4/16/12

Reflections on Senate Productivity, Corporate Taxes, and the "Buffett Rule"

Lazy Senate

There was a link at the Drudge Report (Republican leaning news aggregation site) today with the headline "Democrat-controlled Senate laziest in 20 years." The link was to a Washington Examiner article with the same headline.

The gist is that the 2011 Senate "was a do-nothing chamber," being in session 170 days and logging an average "of just 6.5 hours" per day. The Senate only passed 90 public laws, and a total of 402 measures, both figures being the second lowest in 20 years.

Why are the Republicans complaining? Aren't they for less government?

That 90 public laws and 402 measures are low figures speaks to how large a monster the government has become.

The less legislation is passed, the better. Congress is not a law-making factory. Their job, contrary to what has become the popular opinion for both Democrats and Republicans, is not to shell out laws as fast as possible. Yes, making laws is part of their job description, but that doesn't mean that they have to meet at all or pass any laws. It's this attitude that the legislature must legislate every second of the day that has led to the overspending, high taxes (yes, they're lower than at some points in the past--but don't forget that the government did just fine without a federal income tax before 1913), stupid regulations that don't make sense, endless bureaucracy, and corruption (pay to play schemes, laws favorable to the industries that make the most campaign contributions and/or hire the best lobbyists, etc).

A lazy Congress is a good Congress.

Corporate Taxes

Isn't it unfair that some corporations earn billions in profit and yet pay no taxes?

No. Corporations, whether they send the government a tax check or not, do not pay taxes. Only flesh and blood people pay taxes. When a corporation sends the government a tax check, the corporation's shareholders and its customers are the ones really paying. Shareholders pay through reduced dividends and lower stock prices while customers pay through higher prices for goods and services.

We are all shareholders, customers, or both. We are the ones paying corporate taxes. Think about that, along with the fact that the good old USA has the highest corporate tax rates in the developed world.

The Buffett Rule

It's all the rage on cable TV news shows. There's the inevitable debate: Talking head A asks talking head B whether it's fair (implying that it's very much unfair) that a billionaire's secretary pays a higher tax rate than the billionaire.

Talking head B responds sheepishly that while it might be true that the secretary pays a higher rate, she pays a lot less in taxes. A lower tax rate applied to the billionaire's earnings still results in a much larger check to the government.

That's a fair point, but talking head A immediately interjects that that is not part of the issue. It's about fairness. Why should the lower wage earner pay a higher percentage of her earnings than the rich bastard?

The inevitable conclusion is that rich people should pay a higher tax rate than the rest of us. This conclusion is not contradicted by anyone on the idiot box--those seeming to argue against it only make the point that rich people's taxes shouldn't be raised. The way it is framed, the debate is about whether or not to raise rich people's taxes.

Here are a few questions. If it's unfair that the secretary pays a higher tax rate than her boss (and I agree that it is unfair), why not lower the secretary's tax rate? Why keep her tax rate the same and raise her boss'. Why not keep the billionaire's tax rate the same and lower the secretary's?

"But, but, but, but, but," talking head A will stammer as fast as the text is entered into his teleprompter, "how will the government pay for the things we need?"

But that's the point. A large portion of the government's spending is for stuff we don't need. And I'm not just talking about GSA talent shows, overlapping programs (pdf), bridges to nowhere, etc. Why should it pay for anything beyond the bare essentials?

Let the government pay for (that is, let the government take our money to pay for) the things from which we all derive some benefit and would unjustly derive a benefit if we didn't pay our share. These positive externalities include the military (debatable), roads, education (debatable in its current form), and other things of this sort. The list is rather short. That's all we should pay for through taxes.

All the rest, like GSA parties, funding of the arts, funding of welfare, abortions, etc, should be up to private citizens. Why should you pay for someone's party, art work, and so on? If you want to pay, great! Pool your resources with those who share your beliefs and do some good. But why should those others, who couldn't care less about the poor, starving artists, etc be made to pay too?

You have a cause? Good for you. Advance it. But don't make your opponents pay for it too if you want to keep things fair.

If Warren Buffett thinks the government needs more money, let him write a check. Everyone that agrees with Buffett should follow suit. But why should others be made to pay as well?

Let's make a deal, my fellow Americans. I won't make you pay for my version of the good, and you won't make me pay for yours.

Wikinvest Wire