Posted by
rycK on Friday, August 22, 2008 11:48:11 AM
Krugman Remumbles and Massages the Numbers on Socialized Medicine: Raise Taxes, as usual.
Our famous non-economist, Paul Krugman[1] of the New York Times--aka the Walter Duranty Papers[2] --has a history of number shuffling where he advances the counterfeit theory of mixing apples, oranges and other fruits. He is an ardent tax hike artist and cannot manage to offer a coherent discussion on growth and taxation in his many articles and books. He is frequently excitable.[3] He may be the Tax Hike Zombie, a mirror image of what he thinks about the capitalists. [4]
In today’s episode from the Old Gray Lady, we read the following:
“Last weekend, Pastor Rick Warren asked both presidential candidates to define the income at which “you move from middle class to rich.” The context of the question was, of course, the difference in the candidates’ tax policies. Barack Obama wants to put tax rates on higher-income Americans more or less back to what they were under Bill Clinton; John McCain, who was against the Bush tax cuts before he was for them, says that means raising taxes on the middle class. ”[5] --Now That’s Rich By Paul Krugman Op-Ed Columnist Published: August 22, 2008-- [Emphasis is mine in all quotes. This link references all quotes in this essay unless otherwise noted. ]
This is a politically and emotionally loaded paragraph where the notions of rich, middle class and even taxation need to be defined. We must also note that Social Security is ‘off-budget’ a FDR euphemism that allowed the tax burden to remain somewhat undefined. We shall see if any firm numbers are present in this screed. The Devil is in the Details and an analysis of the numbers always embarrasses and undermines the tax agenda of the left. Let us search for reality in this tautological essay on high taxes.
“Mr. Obama answered the question seriously, defining middle class as meaning an income below $150,000. Mr. McCain, at first, made it into a joke, saying “how about $5 million?” Then he declared that it didn’t matter because he wouldn’t raise anyone’s taxes. That wasn’t just an evasion, it was a falsehood: Mr. McCain’s health care plan, by limiting the deductibility of employer-paid insurance premiums, would effectively raise taxes on a number of people.”
Here, the word tax starts to lose its definition. The numbers float around as Hillary and company seemed to want to tax those, firstly, with incomes above $250,000 and then dropped this to $200,000. We now wonder what middle class income might be.
As long as we are on socialized medicine, it is important to share some numbers with the readers here: If there are 47,000,000 people who ‘cannot afford health care insurance’ or have no coverage, a misnomer because everybody in the US, illegal or not, has access to health care whether they can pay for it or not. Let us take this a step at a time so Krugman can keep up:
[1] 47,000,000 people who cannot pay for HC means a ‘tax bill’ for somebody in the Western Hemisphere of 47 bln if we spend only $1000 per person per year.
[2] If we must spend $10,000 on each person, the tax rises to 10x this number or the huge number of 470 billion dollars.
[3] Now, we know the druggies, felons, illegal aliens, loafers and such will not pay anything since they can trade their votes [yes even illegal aliens in Californian and other third world ensembles] so, strangely, this burden must be paid by somebody.
[4] “Total spending was $2.3 TRILLION in 2007, or $7600 per person.1 Total health care spending represented 16 percent of the gross domestic product (GDP).”[6]
[5] We might just look at who pays what in terms of taxes. The latest from 2006 is this:
For Tax Year 2006
|
Percentiles Ranked by AGI
|
AGI Threshold on Percentiles
|
Percentage of Federal Personal Income Tax Paid
|
|
Top 1%
|
$388,806
|
39.89
|
|
Top 5%
|
$153,542
|
60.14
|
|
Top 10%
|
$108,904
|
70.79
|
|
Top 25%
|
$64,702
|
86.27
|
|
Top 50%
|
$31,987
|
97.01
|
|
Bottom 50%
|
<$31,987
|
2.99
|
|
Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service http://www.ntu.org/main/page.php?PageID=6
|
[6] The Federal budget for 2007 was $2730 billion. [7] The current deficit is 480 bln dollars.
[7] There are about 130 million workers. The debt is 10 bln and the debt service is 406 billion.[8]
So, where does all this go?
We currently spend about $7600 per person [item 4] so 47 million [from item 1] x $7600 works out to new taxes of $357 billion. This is $633 per month.
We cannot stop there as this will be a federal program [like the Great Society, HUD, War on Poverty, Amtrak, DOD, Social Security and other failures] so it will cost 20% more just because of the incompetents they must hire to run this wreckage. That means almost $500 billion dollars in extra taxes. Each new billion in taxes and or spending is about 8$ per worker.
Now, let us see what Krugman gives us:
“Mr. McCain wants to preserve almost all the Bush tax cuts, and add to them by cutting taxes on corporations. Mr. Obama wants to roll back the high-end Bush tax cuts — the cuts in tax rates on the top two income brackets and the cuts in tax rates on income from dividends and capital gains — and use some of that money to reduce taxes lower down the scale.
According to estimates prepared by the nonpartisan TaxPolicyCenter, those Obama tax increases would fall overwhelmingly on people with incomes of more than $200,000 a year. Are such people rich? Well, maybe not: some of those Mr. Obama proposes taxing are only denizens of lower Richistan, although the really big tax increases would fall on upper Richistan. But one thing’s for sure: Mr. Obama isn’t planning to raise taxes on the middle class, by any reasonable definition — even that of the Bush administration.”
This is a political answer. Where are the numbers, growth, energy costs and other factors? What is the effect of high gas prices on the ‘poor’ and those others who are not ‘rich?’ Krugman will not concede that tax cuts produce economic growth. It they did, their socialist themes would rot in place for all to see.
From the table in Item [5] above we find that that top 5% have an income cutoff of about $150, 000. Many of these are small business types who provide the new jobs in our economy.
“Of course, all the evidence in the world won’t stop Republicans from claiming, as they always do, that Democrats are going to impose a crippling tax burden on ordinary hard-working Americans. But it just ain’t so.”
Here are the facts as I see them:
[a] We are looking at higher taxes and a call to tax those who invest in our future. Somebody has to put up nearly $500 bln in new health care costs paid for by new taxes.
[b] We are asked to pay much higher prices for gasoline and electricity and gas along with the taxes on that commodity.
[c] The liberals and their Marxist allies are against growth. [9] They want the cost of energy to soar because of some phony Global Warming ah……….Climate Change nostrum that is a world wide tax. [10]They prevent nuclear power plants, off shore drilling and new refineries from being built. Growt means higher tax revenues al ala Reagan. Is it true that the left do not want growth? I think so if we read stuff by Kenneth Rogoff. [11]
Now, it is arithmetically possible to just shift the entire tax burden to the top 2% and force them to pay for everything in the US with money to spare. The difficulty with this Marxist nostrum is that they are the ones who can just pick up their wealth and transfer it to Dubai or Singapore or elsewhere. They can also just stop earnings and put their money in tax free bonds and other investments.
The lefties forget the Jimmy Carter era where high taxes caused malaise, stagflation and worse. Overspending by liberals in such economic latrines as California[12], New York, New Jersey and Michigan has brought these Blue States to the edge of the Financial Snake Pit and bankruptcy is certain for half of these within the next two years.
There is no useful information in this NYT article. The op-eddies of the Old Gray Lady labor under the banner of Marxism and have only a psychotic dread of capitalism. This is justified as the capitalist juggernaut crushed the far left and their phony economics. I often advise people to hug a Commie and thank him for being so stupid. [13]The low and middle class are expected, in this phony article, to escape the new and higher taxes because they are convinced that only ‘the rich’ will pay for their new goodies. What is missing is:
The rich will pass down higher taxes as costs of doing business and the ‘poor’ and middle class will pay for that PLUS an inefficiency factor caused by the government. That tax hike goes directly to the middle class. Those ‘rich’ who must shift priorities to get around the oppressive tax hikes will lay off the middle class people and search for new business adventures while avoiding, unions and other government taxes and fees and regulations, which means a net loss of jobs. That will then lower the tax revenues. What do we do then? OH! Raise taxes.
The folk at the NYT are left-liberal tax whores who can think of nothing other than defeating capitalism. The people who mistakenly vote for their leftist political choices will suffer higher prices, higher unemployment and will pay the higher taxes imbedded in the higher prices of their corporate goods and services.
Yes, the voters really are that stupid. They are almost as stupid as the Europeans. [14]The NYT takes advantage of the mentally disnimble and will screw them with the dual phony notions of fairness and taxing the rich.
Wanna vote dumb? Vote Democrat.
Wanna pay higher prices in stead of higher ‘taxes?’ Vote Democrat.
Take a peek at what California has become under the influence of drugs, sloth, sodomy and higher taxes. That is what the liberals offer. Ich bin ein ex-Kalifornikan.
rycK
Comments to: ryckki@gmail.com
[2] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.
[4] The Tax-Cut Zombies By PAUL KRUGMAN Op-Ed Columnist Published: December 23, 2005. http://select.nytimes.com/2005/12/23/opinion/23krugman.html?hp