HobbsOnline

Steaming hot commentary on journalism, Tennessee, politics, economics, the war and more...

Name:
Location: Nashville, Tennessee, United States

10/23/2003

A General's Theory of Economics
Wesley Clark has outlined the basic principles of what would be his economic policies if he's actually elected president. From a Reuters story:

Clark outlined only principles of his economic policy and promised more specifics as the campaign unfolded. But he said he could achieve federal budget savings of $2.35 trillion within 10 years, about half of which would come by repealing tax cuts to the wealthiest Americans.
Clark proposed scrapping tax cuts for families earning more than $200,000 a year, a move he said would save $1.1 trillion between 2006 and 2015. He also said he would change the tax code to make it "simpler, fairer, more progressive and pro-growth."
A few thoughts...

One: it is bizarre, stupid and, frankly, deceptive to describe a $1.1 trillion tax increase as a "federal budget savings." You do not create a "budget savings" by giving the government MORE money to spend. You spend less.

Two: higher taxes are not pro-growth. Lower taxes are. That's why the economy is rebounding.

Three: Clark wants to make the tax code "more progressive." Well. Taxpayers in the top half of earners based on adjusted gross income in 2001 paid 86.2 percent of all income taxes. Folks in the bottom half paid 13.8 percent of all income taxes. It's going to be hard to make that much more "progressive" unless you merely adjust the tax rates so as to exempt millions of people on the bottom of the income chart from paying any income taxes at all. Oh. Wait. Bush already did that. The Jobs and Growth Act of 2003, signed into law by Bush on May 28 of this year, completely eliminated the income tax liability for three million individuals and families, making the tax code more progressive.