March 04, 2003

Notes: More from Henry Aaron

More from Henry Aaron's February 26 testimony:

  • By its reckless insistence on tax cuts, which aggravate the fiscal shortfall, and its use of trust fund accumulations to pay for current government spending, the Administration?s program will reduce growth of national income by ever larger amounts?just under $500 billion in 2013. These tax cuts will add $130 billion annually to the governments interest payment burden in 2013.
  • The revenue sacrificed by the tax cuts that the Administration has proposed since coming to office is more than sufficient to eliminate the entire projected deficits of the Social Security system and Medicare Hospital Insurance, with enough left over to double federal aid to higher education and bio-medical research and to support a major initiative to improve life chances for America?s children.
Posted by DeLong at March 4, 2003 02:25 PM | TrackBack

Comments

Ok, I'll be the first to say it:

He knows home runs, but does he know economics?

Posted by: jimbo on March 4, 2003 06:57 PM

LOCK - BOX

Posted by: Al Gore on March 4, 2003 08:27 PM

Aaron does not march to the Bush beat of feed the base. The base was willing to fund a political campaign to the tune of over $1 million to get tax breaks of over a trillion. They will surely give $250 million to ensure that the final contract is sealed. The wealthy buy their tax cuts with campaign contributions. It is a great return on investment. The only problem is that it drains the economy to the point where the rich get tax breaks but don't get enough return on investment in the private sector. At this point, I have $3000 tax write offs on retirement investments for several years. The wealthy will eventually realize that big tax cuts are not as profitable as an expanding economy.

My question to right winger has always been:

Would you rather make $200,000 and pay 40% taxes or make $100,000 and pay 20% taxes? A rational person would choose the $120,000 over the $80,000 any day. The GOP faithful always fall for the lower tax rate.

Posted by: bakho on March 4, 2003 08:56 PM

"The tax code is not performing, and it's making a mess out of the budget," said Representative Jim Nussle of Iowa, chairman of the House Budget Committee." (NY Times)

Way for the Republican leadership to take responsibility. The tax code is making a mess of the budget. Of course, the people responsible for the tax code (and the economy) are without blame.

Posted by: Dan on March 4, 2003 10:15 PM

Aaron is such a pro. The second bullet is a gem, raising the possibility that tax cuts may be intentionally aimed at making the biggest and most popular New Deal programs insupportable, without making an outright accusation.

Posted by: K Harris on March 5, 2003 06:04 AM

"The wealthy buy their tax cuts with campaign contributions."

Well, good for them! It's a #@$% sight better than a poor person buying the extortion of money from others, with his or her vote!

It never fails to boggle my mind, when a person's mentality is that it's wrong for a wealthy person to try to KEEP his own money...but it's perfectly all right for someone who isn't wealthy to take that wealthy person's money by force! (So obviously my mind is constantly boggled, because that mentality seems to be held by a majority of Americans.)

Posted by: Mark Bahner on March 5, 2003 09:12 AM

The majority of Americans that boggle your mind have come to the realization that a country with a wide disparity between rich and poor becomes inefficient. The goals of the people become more and more separate. The country becomes weak and stagnant and ultimately fails.

As for your reference to force, that is wildly extremist rhetoric - There are far more examples in America of wealth being accumulated by force than of the wealthy losing their wealth by force. The wealthy hardly live under the threat of the gun.

Posted by: Dan on March 5, 2003 11:29 AM

To some extent, Dan, you are correct. Our President made his pile by the illegitimate use of force, as have many engaged in agribusiness, along with many other examples. It is difficult to understand, however, why it is so difficult to simply admit that the purpose of the state is force people, through violence, or the threat thereof, to do, or refrain from, that which they would otherwise would or would not do, absent that violence. Once this rather strange reluctance to admit the patently obvious is overcome, then the essential moral question can be addressed, which is "When is violence justified?".

Mr. Bahner simply posits that it is more morally legitimate to lobby the primary instrument of force in society, the state, to be allowed to keep more of what one has gained via voluntary agreement (yes, dan, there are people who have earned fortunes by voluntary agreeement) than it is to lobby the state for access to power, with which to forcibly obtain that which one could not by voluntary agreement. This is particularly so when one covets something for purely personal benefit, as was the case with our President and his baseball team's stadium, or countless retirees who have the means to support themselves without forcibly accessing the wages of others, many of whom are less well off. No, "inefficiency", like "fairness", is insufficient to the task of legitimating the act of forcing other to submit to one's will, even if one happens to be in the majority.

The only morally legitimate use of violence or force is to prevent still greater instances of violence, particularly violence in it's most pernicious forms, anarchy or tyranny. A society in which people who are unable to provide for themselves are faced with physical destruction is one in which tyranny or anarchy could threaten, given sufficient economic crisis, so some measure of forced property transfers can be justified to prevent those greater levels of violence. However, that has nothing to do with taxpayers subsidizing the $25 million salaries of shortstops, or forcibly funneling the wages of citizens to the stockholders of Archer Daniels Midland, or to people who have the wherewithal to purchase their own medical services.

Posted by: Will Allen on March 5, 2003 01:03 PM

So basically taxes are not volutary, but other means of wealth tranfer via political means are voluntary. The basic thesis behind "its your money" is becoming clearer every day...

Posted by: Stan on March 5, 2003 02:34 PM

Stan, if citizen A sucessfully lobbies the state to allow him to keep more of the property he obtained via voluntary agreement, then A has not had any property transferred to him from citizen B, via political means. If B thinks that, as a result of A's reduction in taxes, he is paying more of the state's cost's than he should, he is free to advocate a reduction for himself, the repeal of A's reduction, or, God forbid, a reduction in spending. I happen to think some mild progressivity in taxtion is wise, and fully advocate repealing regressive income taxes, like FICA. If consumption taxes are determined to be the manner in which it is best for the state to raise revenues, I would favor an exemption of some base level of consumption.

What is wholly morally illegitimate, however, is for B to advocate the taxation of A, so as to allow B to enjoy, via force, that property which A gained by voluntary means, if B is not providing a service or product to the state which is critical for a functioning society, and B is able to provide for himself. This activity encompasses a large protion of the activity of national government today (certainly more than enough to cover any current or proposed budget shortfall) and it is wholly illegitimate.

Posted by: Will Allen on March 5, 2003 03:13 PM

Somehow, I knew you would show up.

As I said last time. Yes, the ultimate power of government is force but your moaning about the use of force in terms of tax rates is dangerous rhetoric. By going to that extreme you encourage extremism against yourself.

To expand, philosophically speaking what you say about force is correct. But politically speaking it is a load of crap. I got a speeding ticket the other day. Philosophically the government imposed force on me. Politically speaking, I have to pay a fine for a minor violation.

We agree on cutting corporate welfare and means testing medicare (and social security?). What we essentially disagree on are income tax rates. Not whether or not people can be taxed, but the rates of taxation. It is a peaceful, political debate. For your own good, you should try to keep it that way.

Posted by: Dan on March 5, 2003 09:33 PM

Lemme get this straight. I renounce all forms of physical coercion, except in those instances where the failure to coerce would threaten society with tyranny or anarchy, while you warn me to watch my language, "for my own good", and I am the one dabbling in extremist language? Please explain how advocating leaving people alone, except when the failure to do so would result in anarchy or tyranny, somehow encourages extremism against me? Is it not more reasonable to conclude that a person who mostly advocates non-interference in other's lives should in turn not be interfered with?

As to tax rates, I have no particular belief as to what the rates should be, except I do favor exempting the poor from taxation. My point regarding those that are displeased with the reduction in rates, and advocate their increase, is that once the state is no longer engaging in the illegitimate transfer of property to entities which can provide for themselves, only then will it become morally problematic for other entities to lobby to have their rates reduced. The larger burden lies on those who use taxation to enrich themselves, so those who rail against tax reductions, while expending far less energy, or remaining largely silent, regarding the illegitimate purposes that tax revenues are expended on, are enabling the far more morally problematic behavior. Only when tax revenues are no longer being widely used as a means of personal enrichment will it become potentially morally problematic for entities to lobby for further tax reductions. Of course, some entities engage in both activities, which really is morally inexcusable.

Posted by: Will Allen on March 6, 2003 10:15 AM

If I were King then the wasteful spending you bring up would be on the table. Unfortunately, only bad tax policy is on the table - so I fight it, for now.

"Please explain how advocating leaving people alone, except when the failure to do so would result in anarchy or tyranny, somehow encourages extremism against me?"

Because your argument was reliant upon the physical victimization of the wealthy, which is really an extreme view of the situation. That could bring out extremists from the other side who might say something like, "Stop moaning or I'll give you something to moan about". I, of course, would never say that.

Posted by: Dan on March 6, 2003 12:38 PM

So one should refrain from plainly describing a current state of public policy, lest the thuggish component of the polity becomes even more thuggish. Well, golly gee, such a position has never been described in such a extortionist manner to me before. It is an interesting theory that holds that the advocacy of leaving people alone encourages yet more illegitimate force to be applied, but you could be depressingly correct. If you don't mind, however, I'll refrain from wathching what I say, and keep on call'in 'em like I see 'em. Feel free to pass on more threats, however; it keeps one mindful of exactly what kind of people are out there.

Posted by: Will Allen on March 6, 2003 01:56 PM

"So one should refrain from plainly describing a current state of public policy"

Except that is exactly what you were NOT doing.

Posted by: Dan on March 6, 2003 02:33 PM

Well, Dan, since you have already conceded that my characterization was accurate, with the pointless modifier of "philosophically", I must concede that I don't know what you are referring to.

Posted by: Will Allen on March 6, 2003 03:30 PM

Philosophical arguments are not generally considered a plain description outside of academia.

Posted by: Dan on March 6, 2003 08:46 PM
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