Wednesday, July 30, 2008

Just fucking stupid

Obama's economic plans: just say no (to much of it):

I hear disquieting rumors that Obama is not just saying he wants to revisit NAFTA in order to pick up a few votes--apparently he is really serious about this. Nor is his support for letting employees bully their coworkers into joining unions exactly putting a spring in my step and a song in my heart.
Fuck you.
As if those things weren't enough, he wants to raise the capital gains tax. There is a reason that most companies tax capital lightly--actually several reasons. The first is that capital is mobile, and the second is that capital means new investment, which gives us shiny new things we like, such as fMRI machines and electric cars and yes, iPhones. Savings represents a tradeoff between current and future consumption. Given that peoples' time preferences are biased towards the present, we want to make the payoff to deferring consumption as attractive as possible.
Obama wants to make her pay her fair share. He's a Nazi.
Equity capital is taxed twice in this country--once when the company makes a profit, and a second time when the capital is distributed to its owners as dividends or capital gains. The combined rate is 15% + 35%=50%, or a whole lot higher than the personal income tax rate. This is not optimal for savings.
Fuck you.
Ah, you will say, but corporations actually spend an enormous amount of time structuring their income to avoid taxes, so the rates aren't that high. But this is an equally big problem. All of that activity is an economic loss--it consumes resources that could be put towards something useful, like erasing all traces of the Neil Diamond box set from the face of the planet.
If we didn't force corporations to try to avoid paying their taxes, they could be slightly more productive, so don't tax them. The sheer stupidity of this argument is offensive even without the logo on the top of the webpage it appears on.
I know what you are thinking, my little chickadees--the corporations shouldn't do that. And perhaps you are right. But when you set up systems that cost people a great deal of money, they will go and try to minimize their tax bill, no matter how earnestly you explain that they are shirkng their social duty. And there is no government failure more dismal and glaring than the eternal attempts to "close the loopholes" in the corporate income tax. That's because most of the loopholes are actually there to alleviate valid concerns. Moreover, attempts to "close the loopholes" end up making the tax code vastly more complicated, which increases compliance expense, administrative expense, and uncertainty--and in many cases, actually create more loopholes than they closed.
None of these problems are by the design of corporate lobbyists to frustrate the intent of the system.
Worst of all, the corporate income tax and the capital gains tax aren't really very good at doing what they are supposed to do, which is make sure that the bulk of our income tax burden falls on those who will miss the money the least. Let me posit something which isn't very controversial among tax professors no matter what their political party: you can't tax a corporation. That's because corporations have no feelings, and no assets, of their own. Ultimately, the money always comes from some person: customers, employees, owners, or even suppliers. But the corporate taxes are not targeted by need; they come from whoever the corporation can best squeeze the money out of. The old lady in Dubuque with 100 shares of AT&T pays the same 50% rate on corporate profits as Warren Buffett.
I know I'm quoting big chunks, but I want you, dear reader, to feel assured I'm not unfairly representing Megan's offensive stupidity. She's now claiming the tax burden causes corporations to seek to screw over their own investors, particularly the smallest of them, as part of an argument against taxing corporations. Don't punish or kill, say, a lion that's begun preying on humans, blame nature for making the lion hungry and spray napalm all over the place. She keeps going on, but I can't. Still, there's this.
But the trade and capital gains components are bad enough to make me take a long, loving look at Bob Barr.
Megan had to support Obama over Hillary, but her heart was never in it. She wanted Hillary to suffer for.... petty personal reasons that don't rise to the level of legitimate grievances, but she could never support a candidate who's only partially in the pocket of large money interests for long. Can't the highest paid CEO just be President?

3 comments:

Dhalgren said...

Awesome post! Best in weeks. Megan has made us angry once again.

spencer said...

I know what you are thinking, my little chickadees

This is Exhibit A of why I hate her writing so fucking much.

clever pseudonym said...

Spencer,
Exhibit A? I'm already down to Exhibit ZZZ. "My little chickadees." Crap, Megan, Atlantic readers are not your bloody pets. That is not a term of endearment. It is flat out RUDE condescension.