Wednesday, October 17, 2012

Obama Romney Debate: Tie?

I think both sides showed up and did a great job.  The pundits are giving the win to Obama, but I think it was by a very small margin if this was the case.

What do you think?    Debate Link

43 comments:

Anonymous said...

Once again, Mitt ws unable to explain how cutting taxes for himself and his wealthy friends, tax cuts to be paid for by the rest of us made economic sense. A clear win for the president.

--Hiram

Anonymous said...

I had to turn it off. The lies, spin, talking points, bluster, wash, rinse, repeat of our Dissembler in Chief was too much too bear. But of course I don't lightly suffer fools. Anybody that stands up and says that "insurance companies will be required to pay for contraception" as if it were a positive is obviously out to lunch.

J. Ewing

John said...

Hiram,
I think he clearly and repeatedly said that all of us get cuts. And the wealthy lose more deductions than the middle class.

Now if he can deliver on that promise while eliminating the deficit is a different question.

J,
Of course I am the wrong one to talk to about making birth control more readily available being a bad thing. I would probably put free condom and birth control pill dispensers on street corners if it could help us eliminate the birth of unwanted children by irresponsible immature parents. However we have had that discussion before.

Anonymous said...

It's not disputed that the wealthy under Mitt's tax plan lose more in deductions than the rest of us. It isn't disputed, in fact, that on top of everything else, Romney's plan for deductions is regressive. But that wasn't my point. What was my point, and what doesn't seem to be seriously disputed is that under Romney's tax plan, the tax cuts he plans for himself and his wealthy friends will result in increased taxes for everyone else.

How does it make sense for you keep less of your money just so Mitt and his wealthy Boca Raton friends can keep more of theirs?

--Hiram

John said...

It seems Romney and Ryan are disputing your interpretation pretty strongly. And don't forget those 600 economists that support his plans.

Anonymous said...

Not really. They rather famously haven't run the numbers. And the arithmetic just isn't that complicated. And the famous barroom parable makes the point intuitively. Here is the conclusion: "The people who pay the highest taxes get the most benefit from a tax reduction."

And it doesn't really matter what form that tax deduction takes. Now it is possible to argue that this policy doesn't make sense, that if we are committed to a progressive tax policy, changes in tax policy should be progressive. But that isn't the policy or the approach we have today. The policy approach we do take is for tax increases are progressive and tax decreases are regressive. In this context, Gov. Romney doesn't seem to like that, it now seems to make him uncomfortable. but the truth of it isn't dependent on whether the governor likes it or not or on the comfort level he has with the consequences of the policy he advocates.

--Hiram

John said...

This link says the top 10% are paying 70+% of the bill. Tax Foundation Summary

If Romney can reduce everyone's tax rate and keep the top 10% paying the same amount by reducing their deductions, wouldn't that be a good thing for the middle class folks?

The low bar tab contributors get their beer for less, and the high bar tab contributor continues to bear most of the burden.

Of course this only works if the bar tender can grow faster while maintaining similar costs because of this change.

Anonymous said...

This link says the top 10% are paying 70+% of the bill.

Sure. That's why tax decreases, as the barroom economist points out favor the wealthy, and why tax decreases are regressive, for better or worse. And that's the problem Romney has with his tax plan. He can't make the numbers work in any other way except that an across the board tax cut will inevitably result in lower income tax payers paying more, not less in taxes.

The barroom economist, on this one thing, is very clear, "The people who pay the highest taxes get the most benefit from a tax reduction."

--Hiram

John said...

For new readers. Hiram is commenting on Bar Room Economics, not Barroom Economics. Here ia link to one of the many versions that are out there.
Bar Room Economics

Hiram,
I think you see the moral quite differently than most readers. It seems that you would be cheering on the folks that assaulted the guy paying the majority of the tab. And you would be standing with them wondering why the guy left and did not come back. Which isn't surprising since this seems consistent with your views regarding tax policy.

Food for Thought...
Retire Abroad Cheap
HP Retire Abroad

Anonymous said...

I think you see the moral quite differently than most readers.

I do, but I take my moral from the text. As the guy says, tax reductions benefit the rich more than the poor. And we see the real life version of that with the Romney tax plan, where the poor get to pay for the tax cuts of the rich. Whether that's good or bad policy, but that is the policy.

I have nothing at all against those who pay huge amounts of taxes like Mitt Romney. Why anyone would metaphorically assault him for that is something I do not understand. One of the characters in the piece is under the impression that there is something unfair going on. If you are looking for an explanation for that belief, you should go to the author of the piece, or his character, not me.

The reason rich people don't leave is that they got rich here. They benefited from our system of laws, and the all the other things our taxes paid for. It's true, that after making their money here, they go someplace else, but they aren't productive here. I spend a lot of time in Florida. Lots of rich folk around but that's where money goes, it isn't where money is made. And after all, rich people are fungible. When one leaves, someone else steps right up and takes their place. Bain Capital went for years without Mitt Romney, the CEO, not even showing up for work and by all accounts, no one even noticed.

--Hiram

Anonymous said...

The problem with a "progressive" tax system run by progressives is that they insist it be progressive in percentage terms, rather than in dollar terms. A perfect flat tax is the fairest tax because everybody pays exactly the same percentage of their income. It is ALSO perfectly progressive, because the richer you are, the more dollars you pay in taxes. The current system is not fair, because it is OVERLY progressive and so complicated that it cannot possibly be made fair.

Sure, those who pay more in taxes, at a higher percentage, save more dollars than those who pay less or nothing when rates are lowered, but that's the GOOD part of the plan. Not only that, did you ever try to get a job from a poor guy?

J. Ewing

John said...

Hiram,
Your comments continually imply that you think it would be unfair if the wealthier get bigger dollar savings via the tax cuts. This is exactly what the unhappy patrons were saying.

Why is he saving more than I am??? Sounds very familiar.

Unknown said...

just to clarify the "bill" to which you refer, John, is federal income taxes, which are about 25% of all taxes paid. The other federal state and local taxes are less progressive and in some cases are even regressive.

John said...

Thanks for the clarification. Here is a pie chart that breaks it down.
US Revenue Pie Chart
Wiki Ad Valorem

I would say that Federal and State income taxes are both progressive. That means that ~38% are Progressive.

Then there is that pesky 20% social insurance tax, which I argue isn't as much a tax as a mandatory savings and insurance plan. Since the cost and benefit are roughly matched. As we have discussed many times before.

The business and other sub-group taxes of 13% are covered by businesses. I assume consumers pay these, but often it is argued by some that this comes out of their excessive profits.

That leaves the Ad-valorem and fee and charges categories. (29%) These I would agree are regressive in nature since they are purchase and service related.

Anonymous said...

A perfect flat tax is the fairest tax because everybody pays exactly the same percentage of their income.

The problem with a perfect flat tax is that it simply doesn't raise nearly enough money. We tax people with money, not because it's fair, but because they have money. The fairness rationalizations can be made, but they are really after the fact. Historically, the leaders of societies that tried to tax people who didn't have money had a distressing tendency to end up with their heads on sticks.

Lots of people talk about fairness a lot. I think to some extent those notions are projected on to me, that somehow what I say implies a concern about fairness that I don't really have, or at least not in the usual sense in which people speak of it. "Life", as John Kennedy observed, "is unfair.", and far be it from me to try to rectify that unfairness in all of it's myriad of ramifications. What we can do is create policy that is effective, that contributes to economic growth, and maybe, just maybe doesn't make things unduly worse for those who unlike Mitt and perhaps in a much more modest way, me, folks who were born on third base and should be under no illusions that they got there by hitting a triple.

--Hiram

Anonymous said...

By the way, I misunderstood the nature of the perfect flat tax. I assumed a perfect flat tax, one under which each of us pay the same amount. That makes a certain amount of sense I suppose, assuming we all benefit in the same degree from government services, but as I say, that wouldn't raise the amount we need to pay for government.

The objections to the progressive tax baffle me. People seem to have no problem in accepting the rich should pay more in taxes, and that's pretty much all preogressivity stands for. The argument than shifts to how we go about how progressive our taxes should be. My own thought is that a system in which Mitt pays a lower percentage rate than you do, isn't particularly progressive. J. has a problem with percentage tax cuts but then accepts a percentage flat tax, one by the way, which would mean a huge tax increase on the wealthy, an increase far greater than anything I propose or would get accepted by Congress.

--Hiram

Anonymous said...

Why is he saving more than I am?

I am not sure who is saving more. High income earners often save surprisingly little, one reason why they often feel poor and somewhat put upon.

In the barroom economics example, one of the characters feels he has been treated unfairly. I am not sure why. His subjective feelings aren't explored by the author and seem beside the point the author himself draws from his metaphor. The author's conclusion let's recall, is that cuts in taxes benefit the rich more than the poor, an indisputable conclusion in that scenario, but that we should be ok with this since perhaps a more even handed distribution of tax cuts would cause the rich person altogether, a practical problem, not necessarily an issue of fairness.

It's not clear to me, why the author thinks this is a remarkable point. That in a tax system with progressive brackets, that flat rate tax cuts would be regressive, the point that the author seems to be amazed by, seems pretty obvious to me. Whether this is sound policy in terms of fairness or in any other terms anyone would care to mention, is a different question.

--Hiram

Anonymous said...

Let me put it differently. I don't see how anyone could reasonably conclude that if they are offered a free beer one night, but not the next night, that they have somehow been treated seriously. One of the beer drinkers in the bar seems to have concluded that, but the author offers not reason why that should be the case, and I can't come up with any either.

What about the real world scenario Mitt offers, that the wealthy should receive tax cuts paid for by tax increases on the poor. Is there a problem with that? If so, is it a problem of fairness? After all the wealthy might be more meritorious than the poor, more deserving of the better tax treatment. Does that address the fairness issue? And are there are issues in play when someone says you should keep less of your money so someone else can keep more of his?

==Hiram

Anonymous said...

The problem is with looking at the tax system as a means of creating a "fair" (by any definition, and the problem is there are thousands of them) redistribution of income. The purpose of taxation OUGHT to be to raise the revenue necessary to perform the necessary and desired functions of government (which again has too many definitions to state what that amount IS).

The simplest way to do that is with a tax on consumption-- a tariff as it is called in the Constitution-- and I have remarked before that I believe the FAIR tax is the right way to do that, with untold side benefits to the economy, for everybody. But if we want to get to "simple" and "efficient" from where we are, and to throw "fair" into the equation as well, then the only thing we need is a flat tax -- the same PERCENTAGE tax on everybody-- but that operates only on DISPOSABLE income. That is, you pay no tax on income below the poverty line income for your family size, and that fixed percentage for everything above that. This means the poor pay nothing. Those just above poverty pay almost nothing, just that fixed percentage of the few dollars of "disposable income" they have. The middle class will pay more, but the rich will pay almost the full flat percentage. In other words, it is "perfectly progressive" in that the rich pay more in dollars AND at a higher effective rate. All Congress has to do is to set that rate at something that is revenue neutral.

J. Ewing

Anonymous said...

"The problem is with looking at the tax system as a means of creating a "fair" (by any definition, and the problem is there are thousands of them) redistribution of income."

I agree. Taxes shouldn't be about fairness. For one thing, taxation is so complicated a concept that fairness really has no meaning, at least none we can agree on.

The fact is Mitt believes that I should keep less of my money so he can keep more of his, redistribute money from me to him. Does this raise an issue of fairness? Maybe Mitt's a better guy than I am and deserves my money more than I do. It's an arguable point perhaps, but one that I am not arguing here. For the moment, I am just thinking of this in terms of self interest. I need the money I have, and I just don't see what benefit I would receive by turning it over into Mitt, to be salted away maybe, somewhere in a Cayman Islands account.

--Hiram

Anonymous said...

The consumption tax is known as the FAIR tax. I have never really understood why a simplicity is a virtue in tax policy. In any event, there is nothing simple by about any tax. A FAIR tax would impose roughly a 25% tax on everything you buy. Food, clothing, stocks presumably. The immediate and obvious problem is that it would create a black market in untaxed consumer goods. Lots of folks would end up in jail, the modern equivalent of Prohibition. That said, I just don't know why we want to place the burden on consumption, especially in this economy which suffers from the fact that we just aren't buying enough.

For reasons I have talked about, the idea of imposing a percentage tax on everyone is difficult. Mitt's in a 35% tax bracket, but only pays 14% in taxes. Those who argue against progressivity in income rates, it seems, have already won the battle.

--Hiram

John said...

Hiram,
I'll never understand why you are obsessed with Romney's tax rate after I repeatedly provide sources that show him to be a unique case. Yet you continue to imply his situation is typical.

The man is technically retired and gives a huge amount charity. This is abnormal and I think giving huge amounts to charity should be encouraged and added to his tax rate. Yet you choose to ignore it.

Anonymous said...

"I'll never understand why you are obsessed with Romney's tax rate after I repeatedly provide sources that show him to be a unique case. Yet you continue to imply his situation is typical."

the problem is that your source is missing the critical link, and I suspect has an incorrect or at least irrelevant definition of income.

Mitt benefits from some specific tax breaks that are bad policy, in particular the carried interest treatment his income receives. But he also benefits to an extraordinary degree from appreciation of wealth that's independent of income, factors also overlooked in the article you cited.

Mitt does give money to charity, but he also gets a tax break for that as do most of us. And the overall fact remains is that Mitt advocates changes in the tax law which would cut taxes for himself and his wealthy friends which would have to be paid for by the rest of us. He wants us to keep less of us money so he can keep me more of his. Now the argument can be made that he is a better steward of our money than we are, that he gives it to charity, unlike me, for example, who would spend it on wine, women, and song, and then waste most of the rest of it. It's just not an argument I find particularly compelling.

--Hiram

Unknown said...

because I was curious I did a quick search and learned their are about 4000 people with a tax situation similar to Romney. On the other hand passing the Buffet rule would raise $47 billion in new revenue which seems better than additional $47 billion in spending cuts towards the goal of deficit reduction.

Buffett Rule or Not, Most Rich People Already Pay

Unknown said...

As Romney still hasn't been specific about his tax plan I did some research on that as well.

Romneytaxplan.com

John said...

Laurie,
Cute Romney Tax plan link

As for the Buffett rule? Do you want us "all to play by the same rules" or not? These seem to be Obama's favorite words, yet he seems to advocate totally different rules for the wealthy.

He seems to want to tax their investment income at much higher rates than our investment income, not allow them to deduct charitable giving, handle their estate taxes differently, etc. Therefore attempting to demotivate them to save, invest and give to charity. And certainly encourage them to move more of their wealth out of the country.

Maybe he should changes his mantra to let's ensure everyone pays a very progressive tax rate by creating very different rules for all. That would be more accurate.

Hiram,
"Mitt advocates changes in the tax law which would cut taxes for himself and his wealthy friends which would have to be paid for by the rest of us"

You can say it over and over and it does not become any more factual. Mitt clearly stated that he expects the wealthy to pay the same after he shifts things around.

Now if he can do that is a different story. But he is certainly advocating for that in the last 2 debates.

Anonymous said...

That may be what he has decided to expect but that just isn't the policy he wants to implement. Mitt's been very clear on this.

--Hiram

John said...

You must have been listening to a different debate.

"ROMNEY: Thank you very much. And let me tell you, you're absolutely right about part of that, which is I want to bring the rates down, I want to simplify the tax code, and I want to get middle- income taxpayers to have lower taxes.

And the reason I want middle-income taxpayers to have lower taxes is because middle-income taxpayers have been buried over the past four years. You've seen, as middle-income people in this country, incomes go down $4,300 a family, even as gasoline prices have gone up $2,000. Health insurance premiums, up $2,500. Food prices up. Utility prices up.

The middle-income families in America have been crushed over the last four years. So I want to get some relief to middle-income families. That's part -- that's part one.

Now, how about deductions? 'Cause I'm going to bring rates down across the board for everybody, but I'm going to limit deductions and exemptions and credits, particularly for people at the high end, because I am not going to have people at the high end pay less than they're paying now.

The top 5 percent of taxpayers will continue to pay 60 percent of the income tax the nation collects. So that'll stay the same.

Middle-income people are going to get a tax break.

And so, in terms of bringing down deductions, one way of doing that would be say everybody gets -- I'll pick a number -- $25,000 of deductions and credits, and you can decide which ones to use. Your home mortgage interest deduction, charity, child tax credit, and so forth, you can use those as part of filling that bucket, if you will, of deductions.

But your rate comes down and the burden also comes down on you for one more reason, and that is every middle-income taxpayer no longer will pay any tax on interest, dividends or capital gains. No tax on your savings. That makes life a lot easier. If you're getting interest from a bank, if you're getting a statement from a mutual fund or any other kind of investment you have, you don't have to worry about filing taxes on that, because there'll be no taxes for anybody making $200,000.00 per year and less, on your interest, dividends and capital gains. Why am I lowering taxes on the middle-class? Because under the last four years, they've been buried. And I want to help people in the middle-class."

Real Clear Politics Transript

Unknown said...

How it looks to me is that both Obama and Romney currently have proposed making tax rates on investment income progressive. So why not cap deductions and limit how much estate $ can be passed on tax free, too

Romney 3.0 has been making many progressive proposals for taxation as he tries to win this election.

I think what would happen if he were to win (btw I'm still not worried) is there would be tax cuts that are much more beneficial to the wealthy, relatively small spending cuts, and a huge increase in the deficit.

Lastly, all the rates that apply to middle class income or wealth also apply to the wealthy on their first $250,000 (or several million $ when considering the estate tax)

John said...

Ok. I'll bite.

Why do you think the government / society deserves to collect a portion of a family's wealth just because an elder member died? I must have missed seeing their name in the will..

I have been taught since I was a child that each generation of our family is expected to continue to grow our family's cumulative wealth and pass it on. This has been going on for at least 4 generations and 100+ yrs.

I am puzzled when and why people thought they should start stealing the belongings off a body just because they had died. Reminds me of the servants stealing and selling scrooge's belongings after his funeral.

Anonymous said...

Mitt wants various things. But he isn't proposing them. What he is proposing them. He is simply holding out goals, talking about expectations and other forms of wishful thinking which have no relevance to his plan to cut taxes across the board. He didn't "run the numbers". As the president pointed out, he is offering the American public a deal he would never have for a moment accepted as a CEO of Bain.

I can't tell you how many times I have heard Mitt's siren song of, "Oh I will cut rates but take away your treasured deductions, and trust me, you will do fine." No one ever buys it.

And by the way, I thought tax reform was supposed to simplify taxes. Mitt's talking about introducing a really complex system of caps and deductions mostly designed to negate the effect of the tax rate changes he proposes. Is this really an illusion of a plan, created at the very last moment with no other intention of getting Mitt out of a hole he carelessly dug for himself.

--Hiram

Anonymous said...

"Mitt ... would cut taxes for himself and his wealthy friends which would have to be paid for by the rest of us." -- hiram

Thanks for exposing the flaws in your /feelings/ about tax policy. First of all, the poor don't actually pay taxes but should pay a little-- call it a "participation fee." Second, whether taxes are raised or cut on the rich isn't going to make much difference to the deficit and debt unless a cut makes the economy grow and encourages the rich to make payment of more taxes at a lower rate, which is what usually happens. Third, tax cuts do NOT have to be "paid for" by ANYBODY if spending is curbed to go along with it, or if the cuts produce economic growth that increases revenue. This notion that government owns all income and then allows each of us to have some of it back is just wildly offensive.

J. Ewing

Anonymous said...

"Mitt's talking about introducing a really complex system of caps and deductions mostly designed to negate the effect of the tax rate changes he proposes."

The quote I saw about Romney's plan was a brilliant piece of simplification. File your taxes as you do now, but all of the "punish the rich" exclusions, etc. are replaced by a single cap on total deductions that allow most people to claim the full value. Beyond that, the richer you get the higher your effective tax rate, as the amount of deductions excluded from your income exceed the amount permitted. Of course, expect charities to be decimated by this plan. Most rich folks aren't like Mitt, who doesn't take the full deduction allowed for his charitable giving.

J. Ewing

Anonymous said...

tax cuts do NOT have to be "paid for" by ANYBODY if spending is curbed to go along with it, or if the cuts produce economic growth that increases revenue.

This cherished Republican belief is exactly why the deficit is so high, and it also explains why deficits only seem to be a problem when Republicans are in the White House. And it goes a long way towards explaining why the economy generally performs much better on Democrats than Republicans.

--Hiram

Unknown said...

John,

I didn't realize you are wealthy enough to be concerned about estate taxes. The reason I am in favor of the estate tax is It's Fair, and We Need the Revenue.

I'd also add a bit more about wealth distribution in the USA to this opinion piece. An estate tax makes our country slightly less plutocratic. Who rules America? Wealth income and Power

John said...

"Indeed, that's what the case for the estate tax boils down to: basic fairness. The tax affects a small number of people who inherit large amounts of wealth—and who can afford to give up a portion of their windfall to help finance their government."

I guess I disagree with the FAIR part. A family business operates for generations and has to give up a chunk of its assets everytime someone dies... Seem fair?

Anonymous said...

"This cherished Republican belief is exactly why the deficit is so high, and it also explains why deficits only seem to be a problem when Republicans are in the White House." -- hiram

Hiram, I'm sorry to see that your alternate universe is imploding, but perhaps a little fact-checking is in order here. Mr. Obama is a DEMOCRAT, and while he has been in the White House he has presided over more deficits that all Republican presidents COMBINED. In just four years. And his budget calls for a minimum of 10 years more of that, which will absolutely bankrupt the United States.

And what is it about reducing spending in response to reducing revenue (your viewpoint on tax cuts, not mine) that isn't simple math or simple common sense?

J. Ewing

Unknown said...

seem fair? yes

Impact of Estate Tax on Small Businesses and Farms Is Minimal. Almost No Small Business and Farm Estates Owe the Tax; Those That Do Owe Only Modest Amounts

Anonymous said...

If deficits were a problem, Republicans would not be calling for tax cuts. It's as simple as that.

--Hiram

John said...

Laurie,
If we shot only every 100,000th person in order to reduce global over population. Would that incredibly low execution rate make it FAIR?

I think you should stick with the argument that death taxes are an effective wealth transfer mechanism. Same as wealthy folks paying the majority of our country's expenses, it may not make much sense but it is effective. (ie they have money... other don't...)

Hiram,
I am not a fan of tax cuts because I find it hard to believe we can keep revenues equal or higher with them. However it is perfectly feasible that we can.

If it can get 20 million more people working and paying taxes, and raise the incomes of many more. It may just work.

It likely has as much chance as Obama's tax more and spend more plan. Since it is unlikely we will get the same kind of growth and employment with his plan of driving private jobs through gov't spending and wealth transfer.

So I don't it is as simple as you make it sound. The real question is will the Republicans actually reduce gov't spending... They have done poorly in the past.

Unknown said...

John,

I think you should reconsider which party's policies will lead to more job growth.

Over the past 50 years private sector job growth under dem presidents has been more than double the job growth rate under GOP presidents (150,000 /mo compared to 71,000/ mo.)

When it comes to public sector job growth they are about equal (so much for the GOP being the party of spending cuts)

Private Jobs Increase More With Democrats in White House

Lastly, we clearly have a very different understanding of the term fair when it comes to income and taxes.

Unknown said...

John,

One more unrelated thing, a TNR
article I read made me think of you.

As I understand your vote your wallet theory, people vote for dems to get more handouts. Then why are the highest povery states solid red and low poverty states solid blue. Seems to me by your theory it might be the opposite.

Blue States are from Scandinavia, Red States are from Guatemala
A theory of a divided nation.


I think blue states have a lot of dem voters voting for the common good rather than their own self interest.

John said...

I'll need to read the links later, they seem long and I am out working at the estate to maximize the gift we'll some day make to the less fortunate. I wonder what they are doing with their weekend?