No. What Brown and Jacoby won’t tell you is that from 1954 to 1963, the top tax bracket was a stultifying 91%! The bottom rate was 20%. Even with a Republican in the White House from 1953 to 1961, and Republican control of Congress from 1947 to 1949, the top rate hovered in the 80-90% range. Even the most progressive among us would agree that there does come a point where the tax burden gets so high that it really does stunt economic growth. (Progressives, moderates, and conservatives seem to disagree as to at what point….)
After Kennedy’s proposed cuts, the top rate went down to 77% in 1964, and the bottom rate to 16%. What’s the top tax rate now? Thirty-five percent.
It would be laughable that Brown would compare Kennedy’s cutting of a confiscatory 91% tax rate to his own proposals to further reduce one of the lowest tax rates in the industrialized world, if it wasn’t so shameless.
The best reason for a high top bracket is not to reap extra revenue but to make it pointless to have a huge income. Corporations won’t be able to justify paying their CEO 10 Million if it costs them 100 Million to do it. But if it only costs them 15 Million, that seems almost the same.
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p>And all that private wealth may very well fuel economic growth, but that growth isn’t necessarily good. It’d be better to contract the economy and reduce the number of people driving to jobs and spending money on their silly whims.
What is it you advocate?
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p>That we not blessed to live in a city with governemnt subsidized rail service should revert to growing potatos in our yards and tugging our forelocks?
Yes, more of us should be working on local farms growing potatoes, and more of us should be staying home in single-earner households.
Pol Pot was a member of the reality based community. Drive them out of the city and into the countryside so they can grow those potatoes.
Kennedy was cutting taxes and government spending from their wartime levels to a sustainable peace time levels. The Korean war, the Suez Crisis, the draft, and the uneasiness with the Soviets dictated that Republican and Democrat alike had to support higher taxes back in the 1950s. Then the average citizen understood that taxes went to pay for the defence and welfare and barely criticized the rates, understanding that they were sacrificing for their country. There were cartoons extolling the patriotism of paying high taxes. Also everyone back then valued budget balancing which was why Ike balanced it more than any other President.
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p>Its completely ahistorical to call JFK a ‘supply sider’. As Nixon pointed out, “we are all Keynesians now’ and everyone on both parties were Keynesians at that point. Friedman’s ideas didn’t pick up steam until the early 1970s, proto-supply-sider Goldwater failed to carry more than five states in 1964. It wasn’t until Mies, Laffer, and Friedman gained more prominence with the ascendancy of Reagan that the term ‘supply side’ economics even caught on. And it was so out of the mainstream that moderate conservative presidential candidate George Bush in 1980 called it ‘voodoo economics’
…dcsurfer would like nothing better than for us all to become Amish. This person has posted several comments and diaries which seem to oppose anything the least bit modern or that make lives easier.
I don’t think we should all become Amish, just because I advocate for local agriculture and oppose funding genetic research and biotech and unsustainable growth in order to maintain our current lifestyles. I think we have to do what James Kunstler says:
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p>Not only James Kunster, but the Pope is saying the same thing, with the same urgency:
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p>Pope urges lifestyle changes to save planet
…practically taxing electronics and internet usage out of existence.
I think we don’t pay the true cost of internet traffic and electronics, and I think we are losing sales tax revenue and hurting local businesses by not taxing internet sales and internet use, but I don’t think they should be taxed out of existence. I think the internet is a super valuable asset that will help us live sustainably and smartly and increase public health and justice.
I object to taxing general usage. There was also that diary about taxing video games 200%.
Someone that constantly streams Pandora all day long should pay more for their internet that a grandmother who logs into her gmail once a day. All that bandwidth usage requires massive system upgrades and more cables and computers that have a huge carbon footprint. Reducing traffic by making people pay the cost of what they use would allow us to minimize the carbon footprint.
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p>And yeah, video games should be taxed 200%, there is no public value to them, they are a waste of human resources, a shameful investment.
…that every method of receiving the internet: cable, phone line, electricity for the computer, are already taxed. There are plenty of things out there with “no public value”. That’s the beauty of such an advanced civilization and high standard of living. We can allow ourselves to slack off and engage in activities purely for entertainment or enjoyment, but we have sales taxes with exemptions for necessities for that reason.
BMG pays for bandwidth use (and Soapblox charges more for more active sites), but I don’t as a user pay anything for my usage, I pay a flat fee to Verizon, and the Diesel Cafe’s wifi service. So I can sit here and refresh this post every ten minutes to see if anyone responded, and it doesn’t cost me any extra, but each reload clogs the pipes with almost 100K bytes, even if there is nothing new on the page. You can tell it is a lot of traffic because it takes a while to load sometimes. We can either demand twice as big a pipe, or start reducing bandwidth use as much as possible. Comcast and Verizon are happy to build us and sell us newer faster pipes, but the public interest is in minimizing data volume.
My teenage grandchildren who have to buy their own games were not impressed, nor was my neighbor hooked on Pandora “as background”.
I get the idea, I really do. The problem is, there’s not much energy spent in transporting food.
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p>Consider: I like apple cider. So much that I drink a gallon a week, 26 weeks a year. That’s a lot of cider at $5ish a gallon, but I love it. My local grocer stocks Zeiglers, which comes from Pennsylvania. There are a lot of apple trees between here and Philly. I’d rather get my cider from central Mass or somesuch.
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p>Here’s the thing: for every 170 gallons of cider I purchase from central MA instead of Lansdale PA, a total of one gallon of diesel fuel consumption is avoided. That’s one gallon of fuel saved every 6.75 years, even at my high consumption rate!
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p>Want to cut your environmental impact from food? There’s a few easy things you can do:
1. Don’t throw food away — that’s the ultimate waste.
2. Grow your own, for sure: get yourself a victory garden.
3. Eat less meat. The energy cycle for a pound of meat is massively larger than a pound of grain or fruit or veg. It’s not about going full-blown vegetarian necessarily — just reduce as substantially as you can.
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p>Ultimately, land use is the problem, not energy in transportation. The widespread land use needed for agriculture is because we have to grow many pounds of grain to get one pound of beef, chicken, pork, etc. Eat the grain directly and we’ll be able to feed the same number of people, more healthily, using less land and less fertilizer.
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p>Now, I do like local food, but not for environmental reasons. I like it for culinary reasons. I like it for cultural reasons. I like it for economic reasons. But know this: 1 pound of vegetables from California is in general far better for the environment than 1 pound of meat or cheese from New England.
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p>Assumptions:
186 ton-miles/gallon
314 miles Lansdale to my home
50 miles Central MA to my home
weight 1 gal cider == weight 1 gal water
trucks are always full, always 18 wheelers, drive directly
That single gallon is not insignificant, it could be the gallon that gets the firetruck all the way to your house in 2023, instead of running out six blocks away. That extra 260 miles uses about 50 gallons of diesel per truck that we should be doing our best not to use if we don’t have to. I don’t know how many truckloads of cider are trucked up here a season, but if we have the ability to grow those apples locally, shouldn’t we? What is the downside to that?
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p>And, what if there is another fuel crisis, one that shuts down transportation for a while. Shouldn’t we be as prepared as possible by having as many local farms as possible? I don’t think we could have too many.
but that gallon is insignificant. You can’t do everything — you’ve got to prioritize. The big problem I see with environmentalists is that they refuse to use engineering to prioritize, instead claiming that everything is significant… even consuming one extra gallon of diesel fuel every 6.5 years — somehow connecting that to my house burning down in 2023.
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p>Come on man. Think rationally.
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p>You can’t do everything. Instead of wasting energy (and about $1/gallon cider) on saving one gallon of diesel fuel every 6.5 years, I focus on things where my bang per buck or effort is greater. In terms of food, I focus on being vegetarian 5 times a week, composting my food waste, and growing vegetables in my urban garden. That’s effort well spent — the avoided fuel consumption from not eating meat is orders of magnitude more than drinking cider from MA instead of PA. Other ways I save fuel: I don’t own a car and when I rent, I get a high mpg vehicle.
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p>There’s no sense wearing myself out or running out of money trying to do everything, regardless of benefit per cost. It’s foolish, and it sends the message to the masses that to do anything substantial you’ve got to do everything, lest your house burn down in 2026.
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p>That’s the wrong message. So, what’s the right message? Do a little more to reduce your negative impact, and do it wisely. Don’t run around willy-nilly doing something, anything! to feel like you’re making a difference. Make a real difference by making wise choices.
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p>Finally:
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p>Your scenario is flat out dumb. If the problem was foreign oil — about half of our oil comes from the US and Canada. Refineries? They’re not all located in one place (although too many are on the Gulf of Mexico). Our fuel resources won’t instantly fall to zero. More to the point, trucking food is one of the most efficient uses of fuel that our society has… if our fuel supply fell to a mere 10% of what we have now, we’d still have plenty of access to food delivery. We’d all be telecommuting or mass transiting or carpooling or bicycling long before we’d stop shipping food.
to increasing local produce production? We have stimulus money, we should be using it to increase local farming capacity and growing more of our food locally.
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p>And, if there is a locally produced version of anything, shouldn’t that be what we choose?
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p>I disagree about your “right message”, I think that message preaches to the converted, and doesn’t affect that vast majority of people, perhaps it even puts off some people. They just go into the store and buy apple juice without caring where it came from, why not put a locally grown version in their cart for them? If it is important, then we can’t just let people do what they feel like and rely on their selfish sort of self-denial and narcissism in being exemplary citizens. Relying on that sort of motivation apparently creates a defensiveness in people about other areas of their life that they are not exemplary (like buying out of state cider), causing them to reject suggestions that they are not already doing, saying “we cant do everything, I do this this and this and that’s smart, the rest is dumb”. No it isn’t dumb, we might have a fuel crisis and we need to be prepared for it.
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p>Perhaps tax credits for your urban garden, or maybe state sponsored gardening instruction, things like that.
The energy differential required to grow food in some places is higher than the energy cost of shipping it. The labor costs can be dramatically out of whack, as can land costs.
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p>Nonsense. If somebody wants to support local production at the farmer’s market, that’s great. But why does it make sense to subsidize local growth of food in conditions that are suboptimal for growing food in the first place?
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p>Not if it’s more expensive, of lower quality, or comes with local detrimental externalities, we shouldn’t.
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p>That’s just it — it’s not important. The environmental impact of us drinking apple juice from concentrate grown all over the world is quite small. Shipping across the ocean is incredibly efficient. Processing in large facilities is much more efficient than at small ones. Providing a consistent product year round, despite the seasonality of apples, has tremendous value.
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p>You’re sucking the air out of important issues to spend them on trivial issues. It’s like somebody behind in their mortgage payments deciding that returning their beer cans for the nickel deposit part of the solution. It ain’t. Those nickels are so small in comparison to the thousands of dollars in payments that focusing on them merely takes away from finding a solution of the appropriate magnitude.
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p>Unless you live in a cave, you’re living in a glass house my friend. Be careful with those stones. I guaran-damn-tee you that I could follow you around for a day and find 1000 things in your life which are less “exemplary” than drinking cider from PA instead of MA.
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p>The US consumes 18.7 million barrels of oil a day (roughly 750,000,000 gallons a day). You’re worried about my consumption of one gallon extra every 6.5 years?!?! Really? You’ve got to think in orders of magnitude — to do otherwise is dumb. Yeah, dumb. Want to cut consumption? Higher mpg vehicles. Carpooling. Land use and zoning policies. Bike lanes. Improved sidewalks. Conversion of oil-fired power plants to natural gas. Lower the speed limits. Improve access and quality of mass transit. These are the issues — not apple cider from PA instead of MA.
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p>The fact is that we can’t do everything. We’ve got to make choices. I suggest that we make choices based on bang for buck — don’t be a martyr for little gain. Take the easy wins, and encourage others to do the same. Otherwise we get into this situation where people are loading their groceries in canvas bags into their Ford Excursion and think that they’re actually making things better. You also get into situations where you’re criticizing me for drinking apple cider from a few hundred miles away instead of cola grown from corn 1500 miles away or beer made with hops grown 2000 miles away or wine from 3000 miles away.
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p>So “we might have a fuel crisis” but you can bet that if we do have one 20 years from now, the 3 gallons of diesel fuel extra that I consumed because my cider is from PA instead of MA (saving me a trip on a Thursday to the farmer’s market and $1/gallon) will not be the cause. Between transit and heat, I can find hundreds of thousands of people who waste 3 gallons a day, and you’re worried about my 3 gallons every 20 years?
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p>Good grief man.
Shipping across the ocean is very efficient if you are a corporation trying to make money, or a consumer trying to consume as much as possible, but it hurts ecosystems and uses up non-renewable resources. Are you a globalist?
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p>I think the point of growing food locally is not merely to save diesel (which is very important) but also to foster biodiversity and sustainability, to create jobs, to save land from becoming suburban subdivisions, to make it possible to shut down factory farms…
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p>I am not worried about any one person’s individual choice that might waste 3 gallons of fuel every twenty years. I wasn’t throwing stones at you, and of course my life is full of things I could improve, far more than exemplary things that I could claim, like how I Mortite my windows and bike as much as I can, eat vegan and try to buy local. I also drive a clunker (but very little) and take long showers, don’t remember to check my tire pressure, etc. That was my point to you, that even though you and me do our personal things to reduce our footprint, we can’t get smug and say we do enough and that other people should just be more like us. We have to support public projects that cause changes in lifestyle, that motivate people to bike and drive slower and consume more local products.
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p>I agree with all your proposals, though I think that higher MPG cars have been shown to result in more miles driven rather than reduced consumption. So in addition to improved MPG, we need to reduce the number of people driving to work and reduce how far people drive to work. I think a higher federal gas tax would encourage that, and contracting the economy to eliminate as many jobs as possible, for example, the insurance companies and HR positions that exist to deal with the insurance companies. Those people should be paid to stay home. We need more single income families. We need less money shoveled into biotech companies that have huge carbon footprint.
My point was never to be smug or to say “I do enough” but rather to point out that arbitrarily choosing environmental hills to die on is a terrible way to win a war.
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p>As for higher MPG — it’s been shown to result in both more miles driven and lower total consumption… which means consumers get more of what they want and the Earth is better off for it. Double win.
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p>Erm… you’ve lost most folks on that one. I’m all for eliminating work that doesn’t add value. That’s simply waste. I agree that much of the work in the health insurance industry is wasteful in that it doesn’t help reduce medical costs and it doesn’t help sick people get healthier. But look, we’re not going to have single worker households as long as people want to own stuff. Contracting the economy won’t change that — it will just make it harder for some families to have even one income generator.
Now I am beginning to wonder about candidate Brown’s attachment to JFK and JFK, Jr. The handsome, rich, famous…is this a wanna be syndrome?
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p>Remember the recent interview remarks about JFK, Jr. and Princess Diana?
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p>Who is advising him?
Elvis
And thats why he is going to lose
Perhaps too slick to be done by Mass GOPers. I think we can assume some “outside” advice and money helped this along.
But you might. On January 20.
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p>I give ya’ll plenty of credit… you’ve caught up to the 1960’s!! Good on you!!!
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p>This changes my plans, though, for 2012… assuming this trend continues there ought to be a lot of pot-smoking and more than my share of free love at the 2012 Republican convention. Maybe even black people! Ought to be fun.
Hey, man, ya shoulda been in Minnesota for 2008…
And I thought he looked pretty ugly as a man
Charles Manson and Mother Theresa
Stalin and Ghandi
Jesus Christ and Satan
Hitler and Churchill
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p>But seriously…
Are you talking about the period during which this country experienced the most explosive economic growth of the last century, accompanied by the emergence of the middle class, or a different 1947 to 1961?
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p>Please don’t promote the conservative trope that conflates the taxation of personal and corporate incomes as if it was the same thing. The accumulation of massive amounts of personal wealth — the return on the investment, not the investment itself — does not produce the same economic stimulus as reinvestment of corporate income, and our failure to address this distinction can be tied to any number of the serious problems this country faces.
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p>If anyone remembers “Fur Coats Don’t Trickle Down”, that’s what that was about.
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p>If a yearly personal income (or increase in personal net worth, if you will) of a billion dollars is not “confiscatory” or “stultifying”, then neither is a 91% tax rate on that income. That money, untaxed, is pulled out of the economy and put in someone’s pocket. Tax revenue on that income is by definition fuel for the economic engine, as government spending on wages, purchasing goods and services from the private sector, etc. is a big chunk of a stable, prosperous economy. Starving that part of the economy in the name of economic stimulus is disingenuous at best, and cynical at worst, a means to an end that benefits only the greedy and short-sighted, otherwise we’d see a clamoring from the right to shift our tax-revenue dependency from corporate income to personal.
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p>Instead of wringing our hands over bank executive bonuses, we could have been in a position to say “Who cares? It means the roads and bridges will finally be repaired.”
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p>That said, Brown’s ad strategy has little to do with tax policy and everything to do with conservatives’ latest gimmick: “FDR good, JFK good, me just like JFK and FDR”.
A return to the tax rates of 1960 would completely destroy our economy. Ignoring the heads of politically favorite wall street executives and movie stars making 100M +. Look instead at the 3.2 Million small business which are “S” corporations. Corporate income in an “S” corporation is realized on the individual return. High marginal rates will put them out of business. While wall street executives or movie star gets paid in cash, a large percentage of the income in a corporation can be in not in cash but in inventory or capital goods. Increase the tax rates these businesses can no longer function or pay their taxes.
We’re talking income (profits), not revenue, right? Why would taxing the profits of a business at a high rate (in the high bracket) kill small S-corps? Other than because Ayn Rand told you, of course.
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p>P.S.
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p>I’ve never heard of a small business relying heavily on the barter system, unless we’re talking organized crime or attorneys in Maycomb, AL.
profit includes increases in inventory, capital equipment and accounts receivable. It’s very easy to make money as a company and have no “cash”. The higher the marginal tax rates go the worse it gets. Companies do have lines of credit to try and support this, but in today’s economic climate they aren’t available or they don’t want to borrow money to pay their taxes. Higher tax rates will force profitable companies to cut inventory and capital investment or go out of business.
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It won’t force them to shrink. If they owned $1M in inventory at the beginning of the FY and $1M at the end, they’ve netted zero increase in inventory — and therefore zero (net) of their profits have been reinvested in inventory.
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p>It won’t force them to cut in absolute terms — only in relative terms. That is, they won’t be able to grow as quickly.
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p>That’s a not insignificant difference.
Correct on the inventory, but say a business is expanding – and the inventory increases 500K – the company would be responsible for taxes on that inventory increase and if we had the 91% tax rate some have advocated, the 500K increase in inventory would result in a tax bill of 455K. So an increase in inventory would require net cash of 500K + 455K. Makes it hard to expand. US corporate rates are also higher than most of the Western World and during the current recession US companies have been cutting inventory like crazy.
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p>Profits also include WIP (work in process) and capital purchases. Surprisingly HVAC equipment has to be depreciated over 29 years. People wonder why business don’t replace old energy inefficent equipment but you have to both purchase the equipment and pay the taxes on the income to purchase it.
But look, I’d buy more inventory for my household if I wasn’t taxed too. Of course, those profits wouldn’t exist if society hadn’t provided the physical, legal, and social infrastructure that the business uses.
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p>Bottom line: your claim that Higher tax rates will force profitable companies to cut inventory and capital investment or go out of business is, as you admit later, wrong. It would force businesses to grow more slowly, but since it’s a tax only on the profits of the business, it can’t shrink the business, only retard growth.
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p>Given that the lifetime of HVAC equipment is 30-50 years (more for pipes and ducts), why is that surprising at all? Why should businesses be allowed to play accounting games and accelerate depreciation?
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p>Strawmen aside, that’s not what I wonder. I wonder why businesses don’t set back their thermostat at night. I wonder why businesses don’t turn off the lights when unused. I wonder why businesses don’t fix leaky faucets. I wonder why, when businesses do invest in infrastructure, that they don’t buy high efficiency infrastructure. And, while some do, most don’t. How do I know? My wife builds commercial interior space for a living, and we talk about this all the time. She’s constantly banging her head against the wall, trying to get the architect to spec higher quality equipment, but the client is worried only about next quarter, not the next quarter century.
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p>I’m just not really sure why you think businesses — which seem to have personhood when convenient — shouldn’t be treated like people when it comes to taxes. I don’t get to deduct the cost of my food, shelter, and transit from my income, thereby paying on profits. I pay taxes on revenue. Businesses only pay tax on profits, and you’re claiming that it’s too big a burden? Sorry, I’m not buying whatever it is you’re selling.
Increase in personal rates will put small S-corp manufacturing (5 to 500 employees) businesses under. Both the Fed’s and the state tax expected income (account receivable), work in process, and increases in inventory – if you don’t have the cash to cover the taxes you have a cash crises and go under. Today’s credit environment doesn’t help either. Even noncollectable receivables are considered income. This is different from your personal returns – where you have received the income.
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p>Large institutions be it government or business are really bad at controlling energy costs. Building codes are also a problem – I know hallways have to be always lighted in large public and private institutions. I’ve worked at both public and private university labs that had broken windows that took months to get taken care of – with heat and cooling going right out the window. Best way to save energy cost – make an individual responsible for them.
Roark, from a purely accounting perspective you’re correct. But the tax code doesn’t have to follow GAAP. Don’t tax money reinvested in the business. Tax money paid out to shareholders.
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p>I’m not a fan of taxes on corporate income per se. A major corporation can make a slim margin on large revenues and still have large enough income to qualify for high taxes, while a small company makes very large margins on low revenue and comes out with low income and therefore low taxes.
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p>This is problematic because working class investors whose retirement funds are tied up in the stock market invest in blue chips. Steady, low-risk, low-return growth is what they need. Rich investors who can afford to take heavy losses and not spend retirement eating cat food can make riskier investments which have higher average returns. So they invest in more startups. By taxing the corporation’s income directly, you penalize the people who can’t afford to invest in anything but blue chip stocks.
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p>The smarter solution is to tax capital gains. Then you avoid the whole issue of what constitutes corporate profit and just tax the money made by the individual as a result of corporate profits, and you put the tax burden on those individuals who actually have high incomes.
I am all for reducing primary taxes on businesses as long as deductions are taken away. Essentially there is a 50% deduction rate on most businesses. When JFK called for reducing taxes across the board he also spoke of eliminating some deductions. If JFK were here today he would not call for more tax reductions, because if you remember back then there were not that many deductions to be had, TODAY there are plenty.
50% deduction on income, not that I know of. Actually I think the tax system has gotten much tighter over the years, there used to be huge deductions you could take – most of these were done away with the tax reform in the Mid 1980’s.
The Brown people have to have known the downside: That the ad might not be persuasive and, indeed, that it might be ridiculed, especially among Coakley supporters. I think their goal was mainly to use it to build name recognition. It is a very short campaign, and Martha is known statewide, while Scott is not. And sure enough, the media bought it during a slow news week. They give him coverage well beyond that of the ad itself.
if so, it was a significant miscalculation IMHO. Fact is, no one other than the political junkies is paying attention to this race between Christmas and New Year’s. By releasing the ad in that time period, Brown got all the free media he was going to get at a time when the people he really needed to reach weren’t paying attention. Much better for him to have waited a week and gotten the free media when it might actually have done some good. Of course, by “good” I mean closing the gap from 40 points to 35. 😉
Maybe he got a deep post-Christmas ad-buy discount!
to link himself to the Kennedy name, and sell himself as an independent (independent of the Democratic dominated Congressional delegation) vote in the hopes of attracting independent votes in the election. Of course, he showed his lack of independence by the fact that he adopted the conservative rhetoric of the national Republican party before the ink was even dry on his declaration for the seat. Now, Mitt Romney is spouting the same line about Brown’s independence, and how his election will be a historic turn from the politics as usual that he believes Congress is controlled by. He forgets to mention that, if anything was politics as usual, it was the Republican majority and Bush administrations of the past decade that we changed from, and electing any Republicans is a return to that.