Posted on 11/21/2008 10:34:30 AM PST by nickcarraway
THE country is now in the midst of the deepest economic crisis since the Great Depression. But as a new administration prepares to enter the White House, the crisis could end up being a potent ally for change. Without it, political resistance to the steps needed to address our most acute and longstanding economic problems would be almost insurmountable.
Despite broad agreement that the nation needs to increase spending in many domains — including infrastructure, health care, scientific research and clean energy development — no one has forged a legislative coalition capable of raising the necessary tax revenue. But with the country sliding into what promises to be a sharp and protracted economic downturn, it is imperative to increase spending over the short run, regardless of how we pay for it.
Even stalwart conservatives concede the point. For example, Martin Feldstein, the Harvard economist who was an adviser to the campaign of Senator John McCain, recently wrote in The Washington Post, “The only way to prevent a deepening recession will be a temporary program of increased government spending.” Mr. Feldstein suggested that government might need to offset a shortfall of some $300 billion in household spending.
In the long run, though, it will be necessary to raise enough tax revenue to balance the budget. One of the most effective ways to do that is by changing what we tax. Most federal revenue now comes from the income tax. Because a family’s annual income equals the amount it spends each year plus the amount it saves, we are effectively taxing savings. And savings rates have fallen precipitously, often dipping into negative territory as families have used home equity loans and credit card debt to spend more than they earned. Because the country needs to save more, taxing savings makes no sense.
(Excerpt) Read more at nytimes.com ...
Have everyone in government take a 30% pay cut to show they are serious about this country......no pay backs. Congressmen and women are over paid anyway. No more raises until the budget is cut and balanced.
A consumption tax is indeed what would turn the economy around — but ONLY if it is coupled with an elimination of income taxes and all taxes upon savings/investment.
A consumption tax (e.g. national sales tax) that is added ON TOP of these taxes would only serve to deepen the current economic slide.
No, we need a newsprint tax.
Where’s Man50?
I don’t think our esteemed Congresscritters get the concept of how you can’t get blood from a turnip. We are drowning in taxes now-—the more they take from us, the less we have to spend as consumers.
I remember how well the “luxury” tax went.
Liberals are either totally ignorant of history and economics or they’re hell bent on destroying free markets so they can impose socialism, there is no third choice.
Add a dedicated federal excise tax to every single newspaper, magazine, and journal to fund infrastructure.
That be ok with you, NYT? Do it for the chil’runs.
Actually, adding .20 to every piece of paper garbage written should help in more ways than one.
The only thing Obama will have to do (never from a socialist) is CUT TAXES ON INDIVIDUALS AND CORPORATIONS. Run an all-out attack of GOVERNMENT WASTE. Clean up CRITICAL AND NECESSARY programs like SS and Medicare.
The socialist would have more money than he could count, but then he would look like a conservative — cutting taxes and government wasteful spending — then his “socialist give-away messiah” image would dwindle but he could go down in history (we hope quickly) as a half-way decent president. The socialist congress will not let that happen either.
No, forget about doing what is right for America (capitalist America) — it will be all about installing the United Socialist States of America with a radical RULER at the top controlling everything ala Hugo Chavez.
wth ping?
ONLY if it is coupled with an elimination of income taxes and all taxes upon
So your reasonable suggestion is likely to remain a reasonable suggestion.
A consumption tax is essentially a luxury tax by another name. In effect it makes every taxable item a luxury by want of its additional expense.
Tax your way to prosperity!
Brilliance from the NY Slimes.
uless a little old thing like competition forces down prices when the producers’ tax bills are eliminated so that those costs are no longer passed on to the customer...
There. I fixed it for you.
In our brave new world isn’t everything a “luxury”? Arnold is on board for taxing pets.
The only way a producer will pay no tax is if the product is given away. So regardless of "price" there will always be a tax paid and that tax passed on. Even if competition drives the cost down, a consumption tax will be on top of "other" taxes already in place making the product a luxury compared to non-consumption tax items.
Let's say gasoline becomes a comsumption taxable commodity (likely, I'd say). It's effect would be to lessen consumption. Even if gas prices fall, we're still paying a premium for the pleasure of driving our automobiles. I say it's likely a fair number of drivers would still conserve rather than pay for the "luxury" of driving.
I was just reading that. If Kalifornia leads the way, I'm sure my state of Illinois won't be far behind. I suspect the only pet Blagojevich cares about is the rock he slid out from under...
Income Tax + Consumption Tax = Underground economy and black market.
That is as far as I got.
ALL I NEEDED TO KNOW ABOUT FELDSTEIN, (OR ANYONE ELSE WHO WAS INVOLVED IN "ADVISING" THE RINO) I LEARNED FROM MCLAME DURING THE CAMPAIGN--ESPECIALLY HIS SUSPENDING HIS CAMPAIGN, FLYING TO DC, THEN, (THE F'N IDIOT) NOT ONLY SUPPORTING THE BAILOUT, BUT LEADING THE CHARGE AMONG OTHER R SENATORS. THAT WAS THE KISS OF DEATH!!!
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