RAHN: Vote higher taxes now, regret it later (GOP should think before erring)

Washington Times ^ | December 3, 2012 | Richard Rahn

[1rudeboy]

If you are a member of Congress and you wish to be re-elected, do you increase your chances of winning by voting for or against raising taxes on the “rich”? In decision theory, “regret” is defined as the difference between the actual payoff and the payoff that would have been obtained if a different course of action had been taken. In the upcoming votes on the “fiscal cliff,” members of Congress will be making decisions about what is best for the economy and the nation and what is best if their highest goal is re-election.

For a member of Congress to make the decision, it is helpful to know some economic history and theory. Democrats keep saying they want to go back to the tax rates of the Clinton administration (maximum marginal personal income tax rate of 39.6 percent), during which time there was high growth (4.4 percent in 1998), but federal government spending was just 19.1 percent of gross domestic product (GDP), as contrasted with 24.6 percent at the moment. Looking at U.S. economic history, there is no evidence that the economy can produce high growth and low unemployment with Clinton-era tax rates and current levels of spending and regulatory impediments. Neither the president nor other leading Democrats are talking about rolling back spending and regulatory burdens to Clinton-era levels. Forget all of the talk about a trillion here in more tax revenue or a trillion there in spending “cuts.” What is relevant is both the size and type of spending as a percentage of GDP, and tax rates on labor, saving and investment.

Higher marginal tax rates on labor, capital and regulations that do not meet a solid cost-benefit test slow economic growth.

[1rudeboy]

Interesting image of a decision-matrix at the site. Game theory would indicate that the “best” thing is for both sides to do nothing. I don’t think it will play-out that way.

[Tublecane]

Does that matrix account for the fact that Pubs will be blamed no matter what happens?

[Truth2012]

This is why these people love the morning after pill... they just refuse to be responsible.

Bunch of addicted crack heads.

[Arm_Bears]

Boner has already indicated that taxes on “the evil rich” will go up (I thought discrimination was against the law). In this, he has demonstrated that there’s not a dime’s worth of difference between Democrats and Republicans, other than Republicans will kill you more slowly.

A pox on all of them.

[sickoflibs]

This session will end with the House extending the middle class tax cuts by themselves and little else, and they have no real choice in that.

[RugerMini14]

I’ve never been a fan of a 3rd party. Until now.

The Republicans were given their majority in 2010 with the mandate to limit the federal government. By becoming the co-executors of the redistribuitionalist state, they have forfeited that mandate. And the support of conservatives.

It’s time for a 3rd party.

[Goreknowshowtocheat]

Reluctantly, I agree. There has to be a place for conservatives preferably not re-education camps.

[Graewoulf]

Obama’s Spending Cliff File.

[refermech]

Third party will work well at the state level but it will guaranty democrat presidents from now on because of the overpowering advantage the dems have in the electoral college. The Tea party legislators can then team up with willing republicans and dominate the legislative process in Washinton. We can beat them, but we have to do it at the state level. Of course I could be wrong!

[Luircin]

I’ve hated that idea for years, because it would do little but leave conservatives wandering in the wilderness for a generation until the new party got established.

But now, it looks like there’s not much choice in the matter, because we’ve been marginalized by both parties.

[RJL]

Vote higher taxes now, regret it later (GOP should think before erring)

Becoming the tax collector for the Democrats has been a poor choice for Republicans in the past "Read my lips, no new taxes". You'd think that the Republicans would have a clue, but no, they're the stupid Party.