Monday, October 26, 2009

Not a tax Increase

“That wasn’t a tax increase,” Nancy Pelosi said. “It is … eliminating a tax decrease that was there … It was controversial to begin with. It is … a boon to those who have had it, for now. But I think that you will see that happen."

The House Speaker recently told a reporter those words in reference to the George W. Bush tax cuts from earlier this decade. Her point is justifiable. The tax cuts had a sunset provision within the original bill, because Congress and Pres. Bush did not have the votes to make the new tax policy permanent. Thus a 10 year sunset provision, and Speak Pelosi willingness to allow them to expire. She is not proposing and tax increase, because the tax code is merely returning to prior levels.

One does not need to take more than an entry level to Philosophy class (this author has only done so...) to realize the fallacy used within Speaker Pelosi statement. She is using tradition as the justification for her non tax increase. If the tax brackets where at some point higher then it was not a tax increase. But what if tax marginal brackets where at some point lower, even lower than the Bush tax cut levels? Utilizing her logic, the Bush tax cuts where not tax cuts, just a repeal of tax increases.

Remember, tradition is not a valid argument. Just because something was one way in the past does not justify it today. If so, then no change can ever occur because of tradition.

Thus to conclude Speaker Pelosi's statement on her repeal not a tax increase:
At one time there was no income tax on US taxpayers. The 16th amendment to Constitution allowed for income taxes. Therefore, any repeal of income taxes by Speaker Pelosi's logic should create a zero per cent income tax, everything else is a tax increase.

3/5 Rule

Framers of the Constitution included a rule to count slaves for purposes of creating a democratic republic.

Every non-slave was counted as one person in the census; however a slave was considered 3/5 of a person. This rule was later repealed in the Constitution and today everyone is counted as one person.

But this is a crucial argument used by those that do not approve of the Constitution and its framers. The founding fathers created an erred document that dictates our government today. Therefore any document that once contained the 3/5 rule has had errors in the past and today's attempts to remedy "faults" in our republic are justified.

Questions:
-Why was the 3/5 rule included in the Constitution?
-Are the framers "Racists" for utilizing a 3/5 rule?
-Does the fact that Constitution was later changed justify a polictician creating a policy that is unconstitutional?

Gap between the rich and poor

One measure used by communists and socialists is to determine economic prosperity among those across all economic "classes".

A statement is made that the economic growth that has occurred has not helped those that are considered poor by whichever metric is used. The way to measure this is look at top income earners and those under a poverty level. If this measure is becoming wider than in the past, it shows that the poor is either getting poorer or not enjoying whatever growth has occurred in the economy.

Sounds great! One should be a champion of those in the lower economic levels and this seems a simple way to measure there relative levels of prosperity.

Reasonable Questions:

-Does measuring income solely determine ones relative level of prosperity?
-Historically has this metric accurately portrayed economic success?
-Does an increase in the gap between the "rich" and "poor" signal a negative sign for those that earn lower incomes?
-What inputs account for the change in levels of relative income?

Friday, October 23, 2009

Government creates jobs

Politicians use this phrase in a variety of ways, especially when campaigning for an elected office.

I hear this over and over again, from those that consider themselves champions of free market economics or those favoring government regulation. A politician will enact some policy or tax code to in effect stimulate job growth.
Sounds great! Who would be against job growth?

Critical Questions-
-Is the job creation one in the private sector or public sector?
-What defines a job?
-Are government policies the reason for the job creation or is this merely reducing an entry barrior for a business?
-Do short term subsidization's create long term economic growth and "jobs"?
-Is corporate welfare beneficial to our economy?

Tax cuts for the wealthy

This is one the most common topics used by a vast majority of people.

The idea is that a progressive tax system is the preferred tax system because "those that can afford to pay more, should."
There are numerous taxes that one must pay in the United States. To keep things simple lets stick to personal income taxes. The current system taxes different thresholds of income at a progressively higher rate. Thus someone earning a higher income will eventually pay a 35 per cent tax on every marginal dollar earned to the federal government. A "rich" person earns a higher income, and thus pays more taxes.

The critical questions that one should ask include:
-Does a higher marginal tax bracket mean someone will pay more taxes in the long run?
-Does this mean more taxes paid in the short run?
-Are we talking about an income tax or a wealth tax?
-Do higher income earnings always denote someone of relative wealth?
-What impact do marginal income taxes have on the incentive work, save, and invest?
-Are all tax cuts the same?
-Does a government maximize its tax collections with a higher marginal progressive tax system?
-Is government spending money by reducing marginal tax rates?
-Is a "repeal of tax breaks" not a tax increase, solely because taxes where higher at some point beforehand?


There are more questions. Look for additional posts to answer these questions.

Blog Format

This is an attempt to classify common liberal/ socialist premises that are an error. By educating yourself on these arguments, you can object to there use. If you do not, the liberal in question will have you arguing on there "turf", which is what that person wants.

I will open treads and update additional research to that particular topic.

PBTJ!