Economic conservative dogma dictates that raising taxes does not increase tax revenue, but cutting taxes can raise tax revenue. The thought being that higher taxer stifles economic activity while lower taxes promote economic activity. Interesting theory, and like most theories, there’s a key caveat: depends. Would the rich hide their money offshore like Mitt Romney? Would they work less, like Bill O’Reilly threatened? Would they take their income in the form of a lower taxed stream like Mitt Romney?
Data does suggest that increasing marginal tax rate son income does not increase tax revenue. But does it have to be that way? Thomas Piketty of the Paris school of Economics, Emmanuel Saez of the University of California, Berkeley, and Stefanie Stantcheva of MIT argue that the above axiom is true because the tax system is so poorly designed it allows people to avoid paying the higher rate. The authors argue that the tax system needs to be reformed in such a way that the tax base is broader; enforcement stronger, and most importantly the tax rates are similar for different kinds of income. Seems pretty straightforward, but wait there’s more. The authors controversially note that tax rates could climb as high as 83% without any adverse economic activity. Of course there is one small detail: Loopholes. Good luck closing those in Congress.
GOP candidate Rick Santorum launched his Faith Family Freedom Tour. Unfortunately for the ex-Senator things got a little rocky for the reactionary one. When asked at a town hall as to why drugs were so expensive many in attendance couldn’t afford the drugs they need for their kids, Santorum went on to defend the pharmaceutical industry and attack people claiming that they are buying iPads instead of medicine. When politely challenged by a woman who was making a point that the oncology drugs were so expensive, Santorum inferred that the woman should be grateful that the pharmaceutical companies bothered to develop the drug. Faith Family Freedom Tour? Three strikes, you’re out Ricky,
Mitt Romney is proving with a lot of money and lot of rich friends a mediocre candidate can win a campaign against a terrible field. A lot of his so called gaffes, are not gaffes, but insight into his philosophy and thought process. He has talked about firing people, making $10,000 bets, ignoring the poor, called corporations people, wants homeowners to be foreclosed, would have let auto industry fail, and believes in self-deportation to name a few. These aren’t gaffes. Gaffes are when Joe Biden says “it’s a big fucking deal” over an open mic or confuses the New York Giants with the San Francisco Giants. What Romney is doing is providing us with a sneak preview of his administration. An administration that will line the pockets of the wealthy, open America to be plundered by business, and put increased downward pressure on the lower and middle classes. No, they are most definitely not gaffes.
So today’s lesson? There are only two certainties: Taxes and GOP Presidential Candidates are bad for America.