Max Rains On The Parade

That naysayer. MaxSpeak, via AngryBear (08.09.05):

"There are no tax cuts. Banish that phrase from your mind. You haven't seen any. Republican control of the White House and Congress has yielded trillions in tax increases since January of 2001. How can this be? Simple. When you spend more, and when you pass laws that commit the government to spending more in the future, you increase taxes, sooner or later. Spending not financed by current taxes [as in debt] will be financed by future taxes." GOP Tax Hike Watch

What the hell? Yep. Max tells us where it's gonna come from: Medicare drug benefit. "The cost of this over the indefinite future is $23.5 trillion-with-a-T (of which $18.2T is not matched by any dedicated financing source -- p. 112)." Iraq. "This is not nearly as big, assuming we slink out of there with our tails between our legs before the next election, proclaiming mission accomplished all the while. Approximate dollar cost to the taxpayer would be about $250 billion. The more important human cost is of course beyond ordinary economic calculation." A "capital gains tax increase, otherwise known to morons as 'death tax repeal.' The Estate and Gift Tax termination legislation provides for the taxation of capital gains on assets bequeathed to heirs, when said heirs sell those assets (and 'realize' the gains as income). Under current law, any gains up until the point of transfer are not taxed as income. For most heirs, they are not taxed under the Estate Tax either. Hence the "death tax repeal" is really a tax shift to beneficiaries of smaller estates whose bequests currently fall under the minimum taxable threshold. (More here.)" Here and here too. Non-defense discretionary spending, "in what I call The Era of Hard Work for Limited Government. In keeping with our 'compared to what' stricture above, any assumption about a baseline rate of growth ought to be made explicit. I should stipulate that in general I welcome this sort of spending/tax increase myself. So how big is it? If we grant that this sort of spending 'ordinarily' tracks GDP, then growth in excess of GDP growth should be defined as an increase. Max left out the Alternative Minimum Tax. "The AMT has, however, been very, very good to the Treasury. It is pulling in $18 billion in tax revenue this year, and by 2015 the AMT could be pouring $210 billion annually into the government's coffers. Washington insiders for some time now have been laughing that it would be cheaper for the government to repeal the regular income tax and keep the AMT." Max is pretty crabby right now: "So pay no attention to rumors of tax cuts. To be sure there are rewards for assorted vested interests, as so-called tax cuts grease the skids for heavier taxation of wages in the future." You'll have your chance to be crabby soon enough. "Your invoice will be in your pay envelope." Have a nice day with yourself!