Friday, October 22, 2010

Dishonest Tax Discussion

Lawrence O’Donnell conducted a discussion on balancing the federal budget on his show The Last Word last night and, after criticizing current politicians for being unable to talk openly and honestly about the topic, he hosted as thoroughly an incoherent and dishonest discussion as I have ever heard held on any topic. Sorry, no link to it. His show is not online.

They started by saying that we should cut $300 billion from the defense budget and lost credibility with me right there. If they were serious about balancing the budget that number should have been far larger. While our defense budget is only $700 billion, all told we spend almost $1 trillion on defense, nearly ten times what is expended by the world’s next largest spender, and you cannot convince me that 70% of that is actually needed.

O’Donnell then disingenuously said, “We were not mandated to fix Social Security, but…” and they proceeded to include Social Security in the discussion of balancing the federal budget. They made statements such as, “We cannot get a grip of the federal deficit without fixing Social Security," and that at some point “Social Security, Medicare and payment on interest on the debt will consume 100% of federal revenue.” Both of these statements are utterly false, and O’Donnell did not challenge either the statements or the premise behind them.

Social Security is a self-funded program, funding for which is provided by payroll deduction separate from the federal revenue stream and held in a trust fund dedicated to paying benefits to participants in that program. It may indeed need some adjustment, but that is a conversation entirely separate from the federal deficit, and anyone conflating the two either does not know what he is talking about or is lying through his teeth.

These fatheads even made reference to the self-funded nature of Social Security, and then returned to the falsity of discussion by saying that we needed to assure foreign investors that we had “gotten control of our federal spending, including Social Security, Medicare and defense.”

They made much of the fact that they had left the Bush tax cuts in place, including the ones for the upper income brackets, and that they had therefor “not raised taxes,” and then casually mentioned that their program included health care benefits from employers as taxable income. News flash; that is a tax increase, and quite a large one. Not only is it an increase, but the burden of it falls far more heavily on lower tax brackets than on the wealthy, because everyone pays the same amount for health care benefits, and so it is a far smaller percentage for the wealthy.

One of the fatheads even bragged that the feature “brings in huge amounts to reduce the cost of health care.” The fact that it “brings in huge amounts” is evidence that it is a significant tax increase, and it does not “reduce the cost of health care.” Raising money to pay for something does not reduce the cost of it, it merely pays that high cost.

They also added a $1/gal tax on gasoline because of the belief that a “consumption tax is far less destructive to the economy than a tax on income.” Where did this idiot park his brain? We are, supposedly, trying to get consumers to buy more goods and services, and you believe that taxing those purchases is “less destructive to the economy” than a progressive income tax? Really? What planet do you live on?

They agreed that raising taxes in a recession was a bad idea so they didn’t raise taxes, except on income that consists of health care benefits, and on consumption that consists of driving to work and to the store to buy things.

They did note that some things don’t take effect until 2013. Why? Because, “We hope that the economy will have recovered by then.” I have a plan for you. Hold out both hands. Have your dog crap in one hand and hope like crazy in the other and see which one fills up first.

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