Wednesday, April 18, 2012

Got to Get You into My Life

Looking at any poll, you will conclude that Economic Growth, Jobs, Government Debt are at the very top of the list of issues people care about in this election cycle, and I agree these are the top issues facing our nation as a whole.  So I made my Top 5 lists of policy initiatives already proposed that I believe have enormous impact on the top issues:

Top 5 Favorite Policies: 

1) Move corporate income tax to 25%
2) Increase Soc Security and Medicare eligibility age to 70
3) Block grant Medicaid back to the states
4) Make Cap Gains / Dividend Taxes permanent at 15%
5) Tax Credit/Infrastructure Investment converting commercial trucks to Natural Gas

Top 5 Worst Policies:

1) Tax Increases - $500B in tax increases are coming in 2013 by letting Bush and other tax cuts expire
2) The Buffet Rule -  $5B collected per year vs a $1T deficit. Waste of time
3) Obama-care - Increases deficit, reduce small business hiring 
4) Dodd - Frank Financial Reform - Reduces lending by banks limiting economic growth
5) Government Renewable Energy Investment - Adds to national debt, little Return on Investment
Next 5 Favorite Policies:

1) Cut and Cap Spending to 20% of GDP
2) Reduce tax rate by 20% on all individuals
3) Reduce Unemployment Benefits to 13 weeks
4) Move from wage to price indexing for Social Security
5) Move to premium support model for Medicare

If the top 5 were the only things done by the next President, he would he revered in the history books for turning around our epic economic decline.  If the Top 5 and Next 5 could be accomplished, our grandchildren will be living in a society that would be the envy of every civilization in history. I would love to hear your thoughts on what you think are our nation's most important issues and solutions.  You should at least think about these things when picking your horses this fall.


Brian Scott said...

Hi Andy,
So let’s pretend that you and I are the congress and we are drafting this bill. Let’s start with your proposal and go from there.
Andy’s Top 5 Favorites, counter proposal.
1) Okay, capped at 25% but no more tax breaks for oil companies.
2) Age increase to 68 (compromise from 65). Also, we have to make equal cuts in dollars to the military budget.
3) Okay, Medicaid is granted to the states if the state meets the “Making Health Care Affordable Act” or “Obamacare” as it’s is lovingly known (liberals are starting to call it Obamacare, BTW).
4) Okay, capital gains maxed at 15%, but the Buffet rule takes effect if you make over $1 million so taxed at 30%. And we let the Bush tax cuts expire for those making over $250,000.
5) Okay, also tax credits for investing in electric too.
Wow, I think we can make some progress with this. First, we acknowledge that “Trickle Down Economics” is a total [crack]pipe dream; instead we make cuts where it hurts the least and get the most privileged to pay their fair share – all while protecting the middle and lower class. Please don’t filibuster this Andy!

Andrew Blankenship said...

Brian, you are true to form. And I am glad you are open to some of the tough changes that need to be made to keep the country solvent.

So I will comment on your counters:
1) Oil companies by and large get the same tax beaks as any other manufacturer, they are not special. If you want to limit or eliminate specific loopholes across the board to cut, please list the precise ones you are concerned about and I will likely be on board.

2) I do NOT understand why we need to keep the retirement age so low. When Soc Sec was enacted the average life span was 65 and retirement age was 65(so it was 50/50 if you would even see a Soc Sec check). We are now living to be 78, but you want government to fund an extra 10 years. Why?

Also, please feel free to name the defense spending you want to cut, and I'll likely be on board. There seems to be room to make improvement here, but I have no feel for where we can cut.

3) I can't agree to this. We are going to find out what a horrible unfunded mandate this federal health care nightmare will be. Its great you like health care for all. But it is silly to think that it doesn't come at a large price, and that the government can effectively administer the plan. Your faith in government efficiency is mystifying to me.

4) Keeping capital gains low and stable is about encouraging investment. Buffet rule is a colossal waste of time. It is political, has no real benefit other than attacking rich people and opening the door to more unequal tax rules.

As far as raising tax rates on the rich, would you be for limiting deductions for the rich instead? Same effect, but the latter would keep the incentive for those to pursue the next dollar of income attracting more revenue.

5) Investment in CNG is a small, specifically targeted way to reduce our dependence on foreign oil and keep inflation in check. I only encourage the gov't getting involved because the foreign oil market is not a free market.

On the other hand, investing in renewable's has proven to be an extremely expensive endeavor with little to show for it. This is one of those I would be happy to discuss if we were running surpluses. We are not.

You keep pushing fair share and you lose me. You know good and well the wealthy pay the vast majority of the taxes in this country. You know also that the poor receive the vast majority of the benefits. You know that paying a fair share would require massive tax hikes on the poor and middle class, unless of course you define "fair" to mean no matter how much you contribute to the pie, you have a right to the same size piece as everyone else. Karl Marx would agree with you, however, I think that is the exact opposite of "fair"

Also, you say "Trickle Down" or supply side economics is a pipe dream. What about your Keynesian or Demand Side Economics do you particularly like? High Taxes? A great way to try and punish the rich, but it doesn't raise more revenue. Weak Dollar policy? You realize that inflationary policy slowly steals money from Americans and gives it to the government. i.e. you and the govt each have $100. Govt prints $900 more. You have 100 Govt has $1000. Its $1000 is now worth the same as its original $100 in buying power, your $100 is now worth $10. That is theft. Big government? Playing out all over Europe. And you think it is wildly successful. Ouch.

Darren said...

My 2011 household tax burden was 48% of earnings. How much more tax do I need to pay to get to my fair share? Is it fair that we live off of what my wife makes and I work to feed the government machine?l

Andrew Blankenship said...

Darren, I think the fair share argument will always be intentionally vague. Mainly, because we have 300 million people and thus 300 million different views of fairness. This gives me the opportunity to quote Milton Friedman:

"A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both."

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