The Cliff: Fake Poll, Real Quote

“Look, if you taxed every person in successful small business making over $250,000 at a hundred percent, it’d only run the government for 98 days. If everybody who paid income taxes last year, including successful small businesses, doubled their income taxes this year, we’d still have a $300 billion deficit.

You see, there aren’t enough rich people and small businesses to tax to pay for all their spending. And so the next time you hear them say, don’t worry about it, we’ll get a few wealthy people to pay their fair share, watch out, middle class. The tax bill is coming to you.”—Paul Ryan, VP debate ’12

Via the exquisite Patterico.

Tom Van Dyke

Tom Van Dyke, businessman, musician, bon vivant and game-show champ (The Joker's Wild, and Win Ben Stein's Money), knows lots of stuff, although not quite everything yet. A past contributor to The American Spectator Online, the late great Reform Club blog, and currently on religion and the American Founding at American Creation, TVD continues to write on matters of both great and small importance from his ranch type style tract house high on a hill above Los Angeles.


    • Did Obama run on gutting the military or taxing the rich?

      I’m not against either within reason but within reason, something else gotta give. The numbers aren’t there. The entire military budget is only $800B and the deficit is $1-1.5T.

      [This “over 10 years” crap has got to go. A trillion is merely $100B a year, and usually backloaded.]

      [Zic, I’m not going to poke through some guy’s website to find your argument. But if you post a link to a graph, I’ll come back and turn it into a picture rather than a url. Just right-click on the graph and “Copy Image URL” and I’ll be happy to give you your say.

      But numbers, please, not disembodied percentages. That guy’s website is a rant, not an argument.]

      Based on the White House Office of Management and Budget’s GDP projections, a Romney administration would fork out roughly $800 billion toward national defense in 2016 — a notably higher amount than the trimmed-down $578 billion proposed by the Obama administration.
      Different as they may be, both figures represent a doubling of what Congress allowed during the years before the Sept. 11 attacks.
      Some have asserted that neither Obama nor Romney has a real plan for reining in runaway defense spending.

      • O did definitely run on “gutting” defense. Under O’s budget we would still spend far more then every other country and have a far larger and more powerful military then every other country in the world.

        • I just ran Obama’s advertised numbers for you. We’re still way short.

          • As a general observation, what you say here is a valid, Tom. But the partisan nature of it seems ridiculously misguided and confused. The GOP solution the deficit and so called “fiscal cliff” has been to cut taxes and increase federal spending. In 2010, the TPGOP House managed to cut only 50 billion from the Democratic budget proposal. The GOP logic on this – ala Grover Norquist et al – is to lead from behind by cutting taxes (ie., revenue streams) from which spending cuts will “naturally” follow. Except that for the GOP, the spending cuts never follow, and when that party controls the White House spending always seems to go thru the roof. Conservalogic in action. (Hey, conservatism didn’t fail anyone, it was failed!!!)

            You might not like the Democrats solutions to some of our fiscal problems, but the PPACA was in part an effort to sustain Medicare by reducing costs to gummint. ANd increasing taxes on the wealthy – for all of your complaining about it – actually will contribute to lowering the deficit.

            The problem is that conservatives claim to want lower taxes, reduced spending, smaller federal government, but all they really seem to care about, when push comes to shove, is lower taxes. On the wealthy. (Because they’re the Job Creators, of course. Conservalogic!!!)

      • “Zic, I’m not going to poke through some guy’s website to find your argument.”

        With all due respect, Tom, I think this is a bit unfair coming from you, given the frequency with which you offer links in defense of your argument. I realize you’ve said that DC is not the FP and the culture is different here, so my apologies if y’all run things differently here, but this stood out to me given your usual argumentation style (which I’m not necessarily taking issue with… just the apparent double standard).

        • Well, I offered to post her charts if she sends the URLs. I think that’s quite fair, Kazzy.

          As for the numbers, Clinton-era tax rates and what defense cuts have any reasonable chance of passage, well, it’s gonna take a lot more than that. Ryan was right.

      • I did not read the website, I looked at the two pie charts (found via google images). What he says doesn’t matter a whit to me, and I’m not promoting his blog in any way. But he posted two charts in the same entry that tell an important story.

        One shows the Federal budget. Here’s another, from the Archdiocese of Chicago,

        I’m sure, since they’re from Chicago, they do politics Chicago style.

        The second shows the world’s military spending. Another, from The Center for Arms Control And Non-Proliferation.

        Pie charts. Gotta love ’em.

        • And you do know how to ‘scroll’ and ‘scan’ for pie charts? (Hint: they’re round, I’m focusing on them in honor of the season.)

        • Zic, you do realize that the “federal discretionary budget” of the first pie chart doesn’t include 58% of the budget– mandatory entitlement program spending?

          Your Archdiocese pie chart is only a pie chart for 32-36% of all federal spending. This accounts for a lot of problems in our discussions. And where the defense budget can be trimmed [I have no objection, within reason], entitlements just grow and grow.

          • Of course, the two pie charts above demonstrate that SS beings in about what it pays out, that is, its revenue-neutral.

            Secondly, where is Homeland Security? in the “Non-Defense Discretionary”; the actual cost of Defense proper + Homeland Security is about a Trillion, or about a quarter of our spending.
            Medicare is the only significant growth item in the budget; and Obamacare is intended to rein in that cost- you can debate whether it will or not, but it was a sincere effort to do so. For which the Republicans squawked plenty about “Cutting Medicare!!11!”

            Its true that cutting the budget a full 1/3, to close the deficit can’t be accomplished with a single magic bullet; but the charts that Tom displays here argue pretty strongly for an end to the Bush tax cuts, and significant Defense cuts, at least as a starting point.

          • CBO: Another recession, 9% unemployment if you do that.


            The interesting thing is that if you google “CBO recession,” the major newspapers stop mentioning it after last August 22.


            To Zic: You realize the Democrat-controlled Senate has voted Obama’s budgets down unanimously?


            We’re talking vaporware here.

          • Tom, you’re really missing the point here:

            1) we spend a lot of money on defense;
            2) our military is about as big as the rest of the world’s, all combined
            3) we need to cut back our spending.

            You asked, this is my opinion of where to start. Before schools, before throwing old people off social security, before medical care, before road building, before anything else.

            Cutting our defense spending in half, we’d still be the mightiest nation ever.

          • Amazingly enough, Zic, I’ve heard all this before. Many times. It’s impossible for me to “miss” the point since it’s made with painful regularity. But since politics is the art of the possible, I prefer to stick with that.

            You didn’t acknowledge that your first pie chart represented only 1/3 of federal spending, and that was disappointing. And if we play along with the Barney approach to the budget–if we pretend that there are no bad guys in the world, just bad US policies–if we cut the defense budget in half [never happen], we save $350B/yr. Return to Clinton era tax rates on the rich, theoretically another $70B or so [tax avoidance by the rich will probably weaken that to ~$40B]. Your “ideal”:


            But the 2012 deficit was ~$1.1 trillion, so we’re not even halfway there. Plus these tax hikes and spending cuts [defense spending has at least a partial Keynesian/stimulative effect] will likely provoke a recession, which will cut tax revenues even further. So even the “ideal” won’t achieve in reality what it does in theory. Perhaps Mr. Ryan and I have a point in here somewheres?

            The entire argument was actually contained in the fake poll. The rest is commentary.

          • But since politics is the art of the possible, I prefer to stick with that.

            So what’s possible in your politics? What are your suggestions? All you’ve been able to do so far is blame liberals and Democrats for just about everything. Is it possible the GOP has played a part in what you complain about. Is it artless to suggest as much?

          • It also doesn’t include state spending, which is roughly 0% military. And yes, that’s relevant. The federal government covers all military spending, but shares the burden of social spending with state governments. If we were to devolve all social spending to the states, then the federal budget would be 100% military spending, but that wouldn’t be a meaningful change. And ultimately it all comes from the same place: Taxpayers’ incomes.

          • “So what’s possible in your politics? What are your suggestions?”

            This discussion must be had, but it wasn’t the subject of the post here, which to me appears to be about our attitudes about debt and spending. That’s a useful discussion in itself. I mentioned recently that, as I continue thinking about how the GOP should reach back into its virtue- and community-centric orientation, it will have to decide how much its willing to foot the bill for some conservative spending programs. Will that just be an article of faith? That might be a driving factor for folks of our persuasion (e.g., fund faith-based initiatives on faith that it’ll prove economically effective in the long run, but if not, hey, at least we gave the money to churches, which we like!). But that’s not going to sound very enticing to everyone. The left does the same with their spending programs: it’ll all pan out eventually, but in the short run, we’re spreading the wealth around, a good in its own right. The latter proposition doesn’t ring true to the right, and the former continues to prove itself false. Entitlements are running on pure willpower at this point.

            [Scratch that last sentence, got carried away. Point is, both sides have programs they’d be willing to spend for other than economic reasons. It’s worth vetting that.]

  1. Oh my god! If you tax the rich all their super-rich income, you can’t run the government entirely on the rich.


    I can’t actually address your point, since you didn’t make one.

    I can simply point out the stupidity of that link. If you tax the poor 100% of their income, you can’t fund the entirety of the government. In fact, unless the demographic is “US citizen” I’m guessing no one group can fund the entirety of the government. SHOCKER, right?

    Thank god no one is proposing that! I mean, can you imagine how idiotic that would be?

    Anyways, now that that’s done, what’s your point Tom? I don’t think you get this “blogging” stuff. You’re supposed to point out WHY you think a given link, topic, or quote is “interesting” or “relevent”.

    • Actually, I just thought the fake poll was funny. The comments that follow are the proof of my point. I understand how to do this just fine, Mr. Morat, but I thank you for your concern.

  2. Tax investment income and corporations the way middle-class people are taxed.

    Deficit all fixed.


    • Are you a supply-sider, then? Investment income is taxed quite a bit more heavily than middle-class wages, so this would be a significant cut.

      • No, I’m not a supply-sider. I’m just someone who can compare two numbers and determine which one is larger and which one is smaller. 15% < 28%. 15% < 33%. 15% < 35%. See, I did it!

        And, for some corporations, it's even easier. 0% < 28%. 0% < 33%. 0% < 35%. I bet you can do it to. Why don't you give it a try?

        • Brandon’s talking about double taxation. Which is evil and wrong if it happens to a hedge fund manager, but OK if it happens to somebody who gets income tax taken out, then gets charged for sales tax when they buy something from the 7-11.

          • If wage income is subject to double taxation because of sales taxes, then investment income is subject to triple taxation: Corporate, investment, sales. Actually, quadruple taxation, because ordinary income taxes took a bite out of the initial principal.

        • I’m just someone who can compare two numbers and determine which one is larger and which one is smaller.

          It’s great that you can, but in this case you shouldn’t. To start with, you’re comparing the top marginal rates on ordinary income, which no one actually pays, to the effective tax rate of a subset of corporations who have no taxable income, due mostly to legitimate deductions. (As an aside, that was a total non-story. If you actually look at CTJ’s report, the first two factors they cite are accelerated depreciation and deductions for executive stock options. Depreciation expenses and employee compensation aren’t profits).

          Also, taxes on corporate income are taxes on investment income. Corporations belong to the shareholders, so a tax on the corporation’s profits is a tax on their investments. This adds another 7-10% or so to the effective rate of taxation on investment income.

          The more important but less obvious issue is that any tax at all on investment income results in investment income being taxed more heavily than ordinary income. Steve Landsburg has an explanation here. Also, I linked to a further elaboration by Landsburg and rebutted objections at length here.

  3. Every once in awhile I’ll see a Dem-leaning blogger argue that rather than only revert the top tax rate all of the old rates should return, and that they should be kept that way. Their argument tends to be not just about the deficit, but that arguments to lean on the top tax bracket amount to telling people below that bracket “government isn’t worth paying for”.

    While I obviously disagree with the sentiment they want to spread with that on philosophical grounds, and think in light of the still sluggish economy this would be a dumb move, as far as focus on the budget goes at least they’re consistent. If you think the deficit is a serious problem & you support the current level of spending, then wanting the taxes to pay for it is only logical.

    There’s a huge disconnect on both sides between what their rhetoric suggests they should be trying to do and what they actually end up doing. It’s clear where the biggest chunks of spending are. Those who support current levels should want to pay for it, those who don’t should call for actual Big Deep Cuts rather than bemoan the “sequester” bullshit that doesn’t actually cut anything.

    • I’ve said multiple times that if we want the same level of services we currently have, taxes on just about everybody need to go up. Obviously, right now would be a bad time, but over the next decade or so would be a good time.

  4. TVD

    Why do you bother, most folks esp liberals aren’t going to wake up until we are like Greece.

    • Again, as long we can print our own money and happen to be the world’s reserve currency, we can _never_ be Greece. At worst, we’ll be the UK. Or maybe Japan.

      • If printing money is our strategy for avoiding Greece’s fate, we won’t remain the world’s reserve currency for long.

        • What’s going to pass us? The yen? The euro? The yuan? The ruble?

          • I think there’s something to this—the irony of course being that it’s only our military primacy that makes us The Indispensible Nation, the only one that might get away with monetizing its debt.

          • Well, the Euro had a chance and might’ve been OK if Europe had decided to either go full-bore united Europe or full-bore just a trade union. The yuan might be an alternative if China ever stops using it as a tool to help their own people out. The yen might have a chance if Japanese people start having babies.

            None of that is connected to the military and aside from being the last capitalist country standing after WW 2 and maybe some slight sabre rattling during Breton Woods, our military power doesn’t have much to do with the dollar’s current position.

          • Of course it does. Sorry that blows the whole Barney worldview but there it is. In 1929 and until we hit our stride as the Indispensible Nation in WWII, we were just another nation-state. Today the whole world is invested in the stability of the US, not for mere economic reasons but for the Pax Americana, under which has come the greatest prosperity in the history of mankind. Otherwise, we’re just a big Canada–nice but no big deal.

          • We were the Indispensable Nation, yes that’s right — in the way my garbage can is indispensable. These United States were the dumping grounds for Europe’s poor and during the gold rush in California, Asians too.

            They’d pack boats full of Irish, send ’em over the seas and make ’em work as indentured servants. They’d take them fresh off the boat and put ’em in the Union Army, too. They’d do anything, those poor Catlick sons of bitches. Dig canals and lay rail roads and if you washed ’em up nice they could become passable domestic servants. But you had to be careful, they were thieving wretches. Everyone knew that at the time.

            If the US has become the Indispensable Nation, it was filled to the brim with the scum of the earth. American has its own little traditions of hazing and nobody hated the newcomers more than the previous tide of scum.

            And there was no Pax Americana. We came to pre-eminence, not on the basis of our superiority, but having been far enough from the fighting to avoid the wholesale obliteration we brought with mechanised efficiency to others. American Exceptionalism has a note of truth to it, whatever else may be said of the postwar world. We alone were excepted from the consequences of believing we were so much better than everyone else.

    • I’m afraid you’re probably right, Scott. Ran across this today:

      “The key to attracting adherents is presenting the idea in poetical terms that inflame flaws in human nature. Marx had the ability to select clichés that resonated with envy and the wish to believe in miraculous solutions to the problem of scarcity and self-fulfillment. He assured believers his ideas were “scientific” and moral.

      Republicans better consider this reality when confronting Obama’s “rich are not paying their fair share” argument.

      Countering with “taxing the rich more will not appreciably reduce the deficit” or “this will hurt small business” or giving statistics showing the rich pay quite a bit already will be inadequate. Logic and facts are inadequate.”

      It does seem to make them go away, although that’s not the purpose of wielding them.

      “Envy and scapegoating of the successful Americans will only grow as Obama’s policies devastate the poor. Republicans must counter with a similarly emotional argument (e.g. “Obama policies are enriching the Washington elite.”). The Republicans must also call Obama out for inflaming “envy and hatred” so the public cannot be comforted that taxing the rich is altruistic.”

      Mm-hm. This side of the aisle doesn’t really play it that way, hence a structural disadvantage. Obama doesn’t screw the poor because he’s a selfish bad person, it’s just an unintended consequence of his good intentions and bad ideology.

      But bad ideology is excused–even re-elected!–if its motives are pure.

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