Eliminate all taxes? Ah, but here’s the rub

There’d be no room for graft for political favoritism

Anyway, toward the end of today’s article Laffer has a stunning proposal:

Any government program that would reduce unemployment has to make working more attractive for both employer and employee. Since late 2007 the federal government has spent somewhere around $3.6 trillion to stimulate the economy. That is a lot of money.

My suggestion would have been to take all $3.6 trillion and declare a federal tax holiday for 18 months. No income tax, no corporate profits tax, no capital gains tax, no estate tax, no payroll tax (FICA) either employee or employer, no Medicare or Medicaid taxes, no federal excise taxes, no tariffs, no federal taxes at all, which would have reduced federal revenues by $2.4 trillion annually. Can you imagine where employment would be today? How does a 2.5% unemployment rate sound?

It’s a valid point.

Yes, it is. In fact, it makes perfect sense. However, there’s no room for “income redistribution,” graft, rewarding political allies and punishing political enemies, or increasing the power and control of the federal government in it. Therefore there is no chance in hell of it ever happening, certainly not under any Socialist Democrat administration, and especially not under the Obamarxist administration.

Sadly, not under a GOP administration, either.


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13 responses to “Eliminate all taxes? Ah, but here’s the rub

  1. Anonymous

    not a serious idea, not a good idea. investment activities, including the hiring decision, depend on a view of a predictable future with laws favorable to earning rewards on invested capital. a short tax holiday gives lots of current cash to investors, but they already have trillions, sitting on the sidelines because of the future they see with the current clowns running washington. what is needed is a new economic structure of lower taxes and lower government spending. but lower government spending means, mostly, cutting salaries and benefits for government workers, the bedrock supporters of the washington crew.

  2. Anonymous

    Anonymous is back with his (her?) usual smug tone whereby he (she?) assumes he knows everything in the world and everyone else is a small little fool.

    But of course it’s just idiotic to say something like, “Lower government spending means, mostly, cutting salaries and benefits for government workers…” Hmm, how do you say this? No.

    If you think we are in the fiscal mess we’re in right now because of government salaries, you simply have not even an elementary understanding of how the economy, government spending and revenue or fiscal and monetary policy works. Not even the slightest clue. You could stop paying every government worker tomorrow and for the next 10 years — cut their salaries to zero, make them all volunteer — and you’d still have the same long-term fiscal nightmare.

    Our long-term debt is driven by the costs of Medicare and Medicaid, which in turn is driven by the out-of-control rising cost of healthcare.

    Anonymous is wrong.

  3. Bill Clark

    Chris, speaking of taxes, this from the comment section in an earlier post:

    “pulled up in OG

    July 8, 2010 at 10:52 am
    Where’s Laudonia, at the Griff?
    Notice to pay taxes in today’s paper.

    “Tax bills are mailed no later than June 30, 2010.”

    Anyone else not get one yet?”


    No one has apparently received a tax bill yet, which raises the question of whether the August 1 due date is enforceable with less than 30 days from the date of mailing (whenver that may occur).

    Your opinion?

  4. DebtVulture

    Medicare and Medicaid? Really….just fix these two items and everything will be okay? Wow! That is a shocking revelation. I am pretty relieved now because I originally thought that maybe our current account and trade deficit, the mess with Social Security, the trillions of dollars of liabilities at FNM and FRE that should be on the government balance sheet, the lack of job growth due to the lack of competitiveness vs China and other cheap labor countries, the underfunded pensions of state, local, and federal workers, the constant loose monetary policies that have created bubble after bubble, etc. all had something to do with the mess we are in. Glad you got me all straightened out anonymous #2.

  5. Anonymous

    anon 11:28 is myopic, looking only at federal spending, which has lots and lots of transfer payments. look at state and local spending … schools, firemen, cops, garbage collectors, and most, overwhelmingly, is for labor costs… those now working and those who have never worked. but much of medicare and medicade is used to pay costs at government hospitals. me thinks anon 11:28 is a gov’t worker.

  6. pulled up in OG

    @ Bill Clark – Last line of the notice:

    “Failure to receive a bill does not excuse the penalties and interest due when payment is made late.”

  7. So how are we to know how much to pay? Do we all just show up with blank checks in hand? Something is seriously wrong here. Where’s our First Selectman when we could use him?

  8. I believe the cycle works this way:

    Oct 1 prior year – assessment snapshot valuation

    March current year – assessment appeals

    May final budget and mill rate determination

    June 30 tax billing

    July 1 New fiscal year and taxes due. Residential taxes payable in two installments.

    Jan 1. following year. Second residential installment due and payable.

    The Town has followed a policy of 3% growth, so your new bill in July is a product of the approved budget divided by the valuation of the grand list (or re-valuation at 5 year intervals) with adjustments of new construction, appeals, etc.

    Therefore, in general, your July 1 bill should be 3% greater than last January’s bill.

    My efforts earlier this year at http://earthimage.net/GR-Tax_Structure/GR-Tax-Structure.htm
    were to demonstrate a possible bias in assessment method by zone. A closer analysis showed weak evidence of social bias against the smaller lots, but a systematic high variance in appraisal to sales ratio.

    This means your tax bill is a crap shoot for fairness.

    If you’re the tax collector, you don’t need to know any of this. Just mail bills and deposit the checks.

    Is that worth $100K per year?

  9. pulled up in OG

    Chris – Last January’s bill was 2nd half payment.
    This one should reflect a new mil rate.