's a wagon load of money, but it's barely 1/3 of what a tax system would need to gather to be "revenue nuetral" as Fairtax claims it is.

Fairtax uses good old fashioned double talk and bs to PRETEND they can get 3 trillion.

How do they stretch the 1 trillion into 3 trillion?

Easy. They tax the government. Tax Los Angeles city goverment 700 million, Tax Missouri state government 5.25 Billion. Yes, Missouri STATE GOVERNMENT WOULD OWE 5.25 Billion to the federal government.

Did you know that? It's in their fine print, it's even sorta-kinda in their books. Most importantly, it's how Fairtax math "adds up".

In fairtax fine print, there is a truly massive tax on every city government, county, township, state, and even on the federal government.

Fairtax fine print (HR 25 section 2, subsection 7) has the heart of the deception. They define the government as a person, and tax that "person." I kid you not.

Also, in Fairtax The Truth, by the same author (Neal Boortz) page 138 "Under our plan all state and local governments will pay to the federal government a tax on all their spending -- including all goods and services and purchases of labor (wages". Both those are from memory, so this is paraphrased.

Of course, a lot of people know Fairtax is a farce, for this and other reasons. It's been exposed over and over -- including by Dale Jorgenson -- Fairtax claimed Jorgenson was the "world's foremost expert" in embedded taxes, and they based their plan on his "research".

Turns out Jorgeson said Fairtax had it ALL WRONG. Jorgenson, their own "expert" does NOT support them whatsoever, does not support a national sales tax.

I urge you to find out more about Fairtax -- and learn a lesson from it. Not an economic lesson -- a lesson in gullibility.

We need a new tax code, that is true. We don't need more balderdash and BS.

I will post a video on youtube soon to explain this further.

http://fairtaxfineprint.blogspot.com/

(Report Comment)
Mark Douglas May 3, 2011 | 7:42 p.m.

ITs very true we need a new tax code -- that is the only thing Fairtax has right. From that point forward, Fairtax, the national plan, is more of a hoax.

We can have a simple tax code -- 1 page tax return, very clear, very simple. But Fairtax is not it.

Fairtax has a massive -- and impossible - tax on city county and state governments. It's impossible because only PEOPLE pay taxes, yet fairtax fine print puts taxes on all government spending, including Medicare spending, government wages, including military wages, all government wages. It's really preposterous BS.

They would need a Constitutional Amendment to tax state governments --- and guess who has to approve Constitutional Amendments? 3/4 of the states must approve it!!

Yet Fairtax has put massive efforts into covering up this goofy deception, they have never told even one city, town, village, or state about this massive tax. Do you seriously believe 3/4 of the states are going to pass a tax plan that makes them pay 400-600 billion, and the Fairtax spokesmen never even told them? It's goofy. It's real goofy.

When you realize how goofy Fairtax is, you can maybe learn how easy it was too fool you with nonsense. Utter nonsense. No, Fairtax can never pass, because it's own leaders will never dare show up for hearings about it. It's that goofy. But the techniques they used to fool you, politicians and other con artist use every day -- successfully.

Learn this -- the devil is always in the details.

(Report Comment)
John Schultz May 3, 2011 | 9:41 p.m.

Mark, it is exceedingly clear to me that Steve (whom I know, just pointing that out) is talking about the Missouri "fair tax" that some have proposed.

I'm not a fan of the federal Fair Tax proposal as it does nothing to reduce the size of government, but your argument seems to be lacking some of the specifics mentioned on pages 138-141 of the Fair Tax: The Truth book, which I received from a local radio host a couple years back. Also the "did they ask?" line seems specious, as if any legislator has ever asked people possibly affected by their proposals if they were OK with a bill or not.

(Report Comment)
Henry Van Gieson May 4, 2011 | 7:11 a.m.

John Schultz,

Your comment is a good example of the dangers of just reading a couple of shoddy marketing books about the Fairtax. You really should read HR25 if you want accurate and unbiased information.

Pages 138-141 of Fairtax-the Truth, totally ignores the fact that Section 704 of HR25 addresses the subject of government competition with the private sector. Any government agency at any level that sells $2500 or more per quarter would be considered a Government Enterprise, and would have to collect and remit the 23% sales tax in the same way as any other private business. There was no need to tax all government consumption, just those entities that are in competition with the private sector.

The real reason that all governments are taxed is simply to make the 23% inclusive sales tax claim more believable. Adding $2 trillion in taxable government consumption to the Fairtax base is a not so clever way to keep the sales tax rate low. It wasn't necessary and if adopted, would raise everyone's taxes. Governments don't pay taxes, just us folks. Mark Douglas is right on the mark!!!

(Report Comment)
Daar Fisher May 4, 2011 | 9:25 a.m.

How anyone can defend a tax system that is clearly slanted to the benefit of the rich (who can afford tax attorneys, and off-shore agents) and that hides corporate burden in higher prices (and/or reduced dividends to workers' retirement holdings, and/or reduces jobs where VAT-advantaged foreign tax systems benefit imports over American products with consequent lost jobs) is beyond me.

Research on the FairTax shows the following:

Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system
[KR] ( http://snipr.com/kotcomparetaxrates ).

Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively
[JK] ( http://snipr.com/kotftmacromicro ).

Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax
[THBPN] ( http://snipr.com/lessregress ).

(Report Comment)
Jimmy Bearfield May 4, 2011 | 12:34 p.m.

"How anyone can defend a tax system that is clearly slanted to the benefit of the rich (who can afford tax attorneys, and off-shore agents)"

It's also slanted toward the low end: Between the EITC, child-care credit, temporary credits/deductions such as Making Work Pay and numerous other bennies -- including those that disappear as one's income increases -- it's no wonder that nearly half of all taxpayers owe no federal income tax and that many of them get a check funded by the other ~50%.

(Report Comment)
Henry Van Gieson May 4, 2011 | 4:07 p.m.

Daar Fisher,

Quoting all that biased Fairtax research may give you a warm and fuzzy feeling, but as a volunteer AARP tax preparer with 11 years experience, let me tell you about a group of senior retirees that won't be too happy about the Fairtax.

For example, consider a retired couple living comfortably on $26,000 from two SS checks plus $20,000 from income from their nest egg. After deducting their standard deduction amount and their two person exemption, they pay no federal tax. Under the Fairtax, with a total income of $51,000 (including their prebate of $5,000), they would pay $11730 in sales taxes minus the $5,000 prebate for a net federal tax of $6730. Zero federal tax versus %6730! Which do you think they would prefer?? There are millions of retirees in this situation, so tell me again how research shows everyone benefits from the Fairtax?

Don't believe everything you read, including my analysis. Just do the numbers for yourself and come to your own conclusions!!

(Report Comment)
Jimmy Dick May 4, 2011 | 4:59 p.m.

This isn't a fair tax. It's a Notfairtax. It's another trick to shift more of the tax burden onto the shoulders of the lower and middle class. The only real fair tax is to tax the top 1% of the earners in this country because that's where 25% of the money is at. They've got an incredible amount of loopholes designed to limit their actual tax amounts. It is not a coincidence that runaway deficits began with Reagan just because he cut taxes for the wealthy and shifted the tax burden onto the middle class. It is a fact. It's time to raise the taxes again on the upper class.

(Report Comment)
Jimmy Bearfield May 4, 2011 | 8:18 p.m.

"The only real fair tax is to tax the top 1% of the earners in this country because that's where 25% of the money is at. They've got an incredible amount of loopholes designed to limit their actual tax amounts."

So do the lower and middle classes, which is why nearly 50% of taxpayers owe no federal income tax. That ~50% is a helluva lot more than just the top 1%.

(Report Comment)
frank christian May 5, 2011 | 8:56 a.m.

Jimmy Dick - "It is not a coincidence that runaway deficits began with Reagan just because he cut taxes for the wealthy and shifted the tax burden onto the middle class. It is a fact." I question whether you would know a fact if you saw one.

Here are the facts. Reagan's "across the board" tax cuts, to you, that's tax cuts for Everyone, nearly doubled the revenues to the Gov't. The incredible spending of the D' controlled Congress even above those revenues created the "runaway deficits" you refer to. This discussion has been repeated time and again, around here and am sick of reading the liberal propagandists among us, trying to leave the near criminal Democrats out of it.

(Report Comment)
Jimmy Dick May 5, 2011 | 12:14 p.m.

And as always we have to point out the actual facts to you every time. Reagan's success came from the recovery from the recession. The recovery generate more tax revenue. You can't cut taxes and expect tax revenue to increase. That so called fact you and others point out is not a fact. You just happen to miss the part about why the revenue went up. Reagan's tax cuts shifted the tax burden from the upper class to the middle class. That's a fact. The numbers prove it. The runaway deficits come from the Republicans. The numbers show that as well.

(Report Comment)
Jimmy Bearfield May 5, 2011 | 12:21 p.m.

And let's not forget that Clinton lobbied for and got a tax increase that went all the way down to incomes of $30,000, or that Bush II lobbied for and got 1) tax cuts that were across all brackets 2) increases in deductions and credits such as the EITC, child care, etc. The Bush-era cuts are a major reason why nearly 50% of taxpayers have no federal tax liability.

(Report Comment)
Mark Foecking May 5, 2011 | 12:34 p.m.

frank christian wrote:

"Here are the facts. Reagan's "across the board" tax cuts, to you, that's tax cuts for Everyone, nearly doubled the revenues to the Gov't."

http://www.taxpolicycenter.org/taxfacts/...

Historically, revenues have grown every year, and if you look at any one President's term, we see revenues increasing generally at a similar rate as during Reagans two terms (whether you look at it in constant or current dollars).

Whaat did change was spending, and this probably accounts for ma lot of the economic growth during Reagan's terms, e. g. , all those infrastructure improvements, military spending, and other government contracts. It was also a time of low oil prices and increasing supply, which is associated with strong economic growth.

Tax cuts had nothing to do with Reagan's economic recovery. Strong GDP growth was also experienced during the '50s, when top tax rates were near 90%. It's far more complicated than just shrinking government.

DK

(Report Comment)
frank christian May 5, 2011 | 2:01 p.m.

Give it up Mark. Your chart, which someone drags out every so often to try to prove something shows that 1980, Reagan elected, Gov't collected 517B$. By end his tenure it was 909.2B$. Last year even with all those tax cuts, Reagan, "Clinton", Bush, our Gov't collected 2,162.7T$ For anyone to claim that reduced tax rates had nothing to do that additional flow of money to the U.S. Treasury is ludicrous.

"Whaat did change was spending, and this probably accounts for ma lot of the economic growth during Reagan's terms,". Obama has "stimulated" our economy with nearly a trillion of borrowed money and his "growth" still has not reached 3%. Far more than that must occur to bring our unemployment rate to acceptable levels (like 4.6 of Bush's era).

I said "give it up". Now, please, spare us!

(Report Comment)
fred smith May 5, 2011 | 3:49 p.m.

Federal revenue in billions under Reagan: 1980 - 517, 1981 - 599, 1982 - 617, 1983 - 600, 1984 - 660, 1985 - 734, 1986 - 769, 1987 - 854, 1988 - 909, 1989 – 991

Federal Spending in billions under Reagan: 1980 - 590, 1981 -678, 1982 -745, 1983 - 808, 1984 -851, 1985 -946, 1986 -990, 1987 -1004, 1988 -1064, 1989 – 1143.

There was no problem with federal revenue under the Reagan tax cuts the problem was all the SPENDING with democrats holding the purse strings.

Government spending does not grow an economy, which President Obama has proven with his lunatic, mad-man spending spree. Government does not produce economic growth because they put nothing on the shelves they only buy.

For example if I own a widget factory and I sell my entire inventory I would have a nice bank account. But, if I do not use some of that money to produce more widgets to sell my company will fold. It will fold because I no longer have a revenue stream. I may have created some stimulus with all the new office furniture, telephone systems, and corporate jet that I purchased but that stimulus is small short lived compared with what it could have been.
If instead I had used some of the money to produce more widgets to sell then my income stream would be uninterrupted and the resulting stimulus would have been increased in terms of impact and duration.

The government has no widgets to sell and therefore cannot replenish its own coffers. Any stimulus from government is then limited in both impact and duration.

(Report Comment)
frank christian May 5, 2011 | 5:01 p.m.

Jimmy Dick - I missed your non-answer in dealing with Mark F. I got "we have to point out the actual facts to you every time", then nothing but your absolutely false rendition of the facts as you have picked them up somewhere. "You can't cut taxes and expect tax revenue to increase." Fact is, revenue has increased every time taxes have been cut in the history of our country. You could find this out if you'd read History instead of some progressive's account of how more and more taxes are needed. Here is a good start:

http://www.heritage.org/research/reports...

I'll read your "we" who backs up all the crap you have posted if you can point the way.

(Report Comment)
Gregg Bush May 5, 2011 | 5:06 p.m.

Careful, Mark. There are those who don't like Math committed in public places.

All said, the "consumption tax" or "fair tax" or "flat tax" or "retail tax" - whatever the current permutation is - is something that I don't like for the simple fact that consumers are not the only sector that "consumes". The "consumption tax" should apply to any sector of the economy that "consumes". Manufacturing consumes raw materials and other refined goods. The service sector consumes "labor" as a function of time. So I would support something like this if it was an across-the-board consumption tax - not just the retail level.

(Report Comment)
Jimmy Dick May 5, 2011 | 5:34 p.m.

Well Frank Christian, the first thing you need to do is stop reading the Heritage Foundation's myths and stick to real history. We teach it in college. I realize that might be too advanced for you, but hey, you have to use your brain if you want to make a real statement. Your right wing guys keep leaving out the economic part of their numbers. Again, Reagan experienced a period of economic growth which he did not create. Economic growth leads to increased tax revenue. You can see this today because there isn't economic growth therefore the tax revenue is down. You can't keep cutting taxes and riding the economic growth wave while saying cutting taxes yields higher tax revenue. It doesn't. If it did we'd slash them in a heartbeat. Since it won't work we need to do something else. Study the progressives. They're the ones that have ideas. The conservatives are the ones who are stuck trying to keep old ideas around and trying to maintain the status quo. The point is you can't maintain it. Change is inevitable and the times are a'changing.

(Report Comment)
Jimmy Dick May 5, 2011 | 6:16 p.m.

Here you go Frank. Some numbers and words from a source that doesn't have an axe to grind either way. http://eh.net/encyclopedia/article/Smile...
One word of caution regarding using the Heritage Foundation. I used to read their output, but as I caught them selectively using only the facts that supported their views I discontinued that practice. Both the left and right are equally guilty of misrepresenting the facts when it comes to promoting their viewpoints. This link takes you to an article on the 1920's and the economy in that period. An economy is a difficult beast to understand and we still don't understand the Great Depression completely. We may never know the exact reasons for its beginning. We do know that in the '20s the US had a tremendous industrial capacity working which helped contribute to the growing economy. Tax cuts alone cannot generate the income tax revenue. That is a total myth. There are many other factors at play which are being ignored. That's the part that I don't like when I hear the right say tax cuts are the answer. They aren't.

(Report Comment)
frank christian May 5, 2011 | 7:18 p.m.

Jimmy Dick - I'm sorry, but if you intended to impress with,"We teach it in college." Not stupid me. You and the one link you have exposed us to, have proudly announced that only "a period of economic growth" can add revenue to the Fed Gov't. Neither you or your link mentioned the TAX CUTS that were instituted before those "periods of economic growth". You can falsely attribute it to the production of the automobile (because Henry Ford closed his factories for 6 months?), or the low price of oil, whatever, try to grasp A. Mellon's comment on the tax cuts of the 20's, another fact, Heritage found convenient to use in their disclosure of true history. (don't bother me with criticism of Heritage unless they are erroneous in fact.)

According to then-Treasury Secretary Andrew Mellon:

The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.

"and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people." This, in the opinion of most, I believe, is why your progressives demand ever increasing taxation of the people.

Disagree? Tell me how, the people will benefit from the progressive solution. This will be hard, I know, because none of your bunch ever mention the "people" in your dissertations, only Government.

(Report Comment)
David Karr May 5, 2011 | 7:20 p.m.

Frank Christian:

Avoid the post-hoc fallacy: "A" occurs before "B"--therefore "A" is the cause of "B."

~~~~~~That's what you commit when you imply (A) Reagan cut taxes, after which (B) revenue shot up. You need to demonstrate the actual causal connection through evidence, not chronology. Otherwise, you're just not making a logical argument.
~~~~~Show that non-tax-cut-related revenue was less significant than tax-cut-related revenue, and you'll do much for your argument.

all best,
David

(Report Comment)
Jimmy Dick May 5, 2011 | 8:14 p.m.

Frank, try to read the entire article. The tax cuts are featured prominently in it. I realize the use of many facts confuses you, but you really have to use more than one set of numbers to base a conclusion. Your argument continues to fail the test of logic because you jump to your conclusions without looking at any other possible reasons as to the tax revenue increases.
If you want to keep quoting out of the extremely biased Heritage Foundation my suggestion is to go buy a good shovel. You can use it to dig your hole or shovel the crap they come up with.
As for the myth that when taxes are high they don't get paid, I point to the fact that taxes are low today and billions of dollars still escape through the loopholes which favor the wealthy.
If we closed the loopholes we wouldn't need to raise taxes now would we?
So back to the Notfair Tax. You can't shift the tax burden to people who don't have the money to begin with. That's just stupid.

(Report Comment)
Jimmy Bearfield May 5, 2011 | 8:36 p.m.

"If we closed the loopholes we wouldn't need to raise taxes now would we?"

Of course we would because even if federal taxes took 100% of all income for everyone making $250K+, it still wouldn't be enough to cover the deficit, let alone make a big dent in the debt, too. To do that, you'd also have to eliminate the numerous loopholes that benefit lower brackets, such as the EITC and child-care credit.

(Report Comment)
frank christian May 5, 2011 | 9:04 p.m.

David - Since you added "all best", I assume you mean to help and you have my thanks, but, I'm not trying to make a logical argument, I am relating history as it has happened. Only progressives are arguing about it with "their, logic". I was earning $275.00 per week when
Tip O'Neal allowed "reaganomics" to pass by one vote in the House and was glad to get my $4.+ per week "tax cut for the rich". Later I was laid off that job but Ronald Reagan had been preaching entrepreneurship for every American to strengthen our economy and ourselves. My wife and I with a little thought and a lot of work opened and operated two small (little) businesses which earned us the limited, but enjoyable retirement we now have.

David, the progressives (not called that then) were at work,(I have posted erroneous claims from that era), but there was no doubt that Reaganomics, dropped from media lingo early on, created 19M jobs and doubled the revenue to our Gov't. The deficits in spending were caused by D' controlled Congress and added to our debt because Reagan insisted on borrowing the money, rather than "print" it, as did Carter administration, causing stagflation, 10-12% inflation on every item purchased every year it engulfs our economy. The "logical argument" should be , why on earth do we re-elect those of a political party which shows the intent, every time, of creating the same economy destroying policies that Carter gave us?

(Report Comment)
frank christian May 5, 2011 | 9:41 p.m.

Jimmy Dick - You are the confused. I'm not spending another minute trying to find tax cuts among the invention of the auto, expansion of suburbs, radios, and appliances as the reason for growth in the 20's. Does a limit on your collegiate gained knowledge prohibit you from commenting on our economy beyond the 1920's? "As for the myth that when taxes are high they don't get paid, I point to the fact that taxes are low today and billions of dollars still escape through the loopholes which favor the wealthy." Another limit on your knowledge? The economy destroying regulation imposed by progressive Democrats over years and increased by this administration are causing the escape of billions thru "loopholes". Tonight, again, the trillion dollars held on sidelines by businesses were talked about.
They are held back because no one knows what our Gov't is going to do next.

You need to get back to your "not fair tax". You have not made one point here.

(Report Comment)
Jimmy Dick May 5, 2011 | 10:06 p.m.

Frank, if you play a piano like you argue this subject it's only one note. I'd say go find some more facts to support your illogical argument, but I wouldn't want you to have a brain cramp. It's pretty obvious you won't read anything that has a different point of view because that would be too much of a challenge.

(Report Comment)
Mark Foecking May 6, 2011 | 3:07 a.m.

fred smith wrote:

"Government does not produce economic growth because they put nothing on the shelves they only buy."

Doesn't military spending help private defense contractors? Don 't members of the armed forces spend money with local private businesses? Doesn't federal spending for infrastructure, military bases, and research centers bolster local economies by supporting private businesses? Don't federal employees spend money with local private businesses (and this would apply to SS recipients and EBT people also)?

I simply don't accept that government spending isn't often good for the economy. I see the Libertarian point that they would rather be free to spend their money as they wish, but that's a separate issue from the economic effects of government spending (If I've misstated the Libertarian POV, please correct me, John).

DK

(Report Comment)
Mark Foecking May 6, 2011 | 3:22 a.m.

frank christian wrote:

"For anyone to claim that reduced tax rates had nothing to do that additional flow of money to the U.S. Treasury is ludicrous."

From 1950 to 1959, federal revenues doubled even under a top tax rate of 90%. That's very comparable economic performance to what occurred under Reagan or Kennedy. Why didn't the economic performance of the '50s more closely resemble today's (and our top tax rates are less than half of what they were then)?

"Obama has "stimulated" our economy with nearly a trillion of borrowed money and his "growth" still has not reached 3%. "

That's more because our energy supply is constrained (for many reasons), and won't support a high level of economic growth.

DK

(Report Comment)
Mark Foecking May 6, 2011 | 5:42 a.m.

Jimmy Dick wrote:

"If we closed the loopholes we wouldn't need to raise taxes now would we?"

Unfortunately, not even close. We could confiscate the entire yearly income of the top 500 earners in the US and it still wouldn't cover the deficit.

DK

(Report Comment)
Jimmy Dick May 6, 2011 | 6:54 a.m.

We're not going to eliminate the total deficit overnight. Step one is just to spend less than we bring in. There's a myriad of ways to do that. Closing loopholes is just one part of the process.

(Report Comment)
Jimmy Bearfield May 6, 2011 | 7:47 a.m.

"Step one is just to spend less than we bring in."

Agreed, but we both know that won't happen. So I have no interest in sending even more of my hard-earned money to Washington so they can continue spending willy-nilly.

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frank christian May 6, 2011 | 8:06 a.m.

Jimmy Dick - I have decided to continue this "tit for tat" for as long as you wish.

For all your "holier than thou" comments, you have produced nothing to convince anyone that the programs of tax cuts discussed and passed by the several Congress's and signed by the concerned Presidents, in order boost the economy, create jobs and thus, increase the flow of revenue to the Treasury, have not done exactly that. Oh yes, there was the meaningless piece about the 20's from a person named Smiley at Marquette U. Give me a break!

"We're not going to eliminate the total deficit overnight." Democrats and Obama have proven time and again, they have no intention of eliminating "total" deficit. From Clinton forward to today, their only concern is/has been the ploy to "reduce the deficit" in the hope of alleviating the fears of the people, show "they care". Obama's budget projects 9.2T$ in new debt over the next ten years. Why am I arguing with you whether Republican methods of reducing Debt have worked or not? The Federal Budget has been balanced, our debt reduced, 4 years out of the last 60. Republicans controlled Congress and passed the legislation, Taxpayers relief Act and Balanced Budget Act of 1997, all four of those years. If you believe differently you better study the English language, Then read something "with a different point of view" What say you, Big Time?

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Jimmy Dick May 6, 2011 | 10:21 a.m.

Easy. Notice how the Republican controlled government managed to blow away that act from '97 and spend their brains out from 2001 to 2009? Can't blame that on Democrats. Don't even try. Also, eliminating the total deficit is something that will take many years. Don't worry so much about it. You seem to think it's a huge deal. History shows us where many countries have had deficits that make this one pale in comparison. They got them taken care of. The idea is that right now the Republican plan isn't a sound plan. What good is cutting spending while wiping out the economy? I voted for some Republicans to create jobs, not to keep arguing about the deficit. The job situation and economy are the first priority. The Republicans need to get their priorities in line.

(Report Comment)
John Schultz May 6, 2011 | 10:36 a.m.

Frank reminds me of Rush trying to defend Dubya's drunken sailor spending. A former coworker and I used to lunch togther, and his car radio would often be tuned to KFRU so we would listen to a bit of Limbaugh on the way to the pool hall we ate lunch at. A caller asked Rush about Bush's first budget, which increased federal spending yet again, and asked why Bush wasn't cutting government spending since he had Congress under Republican control. Rush's rejoinder is that it increased less than if Clinton had somehow remained President for a ninth year. That's one of the defining moments where I realized Republicans at the federal level are mostly hypocrites about spending cuts.

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frank christian May 6, 2011 | 11:36 a.m.

Jimmy Dick - Your false statements of today:

"History shows us where many countries have had deficits that make this one pale in comparison. They got them taken care of." We are being compared to Greece and Portugal, both of which have received bail out loans from IMF, we have received a negative warning on our credit rating from S&P, the liberal gov'ts of the EU are CUTTING spending to get their houses in order and your lame comment is "the Republican plan isn't a sound plan."

"The job situation and economy are the first priority." Unemployment remains at 8.8% BO's budget spending will bring the deficits to 90% of GDP. "What good is cutting spending while wiping out the economy?" What economy? Try to give me something I can chew on.

(Report Comment)
frank christian May 6, 2011 | 11:55 a.m.

John S. Rush has criticized W, as well as, HW Bush more than you ever have, to my knowledge, around here.

Tell me what libertarians have done for us, besides help foist Obama on us, through Ron Paul's refusal to support J. McCaine, because McCaine supported our necessary wars, while Paul doesn't. The vote was 56-42%. Since libertarians don't control any where near that margin of the vote they didn't give it to BO, but Paul sure didn't help.

(Report Comment)
Jimmy Dick May 6, 2011 | 12:00 p.m.

Frank, we're not even close to being Greece and Portugal. If you want to believe the fearmongering right who are just trying to spin this situation into a poltical victory because they think people are stupid, then that's your choice. It's pretty obvious that the Republican's plan is to ignore the economy while focusing on a mythical deficit issue that isn't as bad as it really is. Stick to the main issue which is the economy and stop trying to lie to us about the deficit issue which isn't the priority at the moment. When I see Republicans doing something about the economy then maybe I'll start paying attention to them again. They're not. They're being little petulant children.

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John Schultz May 6, 2011 | 1:10 p.m.

Frank, maybe you can blame the Republican voters who elected McCain in the primaries for his absolute failure against Obama, instead of Libertarians and Ron Paul? Why would Ron Paul support McCain when he's for torture, for sending our soldiers off for needless wars, and in favor of the failed war on some drugs? The only difference between Obama and McCain is that McCain would have had ground troops in Libya by now. They are both statists who don't care one bit about what's good for the country or its citizens, just getting elected and re-elected.

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frank christian May 6, 2011 | 2:25 p.m.

J. Dick - "we're not even close to being Greece and Portugal". So the S&P warning is good news, right?
5T$ in new debt in two years, then 10T$ more over the next ten is just what we are looking for, right?

"Republican's plan is to ignore the economy while focusing on a mythical deficit issue". If you think that ever increasing debt has nothing to do with the condition of our economy then you are dumber than I could have ever imagined. And it ain't only R's concerned with out of control increasing debt. Ultra Liberal Senator M. Udall has introduced a balanced budget amendment. "The first in years for a Democrat." Plus,

"In March of this year, 41 House Democrats sponsored House Joint Resolution 78, Proposing a balanced budget amendment to the Constitution of the United States."

You apparently plan to continue offering your simplistic opinion as fact. You should know, it isn't working.

(Report Comment)
Jack Hamm May 6, 2011 | 2:29 p.m.

"You apparently plan to continue offering your simplistic opinion as fact."

The irony in this statement is almost too much to handle.

(Report Comment)
frank christian May 6, 2011 | 2:47 p.m.

John S.- McCain was not my choice either, but he is and always has been against torture. The "needless wars" are from your isolationist view which will cause our destruction if accepted as policy. Obama, as they say, was hit in the chops with a big dose of reality, has continued the fight and this morning I heard that the "special force" contingency in ME has recently been increased from 4 groups to 20. This will be an obvious improvement in the way we deal with the terrorism problem.

McCain would not have given us the trillions in new debt and if BO could somehow disavow this progressive agenda, loyalty to unions, disregard for private sector business, etc. (not going to happen), I could love him like a brother.

(Report Comment)
Jimmy Dick May 6, 2011 | 9:01 p.m.

Yep Jack, I have to agree. Frank just can't take the blinders off to see the rest of the world around him. His tunnel vision is legendary. Personally my favorite part of this series of posts was how he criticized people for their lack of understanding history and then criticized them again for using history to show his fact (note the singular use of the word) was not so factual.
"Those that do not study history are doomed to repeat it."

(Report Comment)
frank christian May 6, 2011 | 10:30 p.m.

Jimmy & Jack - Two lemons, unable to quote or write a single sentence that might specifically describe the accusations either may wish to attribute to the error of my portrayal of events, or, my ability to describe them.

Edmond Burke, said "those that do not know history, are bound to repeat it." Jimmy Dick cannot even get that right.

Two lemons, under the tree, rotting away. Too bad.

(Report Comment)
Jimmy Dick May 7, 2011 | 12:08 a.m.

No Frank, I wrote it deliberately. Study history. You might learn something. But then you would have to open your mind to the idea that you don't know what you're talking about as well as learning that it takes more than one fact to make an argument.
Take off your blinders and learn something. You keep repeating the same thing over and over. When confronted with that point you just insult people. That's not a logical argument. That's just being stubborn and obsinate that you're right when it's pretty plain to see you refuse to expand your argument.

(Report Comment)
frank christian May 7, 2011 | 9:53 a.m.

jim dick - Your twisted thinking becomes more apparent with each post. Whatever you think I keep repeating is the "truth", an unknown in your circles. Truth has to be repeated, it doesn't change; that is, until the Keynesian Socialists adapted the Nazi idea of propagandizing their idea until it was accepted as truth. You think you are unique, but you are not at all alone. The propagandists are now called "history revisionists". That what is happening here. I relate the truth, interrupting your attempts to change whatever history or fact necessary to make the failed Keynesian philosophy sound reasonable.

I have produced quotes, facts and references with every post. You have produced nothing except the same tired rhetoric. If you ever did, I suspect it would be P. Krugman, over and over.

Your reference to my insults, washes right off. I have long ago lost count of the insults, foisted on me by only a couple of liberals.

(Report Comment)
Jimmy Dick May 7, 2011 | 10:20 a.m.

Frank, you're just useless. You've produced one and one fact only in this entire series of posts. Plenty of evidence has been presented to you showing that there are many factors that go into economics. You're a true conservative. I define that as one who lacks an education and keeps their mind locked into one mental cycle. Revising history is done because history is being explored and reinterpreted because new facts are presented which require events of the past to be looked at again. You apparently can't handle change because a new fact and a cold glass of water would be too much of a challenge for your limited mind to accept.
You're wrong. You're a one trick pony and it shows. The world is always in a state of change and you are just going to have to get used to that. Your ideas of tax cuts don't hold water so go out and find a new idea. Try to have an original thought, but I doubt you will have one. It might require you to open a book.

(Report Comment)
frank christian May 7, 2011 | 12:14 p.m.

JD - A true Keynesian, you! Mouth about "Plenty of evidence has been presented to you showing that there are many factors that go into economics.". What the hell does that mean? Rather, give me a single sentence, proving the actions of four Presidents and their Congress, allowing people to keep more their own money, to improve our economy, and increase revenues for Gov't., have not been successful to that end. Also, you might advise what my, "one and only fact", is. Anything, you might write, that could address a single subject, with a specific, factual,outlay of the truth, would be an improvement. But, it seems, "You apparently plan to continue offering your simplistic opinion as fact. You should know, it isn't working."

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Jimmy Dick May 7, 2011 | 12:41 p.m.

Thanks for the compliment Frank. I'm done wasting time with you because you're the typical Tea Party windbag. You want a single sentence? It's not possible because nothing that complicated is that simple. That's your whole problem. You want something easy where it can't be done.
Your only fact is your tax cuts.
I've given you one set of facts which explains the 1920's economy and their tax cuts. I'm sorry if it's too complicated for you to understand. A college student would understand it. A college educated person would understand it. Go to college so you can learn and then you will begin to understand concepts which are obviously beyond your limited intelligence.

(Report Comment)
frank christian May 7, 2011 | 12:50 p.m.

Jack Hamm - The above stupidity from Mr Dick, is the definition of an "Elitist". You were wondering earlier, there you have it.

(Report Comment)
Jimmy Dick May 7, 2011 | 9:06 p.m.

No, Frank. It's called educated. Just because you refuse to learn anything you feel like you need to belittle the people that do know more than you. I especially like how you insult Dr. Krugman who definitely knows more about economics than I do, and who beyond the shadow of any doubt knows more than you do on that subject. That's the problem with the Tea Party types. When you have no intelligent response you resort to insults. Judging by the poll numbers regarding the Tea Party's credibility the American people are seeing through the rhetoric and are looking for solutions which the Tea Party does not have.

(Report Comment)
frank christian May 7, 2011 | 11:52 p.m.

jim dick - I feel no need to "belittle" anyone because their education is more than mine. The public school system established in this country early on gave everyone the chance to learn as much as they wish. You remember, Abe Lincoln, Geo. Washington Carver, etc. Is everything below the level of your graduate "achievement", irrelevant? What do you do with those "home schooled", since the system has been taken over by unionist progressives? Stupid "tea party" types, I suppose.

I am writing DR. Krugman down as #1 on your list of references. Waiting for #2. Lets add Arthur Laffer to your list. You must have surely mined enormous amounts of evidence from his involvement in our economy, as well as that with the Thatcher administration that saved the UK from implosion, right? (come on, C. Foote, you next?)

I am conservative. I applaud them, but, have no connection with Tea Party, and have quit wondering why you keep writing them into this conversation, when you consider them so irrelevant. Do you think you can ever add anything, informational, or at least, interesting to this conversation?

(Report Comment)
Ellis Smith May 8, 2011 | 6:21 a.m.

Interesting, Frank, that you've included George Washington Carver in your list. Carver did in fact secure an excellent higher education (particularly for that time), but where did Carver need to go to college achieve that?

It definitely wasn't MU.

There were two Henry Wallaces, father and son. The father headed Iowa State College of Agriculture & Mechanic Arts when Carver was a grad student there, and it is said young Henry (Henry Agar Wallace, later U. S. Secretary of Agriculture and Vice President of the United States), a very young boy at the time, followed George Washington Carver around like a puppy dog.

Henry Agar Wallace and I graduated from the same high school - but obviously not in the same class. That high school campus (multiple buildings) no longer exists.

(Report Comment)
Jimmy Dick May 8, 2011 | 7:48 a.m.

Frank just has a chip on his shoulder because he thinks his lack of a college degree entitles him to being an expert on a subject he read a book about. The idea that books are written with an inherent bias in them from many different paoints of view is something he hasn't accepted yet. The point of learning is to examine subjects from multiple points of view in order to determine for yourself what really happened based on factual evidence. Or in the case of economics, what system works, a blend of this and that, etc. The fact that no one has criticized home schooling when talking about it on the high school level he has overlooked.
Notice how he attacks the pubic school system and says they've been taken over by unions? Or that they've been taken over by progressives? Frank is locked into a cycle of aggressive conservatism which only has anger at perceived problems while having no solutions.
Yesterday Columbia College graduated over 500 students. Here's a excerpt from the Columbia Missourian article about that commencement and a few words from the guest speaker.
Susan Wilson Solovic served as commencement speaker for both ceremonies. Solovic, a 1980 Columbia College graduate, has authored books about women in business, including "The Girls' Guide to Power and Success," and is also a business contributor for ABC and MSNBC.

Solovic told the graduates that "the only thing constant in this world is change."

"People who have been historically resistant to change have not led successful lives," Solovic said. She expressed to the graduates the importance of being constant learners and to keep up with the changing world.

In Frank's and the other Rush Limbaugh conservatism models, you attack what you don't agree with whether you know anything about it or not. He's just jumping on the bandwagon of conservative angst which hates the fact that change is occuring whether they want it or not. Instead of working with change in order to effect a better form of change he and other conservatives just want to roll back the clock in an erroneous attempt to return to a time period that they perceive to be better. The problem is that they overlook the negative parts of that period.

(Report Comment)
frank christian May 8, 2011 | 11:45 a.m.

J. Dick - I said I would stick with you in this, but, your off subject ramblings, make that difficult. We understand your belief in "change". You have "changed" this conversation from taxes and tax cuts to my education, rather, the lack of it in your aristocratic opinion. This happens often. When liberals run out of content in a conversation they nearly always turn to disparagement of their opponent.

Liberals also love to refer to "change" regarding their efforts to impose more and more control over their "subjects". Walter Mondale, Clinton and Obama, all used "change" to advertise the loss of freedoms and wealth, that their policies have foisted upon the American people. "Instead of working with change in order to effect a better form of change". I'm still trying to decipher that astute statement, but the change that is taking place in our country now, is the replacement of repressive Democrat control of our government to one which promotes, fiscal responsibility, over inflationary spending for votes, only needed regulation for safety and fairness, rather than job killing, economy stifling, laws that benefit only the favored few, environmentalists, unions, legal professionals etc. You won't accept this "change". Is it a lack of education?

(Report Comment)
Jimmy Dick May 8, 2011 | 2:55 p.m.

You amaze me Frank. Do you really believe everything you're forcefed by the far right?

(Report Comment)
Gregg Bush May 8, 2011 | 3:15 p.m.

"When liberals run out of content in a conversation they nearly always turn to disparagement of their opponent."

Recalling from 3 days ago -

"I question whether you would know a fact if you saw one."
Welcome back to the fold, comrade francis!

(Report Comment)
frank christian May 8, 2011 | 6:25 p.m.

Gregg B. Could you not also recall that the statement you so cherish was my first, before spending three days in the effort to present factual content, offsetting the erroneous propaganda spewed by Mr. Dick?

When dealing with one so brainwashed with his ideology, that he tells us, apparently with a "straight face", "Revising history is done because history is being explored and reinterpreted because new facts are presented which require events of the past to be looked at again.", are we not tempted to believe that, "I question whether you would know a fact if you saw one.", might not be an insult, but a statement of fact? Actually the Chinese communists enlisted revision of their history in 1966 to cloud the mistakes of Mao. It has been used at least since WW2, when our US history reflects events that are not in line with the progressive liberal agenda of the day. Case in point, "tax cuts do not create economic expansion or additional revenues for the Gov't".

(Report Comment)
frank christian May 8, 2011 | 6:28 p.m.

J. Dick - "Do you really believe everything you're forcefed by the far right?"

After I have proven it true, yes.

(Report Comment)
Jimmy Dick May 8, 2011 | 7:47 p.m.

You haven't proved anything true, Frank. That's the whole point.

(Report Comment)
frank christian May 8, 2011 | 7:49 p.m.

jd - Again, "I question whether you would know a fact if you saw one."

(Report Comment)
Jimmy Dick May 8, 2011 | 9:26 p.m.

Well Frank, when you provide a fact that has solid support other than your opinion I would consider it. Since you have not provided factual evidence to support your opinion I have no choice but to disregard your opinion.

(Report Comment)
frank christian May 9, 2011 | 8:44 a.m.

J. Dick - Your problem is, you are not searching for information or knowledge, you are trying to sell a product, progressive socialism. This is why, tho it fly's in the face of all logic, you and yours can state, "only economic growth can create more revenue for Gov't!", then try to ignore the reductions in taxes paid by the people that preceded the four instances under discussion. You reason, when you can find no reason, that a good answer is, "that tax cuts create growth, is a Myth!" and post that as a given. You will continue you line of crap, but, will just tell you again, It don't fly!

(Report Comment)
Jimmy Dick May 9, 2011 | 9:12 a.m.

Frank, it's been pointed out that your logic is a one trick pony. We've pointed out historical data that shows there's more than a tax cut involved as well as economic conditions that preclude the tax cuts being responsible for increased revenue. You have an opinion that is not based in fact. Your opinion is wrong. We can continue to argue this for years.

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frank christian May 9, 2011 | 10:01 a.m.

jd - "We've pointed out historical data that shows there's more than a tax cut involved as well as economic conditions that preclude the tax cuts being responsible for increased revenue".

You sir, have done nothing of the sort! Can't you at least be honest with yourself? Btw, who are the "we" you include in your fictitious presentations?

(Report Comment)
Jimmy Dick May 9, 2011 | 10:03 a.m.

Just out of curiousity Frank, do you think everyone who disagrees with your political views is a progressive or a socialist?

(Report Comment)
frank christian May 9, 2011 | 10:21 a.m.

jd - I'm conservative, my views represent what large majority of Americans want, a strong, prosperous America that can lead the world, as we did during much of last century. Who would trade that excellence for membership in a corrupt, dishonest, United Nations? Progressives and Socialists! You dig?

(Report Comment)
Jimmy Dick May 9, 2011 | 10:59 a.m.

The sheer lunacy of the last post of yours just needs to stand on its own showing your perception of reality.

(Report Comment)
frank christian May 9, 2011 | 11:57 a.m.

Jim D. Generally speaking, one, when writing of "sheer lunacy" would feel compelled, I think, to elaborate, a little, on the reasoning behind the "label". Not you, of course, as one who likes his views to be accepted without any reasoning.

I will accept as a remedy, here and stand corrected on my "perception of reality", the name, you state, of one progressive, that would prefer that the United States leave the UN.

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