The Eerily Prescient Mr. Brooks

The NY Times is now front-paging the notion that David Brooks floated (as a trial balloon on behalf of the White House?) last week - Obama is considering a re-branding as a champion of tax simplification and reform.

I thought, and think, that the idea is absurd, as explained in my earlier post.  Still, here was Brooks imagining a bold declaration from Obama:

We will extend the Bush rates for everybody for one year, along with unemployment benefits. But during that year we will enact a comprehensive tax reform plan.

“The plan we will work on this year will look a bit like the 1986 reform plan. We will clean out the loopholes. We will take on the special interests. We will lower rates and make the tax code fair.”

So far, so close - the Bush tax cuts are back for two years, but unemployment only for one.  And the payroll tax relief blindsided him.  Over to the current Times:

WASHINGTON — President Obama is considering whether to push early next year for an overhaul of the income tax code to lower rates and raise revenues in what would be his first major effort to begin addressing the long-term growth of the national debt.

While administration officials cautioned on Thursday that no decisions have been made and that any debate in Congress could take years, Mr. Obama has directed his economic team and Treasury Department analysts to review options for closing loopholes and simplifying income taxes for corporations and individuals, though the study of the corporate tax system is farther along, officials said.

The objective is to rid the code of its complex buildup of deductions, credits and exemptions, thereby broadening the base of taxes collected and allowing for lower rates — much like a bipartisan majority on Mr. Obama’s fiscal commission recommended last week in its final blueprint for reducing the debt through 2020.

I quibble with this:

While the overhaul of a quarter century ago raised taxes for many corporations, the legislation was designed to be “deficit neutral” — it neither increased nor reduced the government’s tax collection overall. But people in both parties agree that the next tax-overhaul effort would almost certainly have to raise revenues to address the nation’s growing fiscal problems.

Ahh, well, it is all a matter of baselines.  If Obama had any credibility left and if he was prepared to declare all of the Bush tax cuts DOA when they re-expire in 2012, then it is possible that a tax reform package could be designed that cut revenue relative to the pending higher 2012 baseline.  That is important because reform creates winners and losers, which makes a fight over a zero-sum pie brutal; in a tax cut (or faux-cut) environment where everyone gets something and the fight is over how much, the reform effort has a more stable pulse.  That was an opportunity Bush wasted with his tax cuts, but since they are due to expire in 2012, Obama gets a turn.  As if.

 

 

Comments

[Clarice]

"As if." At the moment he'll be lucky to get to 2012 in one piece.

[daddy]

Just reposting Jim Ryan's link to ">http://wattsupwiththat.com/2010/12/08/shredding-the-climate-consensus-myth-more-than-1000-international-scientists-dissent-over-man-made-global-warming-claims-challenge-un-ipcc-gore/"> Watts Up from the previous thread as I have to go but want to be sure I don't forget to read it later. Looks real good on a quick brush through. Thanks for that Jim.

[narciso]

Deja vu, all over again, no he wasn't particularly prescient in the LUN

[Pofarmer]

We don't have an income problem.

[Alessandro Machi]

Tax simplification, even if revenue neutral, creates more free time for every taxpayer, and this is especially important for small businesses.

[Rick Ballard]

Congressman Ryan is already well advanced on what appears to be a decent plan. The President needn't trouble his pointy, empty head about anything but signing the bill. I certainly hope that the President listens closely to what his House members are saying to him - and that he trusts in their sincerity and makes a point of taking the message to heart.

[Porchlight]

I certainly hope that the President listens closely to what his House members are saying to him - and that he trusts in their sincerity and makes a point of taking the message to heart.

LOL, Rick. I trust you are referring to this?

[LGFED]

He won a nobel for using his devil to get money and power and americans dont mind paying,so what do you think everyones going to do?Stop him from giving away all the noney and see if he abuses you with the devil he serves.

[maryrose]

Someone actually cussing out the president and we don't know who it was?? Sounds intriguing. Now which unbiased reporter is going to track down the culprit? Oh wait it's a dem so we don't have to publicly excoriate him like we did the fine representative Joe from South Carolina. If it's Weiner He gets a pass because he's from New Yawk and they all talk like that.

[bunkerbuster]

Why the insistence on comparing Obama to perfection rather than against previous presidents? It's telling, and predictable, that DoT left this out of his cut-and-paste from the Bloomberg article on Obama's sagging poll support:

``As Reagan approached the end of his second year in office, his numbers were more negative than Obama’s in this survey. In an ABC News/Washington Post poll taken in Oct. 1982, 61 percent of Americans said things were worse and 33 percent said they had improved. Reagan won re-election in a landslide in 1984.''

And at what point does the wingnutosphere at long last abandon its ludicrous shibboleth that the news media are out to help Obama? It's beyond obvious that the news media track polls and tailor the tone of coverage accordingly -- and now it's kick-Obama season for sure. And that makes sense, especially from a business point of view. That's why even people like TM care what papers like NYT and Wapo write, thereby acknowledging just how inert the conservative nattering of joints like the Washington Times and NY Post really is to informed discussion.

[Danube of Thought]

We know going in that Obama will not sign on to anything that is not more redistributive than the current system. This is a man who thinks the current rate structure is unfair because the top 1% of earners only pay 38% of the tax.

[jorgxmckie]

I'd hardly say comparing Obama to Carter is very similar to comparing him to perfection.

Much like bubu, Obama has delusions of adequacy.

[Clarice]

We all know now that O's a peevish, thin-skinned, know nothing punk. Only two years ago Brooks assured us O was a cool , thoughtful guy. After that introduction does anyone any longer think that Brooks has anything useful to say on the subject of O?

[Danube of Thought]

"It's telling, and predictable, that DoT left this out of his cut-and-paste from the Bloomberg article..."

It is neither telling nor predictable unless you think Ronald Reagan has anything to do with the mess this fool Obama has made of the economy. I do not. I know very well the course that GDP growth and the unemployment rate took after the end of Reagan's second year, and I know that Obama has ensured that nothing of the kind will occur in the next two years,

Americans know it too. That is why they now believe they are worse off under Obama.

[Danube of Thought]

""...ludicrous shibboleth that the news media are out to help Obama..."

Shibboleth--what a great, real grown-up pundit word. You're really working hard at this down there in your mom's basement, aren't you Bubu?

Actually, we just say that over 80% of those who populate the news media are Democrats. The rest follows as the night follows the day.

[Neo]

Obama is just now becoming familiar with the first vestiges of bi-partisan negotiation.
Coming from a one party town like Chicago, from what was pretty much a one party state, Obama is just now becoming familiar with the concept of herding cats.

[Danube of Thought]

What experienced Dems discovered this week Is that this lightweight neophyte is a ham-handed, impetuous fool who can easily be rolled.

And they just got rolled along with him.

[Boatbuilder]

The current debate is solely about tax rates, and should be (but isn't) a no- brainer. Has anybody proposed any spending cuts? ANY spending cuts? Isn't that what's really at stake here?
When the political class, the media, and just about everyone involved accept the premise that allowing any sector of the populace to hold on to more of their hard-earned money is a "cost" to the government or a "giveaway" to someone, we have a bigger problem than just tax rates.

[Stephanie]

When the political class, the media, and just about everyone involved accept the premise that allowing any sector of the populace to hold on to more of their hard-earned money is a "cost" to the government or a "giveaway" to someone, we have a bigger problem than just tax rates.

Amen. A teaparty founder was on Cavuto today and schooled him on how to frame the fight.

[Danube of Thought]

Boatbuilder has his finger right on the button.

Historically you can milk about 18% of GDP out of the economy in income tax revenue, and you don't get more no matter what you do with the rates. And historically we have spent about 19% of GDP.

Suddenly we are spending 24% of GDP, and fools are talking about where to get the additional revenue. The answer is, they won't--and we'll either reduce spending or watch the whole 221-year enterprise evaporate before our eyes.

[Comanche Voter]

Heck, Obama said he was always a "Blue Dog" Democrat; if he can believe that of himself, we can believe (with the help of a LOT of adult beverages) that he has been reborn as a Tax Code Simplification Warrior.
We'll hear all about it in the State of the Union where he promises to focus on tax code simplification "like a laser".

Pass the Jack Daniels please, I need some suspension of disbelief.

[tommy mc donnell]

we don't need tax reform. tax reform has only meant one thing, an increase in taxation. we need tax reduction to get money out of the hands of the richest few in the country, the politicans.

[Janet]

Boatbuilder's post at 1:21 is great.

ANY spending cuts?...and I would add a huge cleaning up of the endless regulations that are gumming up the works for business & taking away our freedoms.

[Extraneus]

Has anybody proposed any spending cuts?

I believe Paul Ryan has, and what do ya know...

Sarah Palin has an Op-Ed in the WSJ today endorsing Ryan's Roadmap.

[Captain Hate]

And they just got rolled along with him.

But that's how they roll.

[Captain Hate]

Heck, Obama said he was always a "Blue Dog" Democrat

I think he was referring to the purple lips that he sees in the mirror.

[Janet]

Obama said he was always a "Blue Dog" Democrat

He IS by the WaPo definition. Talk a little centrist jargon, but always vote far left.

[Frederick]

The sad reality for the US is that Barack Obama is just now, for the first time in his young life, pondering how money, free markets, capitalism, currencies, and global capital flows all work.

But, what would one expect from a person who has never had a job other than a life in tax payer funded communtiy service roles, and writing books about his life in such roles?

[bgates]

Barack Obama is just now, for the first time in his young life, pondering how money, free markets, capitalism, currencies, and global capital flows all work.

He's known all about that stuff since he was 19: the idle rich seize control of wealth through exploitation of the poor and the environment and other unsavory activities, unless the educated and virtuous (ie, Ivy League Democrats, or in a word, Himself) can acquire enough power to force them to behave responsibly. Lots of 19-year-olds think this way. Just the one of them is President, though.

[Jane (sit on the couch or save your country)]

President Obama is considering whether to push early next year for an overhaul of the income tax code to lower rates and raise revenues in what would be his first major effort to begin addressing the long-term growth of the national debt.

Taxes do not have anything to do with teh national debt. Spending is what causes the national debt.

Leave things to the adults barry. Book another vacation somewhere. New Zealand is nice this time of year.

[Pagar]

President Obama is exactly what he has been all his life. Obama " basically a Marxist-Leninist"..

The American MSM just fails to report the facts. Inside they report the leftist propaganda word for word.

[Clarice]

Precisely,bgates.

[Janet]

Obama honors Nobel winner with statement about himself

this also caught my eye in Obama's statement - "...and believe that human rights include the dignity that comes with freedom from want."

I'm never sure what "from want" includes for leftists. I believe I'd have ended the sentence... "with freedom".

[Rick Ballard]

Frederick,

Excellent comment but I must take issue with your suggestion that the President has the mental capacity to "ponder". Both Jarrett and Tribe have advanced the idea that the President is "too brilliant" to have the patience required to deal with the details which must be mastered in order to achieve understanding of a subject. I would suggest that "too damned dumb" is more appropriate and that Jarrett and Tribe are both engaged in generating whole cloth insufficient to cover the breadth of the President's mental deficiency. The President 'ponders' at the level of wondering how a thermos knows to keep cold stuff cold and hot stuff hot.

[Specter]

Spending Cuts? Well...now most of the current passel of DemoNcrats think that proposing an 8% increase in spending followed by reducing it to only a 5% increase amounts to a 3% cut in spending. Gotta love the new math....

[Fred Beloit]

"Freedom from want..."?

Surely Obama's speech writer meant "...from need..."
Not even Bill Gates and Warren Buffet are free from want. For example, both of them want me to pay more taxes.

[Pagar]

Nominated for comment of the day.

"The President 'ponders' at the level of wondering how a thermos knows to keep cold stuff cold and hot stuff hot."

There has to be a puppeteer behind him.

[Threadkiller]

"Why the insistence on comparing Obama to perfection rather than against previous presidents?

I wonder who set that bar for Obama?

"I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on earth."

[NK]

bgates/rick ballard provide a scary accurate summary of BarryO. he is the self-absorbed, affirmative action beneficiary 19 yo president of some Ivy student government organization, who knows knowing and cares to learn nothing. A shallow leftist because it's cool to be a lefty, but without conviction or substance. That's it, there's nothing more. Bright enough-- but no genius- and well spoken but very glib. he takes affirmative action not because he needs it, but because it's the easiest path. BuBu-- love ya man. You are big time into the cult of personality-- you remind me of the Evita lyrics, one of the crowd outside the casa rosada crying "Barry Peron-- I mean O". Keep it up guy.

[Bill in AZ sez it's time for Zero to resign]

"The President 'ponders' at the level of wondering how a thermos knows to keep cold stuff cold and hot stuff hot."

dammit - there goes another keyboard

[Clarice]

Rick can do that to you.

[bunkerbuster]

DoT invents: ``Historically you can milk about 18% of GDP out of the economy in income tax revenue, and you don't get more no matter what you do with the rates. And historically we have spent about 19% of GDP. Suddenly we are spending 24% of GDP, and fools are talking about where to get the additional revenue.''

Taxes have accounted for more than 20 percent of GDP for most of the past decade. OECD figures from for 1998-2007 show not only that the rate is higher than DoTs assertion, but also substantially below most other wealthy countries and below the average. The higher tax nations that have indeed not disappeared in the least as DoT suggests America will if we merely make people actually pay for the wars they demand, rather than borrowing the money to pay for them.

OECD numbers:
United States 25.6% 25.6 27.3 27.9 29.9 26.1 27.3 28.0 28.3
Japan 20.9 27.4 29.1 26.8 27.0 26.3 27.4 27.9 n.a
New Zealand 28.5 31.1 37.4 36.6 33.6 35.3 37.5 36.7 36.0
Austria 36.7 40.9 39.6 41.2 42.6 42.8 42.1 41.7 41.9
Denmark 38.4 46.1 46.5 48.8 49.4 49.0 50.7 49.1 48.9
France 35.4 42.8 42.0 42.9 44.4 43.5 43.9 44.2 43.6
Germany
34.3 36.1 34.8 37.2 37.2 34.8 34.8 35.6 36.2
Greece 19.4 25.5 26.2 28.9 34.1 31.2 31.3 31.3 n.a.
Unweighted average:
OECD Total 29.4 32.7 33.8 34.8 36.1 35.2 35.8 35.9 n.a

Though I certainly agree that the discussion should focus on spending, not taxes. The level of taxation should be based on the amount of spending, with only small adjustments for stimulus when necessary.
Trouble is that without promises of tax cuts and fear of foreigners the GOP has zero, zilch, nada to talk about.

[Specter]

Well...check conflicting data here (Project America) and here (Reuters). There are more...nice of you to only present the one (out of many) that supports your point of view. The ones I linked to seem to compare favorably with each other and with DoT's post. They do not match at all with your data.

Gee...googling is fun.

[DrJ]

DoT was talking about federal income taxes only. He's right in his assertion.

[MayBee]

We will lower rates and make the tax code fair

The word "fair" sends shivers down my spine. When it comes to government, it never means what I think it should mean.

[NK]

BuBu-- you contradict yourself; you claim focus on spending but Harry/Nancy/Barry have boosted spending to 24+% of GDP from the historic 19-21%. The voters hate the grotesque Dem spending orgy, the WashDC regulatory state and the resulting debt bomb. The Dems havve so crippled themselves that repubs only have to prove they are not Dems and they will win several election cycles. I am watching, will the repubs cut actual spending and propose budgets of no more than 21% GDP? we'll see. Once spending is under control and at 20% GDP a nonconfiscatory fed tax regime can be structured with modest operating deficits of 1-3% GDP. rational skeptics watch what pols actually do, in contrast BuBu, your Dem fetish is showing again.

[andycanuck]

World to end tomorrow. Pants-pressers hardest hit.

[bunkerbuster]

Just like DoT left out the part showing Reagan’s popularity was less than Obama’s at the same point in their careers, Sap leaves out this from the Reuters chart he links:

``• Federal taxes are the lowest in 60 years, which gives you a pretty good idea of why America’s long-term debt ratios are a big problem. If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke.
``• Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
``• Employment taxes, by contrast—the regressive bit of the fiscal structure—are bearing a large and increasing share of the brunt. Any time that somebody starts complaining about how the poor don’t pay income tax, point them to this chart. Income taxes are just one part of the pie, and everybody with a job pays employment taxes.
``• There aren’t any wealth taxes, but the closest thing we’ve got—estate and gift taxes—have shrunk to zero, after contributing a non-negligible amount to the public fisc in earlier decades.''

DoT’s assertion that ``you don't get more no matter what you do with the rates’’ is pure buncombe and the OECD figures demonstrate that conclusively.
Germany, Denmark and most other wealthy countries take higher percentages of GDP in taxes and they have higher rates.
Still more tellingly, the OECD and other figures demonstrate that pushing up the portion of GDP taken by taxes doesn’t necessarily diminish economic growth. Of course, DoT’s assertion supports the same point (no link between tax bite and growth), albeit unwittingly.

[bunkerbuster]

"Sap" should be "Specter". Sorry about that, no aspersion intended.

[Cecil Turner]

The level of taxation should be based on the amount of spending, with only small adjustments for stimulus when necessary.

Hey, I've got a great idea: let's raise taxes to 100% of GDP and see how it works. Notice there might be a teensy little factor your analysis neglected? Care to try again?

"If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke."

Great. Have your Dem allies raise taxes (in a recession) and see how it works out. Note also the tax rates haven't changed in years. So the implied position here is to raise rates during every recession. Better check with your pal Krugman on this one, as well.

[bunkerbuster]

Cecil: or suppose we cut them to zero. Reductionism works at least two ways. Too bad you're either too slow, or too spun to pick that up...

Spin all you want, Cecil, but the choice isn't between raising or cutting taxes, it's between raising taxes or increasing borrowing. To the extent you insist taxes cannot be raised, you should be ready with a plan to increase borrowing, because the money is already spent on military misadventures, Medicare and Social Security. Sure, we could always eliminate public education or make people pay the fire department on the spot in cash or watch their house burn down, but even then, we'd still have a rather large tax burden to pay for the real money involved in the military, Medicare and Social Security.
The only meaningful debate is over whether it's better to borrow the money or raise tax revenue and, then, over who should pay more taxes: the middle class or the wealthy.
As long as the Democrats allow Republicans to offer voter the false choice of raising taxes or lowering them, we're doomed fiscally, as Felix Salmon points out in the Reuters article...

[Cecil Turner]

Reductionism works at least two ways.

"At least"? How about "exactly"? Looks to me like you've finally twigged to the fact that spending isn't the only variable, but you understandably don't want to admit it.

Spin all you want, Cecil, but the choice isn't between raising or cutting taxes, it's between raising taxes or increasing borrowing.

Okay, for extra points, which variable did you leave out of this little micro-analysis? (Hint: you were talking about it earlier.)

[Cecil Turner]

. . . we'd still have a rather large tax burden to pay for the real money involved in the military, Medicare and Social Security.

And do we have an unwarranted assumption here? Note the extrapolation of that "mandatory spending" over the next few decades:Note also that this graph is out of date (and ridiculously optimistic). See a teensy little problem?

[bunkerbuster]

Too cryptic, Cecil. I don't know what you're trying to say.
If it's that interest expenses are skyrocketing, well, that's just another reason cutting taxes isn't a rational option.
And if you acknowledge that tax cuts are simply not sane, you leave the Republicans with no economic policy to talk about...