1-I think the U.S. needs a balanced budget over the economic cycle. I’m willing for some Keynesian interventions so that there are deficits in recessions and surpluses in recoveries, but at the end of the cycle, we need a balanced budget.
A balanced budget is not a panacea, nor, as the boom years of the 80s and the advancing economy of the next decade show, necessary to economic growth and prosperity. I don't have time to go into it right now, but its a bit more complex that that. And, in case you didn't know it, Keynesian economics has been long discredited as a practical economic theory. If you want to know what happens the morning after Keynesian demand side deficit spending (which I thought you were against) and monetary manipulation, I give you the seventies (especially the late seventies).
2- I believe in a progressive tax structure. This is for a couple of reasons. First, as Tarski explained in another thread, there is a diminishing marginal utility of wealth. Thus, maximizing the utility of society as a whole entails having those who have much more than they need pay a little bit larger share. Second, quoting Obama, those of us who have benefited most from this new economy can best afford to shoulder the obligation of ensuring every American child has a chance for that same success..
The statements in boldface give the whole game away at the outset.
1. Who, pray tell me, decides, and upon what criteria, what any individual needs?
2, The idea that the state controlling more of the wealth generated in the private sector somehow maximizes the utility of society (whatever that actually means) is a baseless assertion that is both socially and historically suspect on its face. There is every reason to believe that the more the state attempts to "maximize the utility of society", the worse the economic, social, and political pathologies within society and the economy become, and the more destructive unforeseen side effects proliferate. This claim also implies that the maximization of social utility is, for some unknown reason, best brought about by the state and not by the individuals who comprise the society itself seeking what is best for themselves, their families, and their communities.
The bottom line here is that the progressive income tax is an idea of Marx and Engles and can be found in the Communist Manifesto, not in the Constitution. The reason is simple: progressivity is purely a punitive measure designed to return the workers alienated labor to him by force. It has nothing to do with economic rationality nor with morality as normatively understood by morally mature human beings. A simple, fair, and low flat tax would have the federal government rolling in dough all the same, but it would not set the classes off from each other in an ideological adversarial conflict that could be manipulated by the political class for their own advantage, and therein, as Analytics and Tarski's comments demonstrate, lies the real meaning and value to them of the progressive tax system.
There is no economic or moral justification for anything other than a fair flat tax that taxes everyone at the same rate based upon ability to pay. Progressivity is grounded in class envy, and hence, as one's income goes up, one's marginal rates of taxation go up. Why? Why, because of all that income
you don't really need, of course.
My how the masks come off in an election year.
3- I believe talking about tax breaks per se is the wrong conversation. What the conversation should be about is coming up with and refining a tax structure that allows the government to balance its budget in a way that is as fair as possible.
Why not cut taxes
and cut government spending, thus balancing the budget and unleashing the productive capacity of the American people, thus creating new wealth in the private economy and raising government revenues within the context of a smaller, less active and intrusive federal government. Let's, in other words,
balance the budget on the back of the federal government, not on the people, while letting the people create, spend, and invest more of their own money.
Perish the thought...