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Dave, Dave, Dave. It'll be over soon, brother.

Ronan, that's what I'm worried about.

Let's be fair Dave... the other guy has a plan to redistribute our money too, just to other beneficiaries. I think it's worth remembering that in our political system, you vote for a party as much as for a candidate, and both dominant parties have shown a similar tendency to spend liberally.

Dave,

Com'on. You're a more intelligent person than those folks at The Corner. See through their BS dude. Obama wasn't talking about redistributing wealth in that interview. Please read it carefully.

Dude, you can find this stuff, but can you find something that isn't so radically edited that I can't tell what context he's saying that in? The idiot who put that together has the equalizer showing as the video part and it pauses so many times I'm getting whiplash

With all due respect to Dave, I will be glad when the election is over, Obama is in the White House, and DMI is no longer MCain/Palin2008.com. Does Dave really believe that "wealth redistribution" has not been going on for the last 8 years? (Oh, who am I kidding? Its been going on for a lot longer than that!) I am astounded that we are still waging the progressive income tax battle here. I thought that was water long under the bridge.

I too look forward to the time that we can all stop talking about topics that make us sound foolish (i.e., politics) and start talking again about topics that make us sound smart, fun and interesting (i.e., almost anything else).

Just out of curiosity, If McCain's plan to buy up bad mortgages with tax dollars were implemented, would that qualify as "redistribution of wealth"? And, would Joe the Plumber approve?

Why would it make sense for a person who thought this way to move to France, where taxes are higher than anything contemplated by the Obama campaign?

I can imagine a fate worse than having to move to France. 35 hour workweek here I come!

Frankly, I wouldn't mind moving to France. They make such good food over there. And those villas in the countryside sure are gorgeous. :)

The best part is that the right is finally acknowlegding that their economic views are not driven by economic reality or theory but by a plumber's assistant who listens to Rush Limbaugh. No wonder so many intellectuals on the right are bailing on the GOP.

I just received a short email from a member of Sen. Obama's fan club: "I will vote for Obama and I do hope your type of Christianity will end. You and James Dobson are Satan and preach hate."

As if it's an act of charity to accuse someone who votes differently of preaching hate or of being in league with Satan.

Would any LDS commenter so quick to defend Obama's strange brew of populism and wealth redistribution (I'm intentionally avoiding the loaded term "socialism") like to speculate on what your fellow Obamacrats think of you and your religion? Any reason you are so happy to cling to those who loathe you? That charge is often lobbed at Mormon conservatives who collaborate with Evangelicals, but I think it applies with more force to Mormon liberals.

"your fellow Obamacrats"

You are talking about one person.

The comment is not relevat to Obama, who I am voting for.

Dave, just have a good cry and get over it.

You seemed to think one voice was relevant when it was one McCain supporter at a rally yelling, "Tell him!".

I agree with the others that taxes by nature redistribute wealth, it's just a matter of degree and what groups benefit on the margins when changes are made. But allowing the Bush tax cuts to lapse for the top income tiers is hardly socialism, it's simply higher taxes. Socialism is where the government owns the means of production and distribution of goods and/or services, and I don't see Obama fundamentally moving the country in a more socialist direction. We're simply talking about the marginal tax rate in the top brackets going from around 35% to 39% as far as I understand.

We're never going back to the days of marginal tax rates in the top brackets going back to levels well above 50% like we saw in the post WWII era up until Reagan.

By most measures the economic disparity in this country is as bad as it's ever been, and I'm okay with a little bit of a squish down, even though I anticipate being near that top bracket someday.

I have to say Dave that when you're blogging about all things Mormon you generally come across as a very reasonable guy, but something about politics seems to unhinge you. I mean come on, "if you don't like it move to France???" That sounds more like something Rush Limbaugh would say.

I imagine the current American economic meltdown has many Americans wanting to seek greener pastures. But to think you can just up and move to some solvent country like France and have the right to live and work there? Unfortunately, it's not so simple.

I am obviously too dense to understand this discussion. I have long had the impression that the main purpose for taxation was to fund collective projects that were beyond the scope of any individual or limited institution. Now I hear that taxes are to "redistribute" wealth. What has changed, and when did the change take place?

You mean I am not the only who receives hate emails.

mike d., I assume you've been around long enough to realize I am not actually suggesting anyone move to France. And I will admit that their nationalized railway system (SNCF) does much better than our nationalized railway system (Amtrak).

Ownership of the means of production is not the only way for the government to effectively direct or control production or consumption in sectors of the economy. Heavy-handed taxation and/or regulation can often achieve the same desired objectives.

The higher marginal tax rates from the pre-Reagan years were also tempered by the availability of a variety of tax shelters. The lower rates that were put in place under Reagan were accompanied by the elimination of many of those tax breaks. Now rates are going back up without those sort of tax breaks being reintroduced. The net effect is more taxation and redistribution.

Dave,

How high were taxes during the Eisenhower administration? Just curious.

Dave: 1) I do not think anyone objects to the fact that James Dobson votes, and I do not think that is where the idea arises that he preaches hate. 2) Why, after the Republican primaries, do you think liberals should be more concerned than conservatives that their own party hates them?

Oh, and I will trade you my "LDS for Obama" pin for an "Evangelicals for Romney" pin. If you can find one.

Dan, look here. And here. And I'm sure you'll like this one here.

I'll vote for whoever is most likely to make Dick Cheney's White House records publicly available.

I don't really care what they do with your money or mine.

Dave,

Thanks. That's what I thought. Someone making over $200,000 in the 1950s was taxed quite high. Now, er...well, um, why has no one charged the Eisenhower administration for not being so socialist...it would seem that that rate was lowered in the late 60s by a highly democratic Congress and President Johnson. Huh...

Mayhap socialism isn't what y'all think it is...mayhap it ain't how you define it.

"You seemed to think one voice was relevant when it was one McCain supporter at a rally yelling, "Tell him!"."

Dave,

No I did not. I never made any blog comments on that topic.

I'm not sure that's what most observers would take away from the third graph, Dan. A fairer reading would be that high marginal rates were first applied under Democrat Woodrow Wilson, fell during the Roaring Twenties, then were jacked up again under Democrats Roosevelt and Truman. They fell slightly under Democrat Kennedy, but fell dramatically under Republican Reagan.

As for recent history, the highest marginal rate stayed low under Bush Senior, jumped under "I'll give the middle class a tax cut" Clinton, then fell under W.

This and the other graphs (and common sense) suggest that Obama's promised tax cuts, like Clinton's, are just campaign rhetoric. Vote for Obama because you are swept off your feet by the cheering crowds, but please don't vote for him because you think your tax rates will go down. Uh, that's assuming you have a job. Or want one.

Dave,

It doesn't matter what the rates were previously. The argument made is that Obama is a "socialist" for supposedly wanting to "spread the wealth." But just the cursory look at America's tax history shows that what Obama proposes is not even close to the tax levels we have seen in this country from either side of the aisle (except for under Reagan and Bush Jr). For most of the 20th century, Americans have employed a progressive tax---and oddly enough, during that period, our economy has somehow actually survived and done wonders. Huh, seems like taxing the rich doesn't really hurt the economy.

More importantly, it shows how unhinged Republican rhetoric has gotten, to where they have to hit so hard at this tax point that they simply look ridiculous and amateurish.

The sad fact is that Republicans have failed, and badly, at managing our nation and economy when it comes to fiscal policies. They claim they are for tax cuts for Americans, give back to Americans what the government takes. But they are not responsible governors! They don't REDUCE spending to account for the loss of revenue from taxes!

Let me put it this way, when Carter took office our national debt was at about $900 million dollars. Today it stands at over $10 trillion dollars. During that time, under Reagan, Bush Sr. and Bush Jr., the national debt increased by $7 trillion dollars. In other words, those Republicans who say they are for small governments---Reagan, Bush and Bush---increased the size and cost of the government by $7 trillion dollars OVER the alloted budget. That's just freaking amazing! In other words, the remaining $2 trillion was increased by Carter and Clinton---who are supposedly the tax and spend libruls---while $7 trillion was increased by Reagan, Bush and Bush---who are supposedly the small government guys. That is beyond irresponsible. That should be considered criminal, frankly. Because what that means is that we have to borrow from the Chinese or the Arabs in order to pay for our government services today. That means that our children and grandchildren are going to have to pay HIGHER TAXES so that they can cover our debt that we pass on to them.

And how has John McCain said he would act? Very much the same way as Bush. Keep those tax cuts for the wealthy. Keep revenue low. And not cut spending. He has plans to build 23 new nuclear power plants, but doesn't tell you that the cost of just one of those plants is in the billions of dollars to build and maintain!

Is Barack Obama's plans any better? No not really. He too has to promise all sorts of new spending and new tax cuts. That's how you win elections. Sadly our national debt will increase over the next five years by probably $1 trillion PER YEAR. That's because Obama will have to spend lots of money to get us out of the hell hole that Bush Jr. has put us in.

Has there ever been a president to leave the country in such shambles as Bush has? He came to power with a surplus, and leaves with $5 trillion added to our national debt! These last eight years, George W. Bush has spent $5 trillion dollars OVER THE BUDGET. And Obama will inherit much of that mess.

What I hope for is that Obama takes us into a direction of less adventurism, less interventionism, where we focus on our own problems above the problems others in the world are facing. I think he will. He talks about it. We've got major problems here at home. It is high time we fix them before we go around messing other countries.

Get off the soapbox, Dan. Of course marginal rates affect economic behavior. Ever had an econ class? Do you think people just throw darts to make their economic consumption, investment, and work/leisure choices? I'm thinking about a post titled "It's the incentives, stupid." The problem with high marginal tax rates is that it distorts incentives. Incentives, Dan. Incentives. Write that on your mirror with permanent ink and it will sink in after a few days. Economic growth and productivity is all about incentives.

As for Eisenhower, that's you and Ezra Taft Benson who are labelling him a commie. Interesting pairing. Dan, maybe you've gone so far left you're now far right. Personally, I like Ike. Presidents don't set tax rates by fiat, they have to work with Congress, and the political will to change rates (up or down) doesn't come easily. It's easier to raise rates in time of war than lower rates in time of peace (which was what Reagan managed).

Incentives? That's the key to a good economy? Interestingly the Chinese seem to be doing just fine in creating business in a socialist state. Incentives are just a part of the whole picture. And if you think that Americans are so fickle that they would curb their incentives just because their tax rates are a few percentage points higher, well, then you don't understand the American spirit. And if it is the case that it is I who am wrong, and wealthy Americans are indeed fickle and will let a slight increase in their tax rate affect their business, well, then they truly are weak.

As for my point about Eisenhower, I don't agree with Benson. Politically there is very little that I agree with Benson. I'm not an extremist like Benson, or anyone on the left. I am a moderate. I don't see Eisenhower as a socialist for having such high tax rate during his administration. I'm saying that it comes back to the IOIYAR once again. It's okay that Eisenhower could have such high taxes. There's no need to call him a socialist. But Obama dares to let Bush's tax cuts expire and he's a socialist commie! Seriously, you guys have lost your way.

Dan, you ain't no centrist anyway. That's pretty darn certain.

You're getting so disjointed it's hard to reply, Dan. The Chinese economy did nothing for two generations until Deng Xiaoping carved out some room for private enterprise. Incentives, Dan. I'm afraid it's not "the American spirit" or "the Chinese spirit" that moves people to make economic decisions. That's Obama talk. It would be funny if that wasn't the sort of "I'll unite the world" blather that will be guiding US policy in a few months.


"but please don't vote for him because you think your tax rates will go down. Uh, that's assuming you have a job. Or want one."

Whether my effective tax rate moves a couple of percentage points in one direction or another is very low on my list of voting priorities. If I'm concerned about unemployment in general, however, recent history tells me that Obama's policies are more likely to be successful:

from an Oct 2008 report:

"the economy has created just 3,061,000 private sector jobs since President Bush took office. By comparison, it created 2,600,000 jobs annually during the Clinton administration."

from here:

http://www.cepr.net/index.php/data-bytes/jobs-bytes/economy-loses-159,000-jobs-in-september-sharpest-drop-since-march-03/

Presidents rarely have the ability to change the course of the economy on a dime. Generally speaking, we shouldn't want them do, because the dislocation required to do so causes enormous pain. The normal state of affairs is that the effect of legislative changes builds up over decades.

Many of the policies that contributed to the present crisis go all the way back to the Great Depression - encouraging home ownership at all costs, for example. Government subsidies of the mortgage market. Artifically low interest rates. The mortgage interest tax deduction. The pressure to reduce lending standards and downpayment requirements was pushed enthusiastically by both the Bush and Clinton administrations.

Other than some relatively minor tax changes, choice of court appointments, and a few foreign policy differences the policies of the Bush and Clinton administrations were remarkably similar. Bush is a moderate big government Republican. Clinton governed as a triangulating, moderate not-so-big government Democrat. The irony is that Clinton was reigned in by a Republican congress during most of his two terms, where Bush ran domestic policy on auto-pilot, implicitly encouraging his party's worst instincts.

If one really wanted to turn the economy around, the President would have to encourage the Federal Reserve to quit trying to print our way out of recessions and adopt some serious monetary discipline. President Reagan was the last president to do that, and it caused a two year recession before the medicine (including lower tax rates) took hold. That policy change tamed inflation for nearly twenty years.

The idea that minor tweaks to the tax code will have a major impact on the economy is naive. Major changes on the other hand... The power to tax is the power to destroy, and if the Democrats aren't careful they will make the present problems worse. Clinton was a free-trader. Obama's instincts are the opposite - more like those of Herbert Hoover and our former apostle Reed Smoot, of Smoot-Hawley fame.

Protectionism plus major tax increases plus lots more government spending plus easy money won't likely lead to a repeat of the Depression, but it will likely lead to a repeat of the 1970s - high inflation, high interest rates, a declining currency, a stagnant stock market, and so on. Perhaps Obama is wise enough to avoid becoming the next Jimmy Carter (if elected), but I have my doubts.

Mark, the point I'm trying to argue is this: that the idea that minor tweaks to the tax code have no impact is naive. Changing incentives changes behavior, and raising tax rates is a disincentive (at the margin) to productive activity. A tweak here, a tweak there, and you have a major change. I do think the comparison of Carter to Obama is instructive.

Dave,

The Chinese economy did nothing for two generations until Deng Xiaoping carved out some room for private enterprise.

I know. "Some room." But tell me, how much control and oversight does the Chinese government still keep on business? How much do they tax businesses there? And yet, China is doing okay, booming in fact. I'm not comparing the Chinese business model to the American. My point is that it is simply ridiculous to call Obama a socialist when 1) he isn't one, and 2) it wouldn't even matter because businesses do just fine in socialism today.

I'm afraid it's not "the American spirit" or "the Chinese spirit" that moves people to make economic decisions.

You misunderstand. What I'm saying is that American businessmen (as far as I understand them---and I may be wrong, that they truly are this fickle), will still produce good business no matter the tax policy! They did just fine in the 1950s when the super wealthy were taxed at 90%. That didn't seem to stop them from creating new businesses and investing in new ideas. You guys seem to think that business is some delicate flower that must be handled gently. Please.

Mark,

Obama's instincts are the opposite - more like those of Herbert Hoover and our former apostle Reed Smoot, of Smoot-Hawley fame.

Really? Where do you get this from? I've personally never once heard Barack Obama state any desire to have our country be insulary, but rather be engaged in the world about us.

Dan,

You mean "engaged" like promising to unilaterally renegotiate NAFTA? Or refusing to enter into a trade agreement with Colombia? Or invading Pakistan?

Dave,

I agree that changes to the tax code have an economic impact. My point is that minor changes are not enough to have a major impact on the economy. That said, what Obama is proposing to do with high income marginal tax rates definitely qualifies as a major change, in economic terms for the negative.

I don't think higher marginal tax rates would be so bad if our corporate tax rates were *much* lower, but as it is the resulting double taxation is a major disincentive to economic activity. If an investment yields one dollar, we should take away 70% of it?

Mark, we're on the same frequency.

Dan ... I'm not sure we're on the same planet. ;-)

I think one of the biggest worries of an Obama presidency is his protectionist rhetoric. One can but hope that, as one of his economic advisors admitted in a gaffe in Canada, that this is just political posturing and he doesn't really mean it. However let's be honest. Neither McCain nor Obama are free traders and as bad as Obama is at least he has some economic sense unlike McCain.

You know someone is making a bad argument when Dan comes by to attack it.

Don't know if this was said already (I don't have time to read all the comments in detail), but my biggest worry with an Obama presidency is that he is campaigning in the center, but will drift to the left as he governs in order to please the base that poured so much money into his campaign. He WILL have to please his base. Mark my words.

Typically Presidents please elements of their base by throwing them the occasional bone. This was true of Clinton and also Bush. While we may not like the base they have to appease (say the Evangelical wing of the Republican party who hates evolution, sex ed, stem cell research and abortion) it's hard to say Bush did too much to really support them. Ditto with say Clinton and the far left.

That's not to say they don't have their own views which may overlap with such groups at times. But it's pretty rare that these more radical members of the base get as much as they want. For a variety of reasons not the least of which being the other constituents the President has to appease as well as the deals politicians need make to get things implemented. Politics is by its nature the art of compromise and deal making. That's become a dirty word at times but it's really the heart of what makes democratic government possible. We don't want elected tyrants who get most of what the desire.

That said the real worry in this election isn't Obama but what happens if Democrats pick up too many seats in the House or Senate. Then they won't have to compromise much and will pass all manner of silly bills.

Throwing a bone is for people you marginally agree with. Obama wants the same things as his party's left wing and worse. No protection for abortion survivors for example.

On the other hand, if McCain gets elected, he can veto most of the silly bills a super-majority Democrat senate might pass.

"No protection for abortion survivors"

What IS that?

Dave said:

mike d., I assume you've been around long enough to realize I am not actually suggesting anyone move to France. And I will admit that their nationalized railway system (SNCF) does much better than our nationalized railway system (Amtrak).

I know, that's why I called you on it.

Mark D. said:

If one really wanted to turn the economy around, the President would have to encourage the Federal Reserve to quit trying to print our way out of recessions and adopt some serious monetary discipline. President Reagan was the last president to do that, and it caused a two year recession before the medicine (including lower tax rates) took hold. That policy change tamed inflation for nearly twenty years.

That helped, but I think our low inflation over that period was more due to cheap oil and the migration of production of much of our consumables to cheap Asian factories.

ssb said:

Don't know if this was said already (I don't have time to read all the comments in detail), but my biggest worry with an Obama presidency is that he is campaigning in the center, but will drift to the left as he governs in order to please the base that poured so much money into his campaign. He WILL have to please his base. Mark my words.

He'll govern largely as a moderate because that's how Democrats get re-elected. At least in the latter part of his first term.

Dave said:

The higher marginal tax rates from the pre-Reagan years were also tempered by the availability of a variety of tax shelters. The lower rates that were put in place under Reagan were accompanied by the elimination of many of those tax breaks. Now rates are going back up without those sort of tax breaks being reintroduced. The net effect is more taxation and redistribution.

So then, what's the appropriate marginal rate for the top bracket?

I like the Reagan two-tier package of 15 and 28 percent.

I read an online article recently that stated that the overall federal tax burden has remained stteady at about 19.5 percent of GNP for the last several decades, despite apparent variations in tax rates and policy. If that's the case, what you want is rates low enough to give proper incentives, so that 19.5 percent gets applied to a larger base of economic activity. Raise rates, and you'll get 19.5 percent of a smaller pie (smaller relative to what it would have been but for the higher rates).

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