No tax increases
Jim Pinkerton writes that President Bush is considering raising taxes. I doubt this is the case and Bush was most likely only indicating that he is willing to listen to all ideas, which is a reasonable response. Nevertheless, if Bush caves to a tax increase, I will be pissed. Bush has done a good job with judges, on fighting terrorism, and on taxes. In my opinion, these successes make a great legacy despite the increased spending (which was the Congress' fault, not Bush's. While tax increases may be supported by the likes of Federal Farmer and the other psuedo conservative-paleocons here who all want to see Bush go down in flames, that should be signal enough that tax increases are a very bad idea....
posted by Sloanasaurus | 12/21/2006 08:53:00 AM
I had not read that article, but I have read that he would consider support for an increase in the minimum wage if that was accompanied by adjustments (presumably downward) in the tax code to protect small businesses.
I seem to recall that one of our esteemed economist members, Harsh Pencil, was in favor of increasing the minimum wage (well, I guess it was really more "it's inevitable under this political environment, so why fight it"), as long as it was done once and indexed to inflation to take it off the table. I'm sure he'll weigh in to correct me on my interpretation of his comments.
While I see an increase in the minimum wage as yet another indirect tax, were Bush to get a proposal to increase it but tie to inflation, it's probably a worthwhile tradeoff. However, I don't see that as a reasonable possibility. The Democrats want to dredge this issue up regularly to cater to that "we're just helping the poor, the women, the kids" instinct in most of us, and I don't see them agreeing to such a proposal.
Hold on Less. There is little or no evidence that deficit spending causes inflation. Inflation is caused by printing too much money. Yes, sometimes governments print money to cover their deficits, but this does not have to happen and in developed countries, usually doesn't happen.
Actually, spending itself is the real tax. That is, governments are, in this sense, no different than you or me. Every bit they spend has to be paid for in a present value sense. (The present value of expenditures plus current debt has to equal the present value of revenues in.) It's just a matter of pay for it now, or pay for it later.
You mean government cannot spend money that it does not first take from the citizens? That's odd. When asked, in a Federal Reserve study of economic knowledge, 2/3 of adults replied that government spent "its own money" and didn't have to take it from anybody.
J. Ewing
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