The Crowhill Report - Content

Views and opinions on the news, culture, politics, beer, art, science, education, religion and ethics

Sites endorsed by Crowhill:
Crowhill Publishing
The Krehbiel Report on Publishing@gregkrehbiel

my email to Steny Hoyer.

by John Krehbiel on 17 December 2010

You have permanently lost my vote. your vote in favor of the Republican extension of the deficit-creating Bush tax cuts is unforgivable.

Tax cuts do not stimulate the economy. If they did, the Bush tax cuts would not have thrown away the surpluses of the 90s.

At the very least, the Democratic leaders in the House should have insisted that the Senate repeal DADT and ratify START II before any consideration was given to the tax cuts.

I do not believe that letting the tax cuts expire would have hurt the “recovery” for one simple reason; the low income people who spend their entire paycheck don’t pay much federal income tax anyway. High income taxpayers don’t spend much of their income. A giveaway to them is not stimulatory.

In case you think that my not voting for you in the future is an empty threat, you should know that I still don’t buy Maxwell House coffee because of commercials that irritated me 30 years ago. I have a long memory.

2010-12-17  »  John Krehbiel

Talkback x 31

  1. kdeb kdeb
    17 December 2010 @ 8:53 pm

    The invitation to comments says “What do you think?”

    I think “An elephant never forgets….”

    But no one cares what an elephant thinks….

  2. kdeb kdeb
    17 December 2010 @ 8:54 pm

    that is, btw, me the elephant, not you the elephant…

  3. rr
    17 December 2010 @ 9:30 pm

    Well, from everything I’ve read, you’re just flat out wrong about this. Letting the tax cuts expire would have raised taxes on many small businesses. If a small business sees its taxes go up $40,000, it sure won’t hire any more people. In fact, someone may get laid off. And that most certainly would hurt the recovery.

    Perhaps we need to change the tax structure so that this doesn’t apply to small businesses. But from my understanding, it does at the moment.

  4. Greg Krehbiel Greg Krehbiel
    18 December 2010 @ 12:33 am

    I don’t see how tax policy has anything to do with DADT and START.

  5. John Krehbiel John K
    18 December 2010 @ 8:43 am

    Leverage. Republicans want to reduce taxes for their plutocratic overlords, make them bargain for it. The trouble is that almost everyone buys the tax cut Voodoo now, even Democrats. After all, it brought so much prosperity in the last decade, right? When something helps the economy that much, lets do more.

    The truly sickening thing is that, while these tax cuts cripple the ability of government to provide vital services, the Republicans will use the deficit they themselves created as an excuse to remove any and all social safety net for workers.

    See, for instance, how Arizona can afford to build sports arenas, but has to deny heart transplants to citizens.

  6. Greg Krehbiel Greg Krehbiel
    18 December 2010 @ 10:29 am

    Apparently everybody — Republican and Democrat — wanted to keep the tax cuts for lower and middle income people. So the only debate was over tax cuts for “the wealthy.” And we’re talking about a change from 35 percent to 39 point something percent.

    Do you really think that small difference was going to make any substantial change in the deficit? Do you really think that small change was going to “cripple the ability of government to provide vital services.”

    I don’t think that’s credible.

    The debate was not about revenue.

  7. DSM
    18 December 2010 @ 11:37 am

    People tend to have trouble grasping numbers with too many zeros, which is an instance of the more general problem that our intuitions often break down in new situations. IIRC — don’t have a study at hand, but could probably find one — people’s guesses about relative scales and growth behaviour (like compound interest) are frequently way off, even among the educated.

    I suspect something like this is involved in people’s views on tax policy. The last time I saw the numbers, even taxing everyone making more than 250k at 100% of their annual income wouldn’t pay for everything people — not all of them leftists — ask the gov’t to do. That suggests to me the problem isn’t a supply-side one, and has more to do with the perspective of people who think that not taking someone’s money can fairly be described as a “giveaway”.

    As the old line goes: Merry Christmas! My present is not stealing any of your stuff.

  8. pentamom
    18 December 2010 @ 11:41 am

    John, why do you object to not raising people’s taxes? If people have been paying a certain rate for 7 years, it’s not a “cut” if they don’t start paying more — it’s an increase if they do.

    But if you don’t think I need that extra $1500 this year, maybe you don’t need it, and you can send it to me? >:-)

  9. John Krehbiel John K
    18 December 2010 @ 12:18 pm

    What extra $1500? The difference in my taxes will be a couple of hundred at most. The $1500 figure assumes child tax credits, college tuition credits, and such that I am no longer qualified for.

    Extending all the Bush cuts through 2020 would add another $2.7 trillion to the debt. How is that not about revenue?

  10. Greg Krehbiel Greg Krehbiel
    18 December 2010 @ 1:27 pm

    John — even if the $2.7 trillion figure is true, that’s for extending all the tax cuts, and as I said before, Democrats were already on board with keeping the middle class rate the same, and the middle class pays the majority of the income taxes in this country.

    The real question is how much revenue is lost by failing to raise the rate on the wealthy by 4%.

    (And that question assumes that raising the tax rate results in increasing revenue, which isn’t necessarily so.)

  11. John Krehbiel John K
    18 December 2010 @ 1:39 pm

    Pretty sure the figure was $700 million, but too busy to look it up right now.

    The thing is, nobody currently in Congress really gives a damn about deficits, but they will use them as an excuse to say “We can’t afford it” for some things, while paying off their backers with still more subsidies and special treatment will go on as always.

  12. Greg Krehbiel Greg Krehbiel
    18 December 2010 @ 3:51 pm

    In terms of the federal budget, $700 million is a rounding error.

    I agree that nobody actually wants to address the deficits. They’re just hoping it will magically go away or something.

    Friday I went to a lecture in D.C. on the financial situation of the states. Apparently it’s beyond dreadful. It’s easier for Iraq to issue bonds than it is for most U.S. states.

    I had assumed that part of the problem was unfunded mandates, but the guy giving the lecture said they’re not nearly as bad as funded non-mandates — e.g., where the federal government gives a block grant to establish some new program. The grant never actually covers the costs, the states don’t administer them well, and they end up more and more in debt.

    The topic of the lecture was whether bankruptcy is an option for the states. (Answer — maybe, in a very limited way.)

    A federal bailout would only postpone the crisis because the problem is structural. Systematic abuse, over-spending, etc.

  13. pentamom
    18 December 2010 @ 5:31 pm

    Yes, it’s child tax credits. But I didn’t say it was $1500 you wouldn’t be getting, I said it was $1500 I wouldn’t be getting. Why don’t you want me to have it, when our family really needs it? If it’s not a significant amount, you should just send it to me, even if you’re not getting it back on your taxes, because I obviously need it more than you do, if you can be so cavalier about it.

    Solution for the revenue issue — there are about 20 million things the government should stop spending money on.

  14. pentamom
    18 December 2010 @ 10:35 pm

    To complete the thought — as long as they receive cover from people who complain it’s my problem that I don’t want ever-increasing amounts of my husband’s earned money confiscated if there are deficits, there is no incentive for them to stop spending it foolishly and blaming *me* for not wanting to give them more to “deal with the deficit.”

  15. kdeb kdeb
    19 December 2010 @ 8:39 am

    via worldnet:
    plutocrat (someone who exercises power by virtue of wealth)

    So are you no longer shopping???????

  16. Derek
    19 December 2010 @ 10:21 pm

    This should not be about tax cuts – its should be about spending cuts. The government MUST cut federal programs and the size of government itself. This is always the point liberals miss or purposely ignore to our demise. They are the never ending druken sailor. Unfortunately, they take us all down.

  17. Greg Krehbiel Greg Krehbiel
    20 December 2010 @ 10:45 am

    You’re right, Derek. It should be spending cuts first.

    I would like to see a block of Congressman block any and all legislation until there are serious spending cuts.

  18. Ken Crawford
    20 December 2010 @ 3:21 pm

    John, ignoring for a moment what the right policy is and focusing on the politics, I think you’ve seriously misjudged who has leverage right now. The Republicans would GLADLY let the tax cuts expire. Obama is the one who’s on record with “no new taxes for those under $250k”. If taxes were to go up, it would be his “read my lips” moment.

    There’s no way, and I mean NOOOO way, that the Democrats could extract anything like the DADT repeal or SMART for the tax cuts. They were lucky to get the unemployment extensions.

    The Democrats have no leverage on tax cutting right now. That’s why the compromise, as ugly as it is, was made.

  19. Greg Krehbiel Greg Krehbiel
    22 December 2010 @ 9:57 pm

    So now that Obama has got DADT and Start, is it possible that Hoyer was actually doing what you wanted anyway, just using a different strategy?

  20. John Krehbiel John K
    22 December 2010 @ 10:05 pm

    I’m surprised that those two bills made it, but no, I wanted the “temporary” tax cuts to expire.

    It does show what each side really wants, though. Tax cuts for the rich, and an advancing liberal social agenda, but nothing for the vast majority of Americans. What gets paid for gets done.

  21. Greg Krehbiel Greg Krehbiel
    23 December 2010 @ 12:28 am

    Why are “tax cuts for the rich” an issue? The revenue that might be generated is trivial. Why do you care?

  22. John Krehbiel John K
    23 December 2010 @ 9:23 am

    I’m talking about all of the deficit-creating tax cuts.

    The biggest reason I care is that Republicans will cut revenue, then claim that we “can’t afford” any programs that don’t channel money into the pockets of the plutocrats.

    It’s like I said elsewhere, the Republican strategy is like quitting your job, buying a luxury car, and complaining that the electric bill is why you can’t feed your kids.

  23. kdeb kdeb
    23 December 2010 @ 10:11 am

    John, I don’t take the postition that any arbitrary amount is reasonable or unreasonable for taxes for the “rich” (whichever group that is – not any of us I am supposing.)

    But aren’t you accusing the Republicans of the same argument you yourself use?

    The deficit is not created by NASA. (People whose health care items are not being paid for say things like “We can put a man on the moon but Medicare can’t give me this medical procedure. ~ applause follows )

    The defecit is not caused by the adjustments of the global economy. Or two wars. Or the repurcussions of 911. Or runaway spending. Or the 2010 eq

    It is caused by

  24. kdeb kdeb
    23 December 2010 @ 10:11 am

    John, I don’t take the postition that any arbitrary amount is reasonable or unreasonable for taxes for the “rich” (whichever group that is – not any of us I am supposing.)

    But aren’t you accusing the Republicans of the same argument you yourself use?

    The deficit is not created by NASA. (People whose health care items are not being paid for say things like “We can put a man on the moon but Medicare can’t give me this medical procedure. ~ applause follows )

    The defecit is not caused by the adjustments of the global economy. Or two wars. Or the repurcussions of 911. Or runaway spending. Or the 2010 equivalent of $300 toilet seats.

    It is caused by “tax cuts for the wealthy.”

  25. kdeb kdeb
    23 December 2010 @ 10:12 am

    and oops sorry for the double post – I hit a weird key somewhere. . . .

  26. Jordan Henderson
    23 December 2010 @ 11:00 am

    Note that receipts went up dramatically between 2001 and 2008, even after these “deficit producing tax cuts” were in place, but expenditures far outpaced receipts.

    Clearly, expenditures are the problem. It’s not like quitting your job and buying a big screen TV, it’s more like taking on an extra part time job and buying a luxury car, a mansion and a vacation home.

  27. John Krehbiel John K
    23 December 2010 @ 7:03 pm


    Your interpretation only makes sense if you start looking in 2001. What I see is a dip in revenue.

    Note that it took until 2005 to recover to the revenue of year 2000. I can only assume that the figures are nominal and not adjusted for inflation since the spreadsheet doesn’t say.

    The interesting thing is this. Revenue is only weakly correlated to tax rates. The much stronger correlation is to GDP.

    IOW, if you want to raise revenue, put people to work. Giving rich people more money won’t do that, because they don’t spend much of their income.

  28. Jordan Henderson
    23 December 2010 @ 10:47 pm

    The Bush tax cuts didn’t really kick in until 2002 and 2003. The dip in 2000-2001 was due to the recession.

    Nevertheless, it’s pretty clear that it’s not taxes, but spending that is responsible for our deficits. In that period, while revenues increased marginally, in line with GDP growth, expenditures increased dramatically.

    Right now, the rich are spending. A tax increase might put the brakes on that one area of consumer spending that seems to be coming back strong.

    In any case, the economy will never truly recover as long as it’s so dependent on consumer spending alone. Much of that consumer spending goes directly to our import/export deficit. We need more of the economy to be dependent on investment and risk capital. Investing is something the rich does a lot that the middle-class and poor do not.

  29. John Krehbiel John Krehbiel
    24 December 2010 @ 10:42 am

    You’re kidding, right?

    You really think that investment can do any good when people can’t buy? How will anybody sell anything? The economy is and will always be dependent on people buying things.

    What on Earth is “the economy” if not people buying and selling goods and services?

  30. Jordan Henderson
    24 December 2010 @ 1:42 pm

    The economy is not only buying and selling, but producing. Producing effectively involves new ways of doing things, investment, risk and innovation. All those things require capital.

    Sometimes, things can’t be bought and sold because the costs of production are too high. Almost nobody could afford to buy cars until Henry Ford, at incredible risk and personal capital, pushed the cost of producing cars way way down.

  31. mossomo
    5 January 2011 @ 8:52 pm

    Hahaha – Bush taxcuts – BDS – try the people who pushed the banks to provide loans to people whose only money down was their welfare check.