mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Monday, October 11, 2004

Guess Kerry needs to do some reading...

Mark Styrn has another excellent article about Kerry. He does a great job of poking fun at Kerry's debate comment that Hussain would "not necessarily" be in power:

That's John Kerry: the "not necessarily" candidate. Saddam might not necessarily be in power. He might have been hit by the Number 37 bus while crossing the street at the intersection of Saddam Hussein Boulevard and Saddam Hussein Parkway in downtown Tikrit. He might have put his back out with one of his more vigorous concubines and been forced to hand over to Uday or Qusay. He might have stiffed Chirac in some backdoor deal and been taken out by some anthrax-laced Quality Street planted by an elite French commando unit.

But he also makes a good point about Kerry's plan (yes, Kerry has a plan!) to cut taxes for those earning less than $200,000 while raising taxes for those earning more than $200,000.

Now the $200,000 cutoff doesn't make a whole lot of sense to me for a number of reasons, only one of which is my belief in trickle-down economics. Why $200G? Is there some reason to reward those who make $199.999.99 with tax cuts while punishing those making $200,000.01 with a tax increase? Move the tax burden a couple percentage points up for the latter person, and he could wind up paying way more than the first guy for the sin of earning an extra two cents.

The other thing is that people - especially people with a lot of money - can do things to avoid taxes. My guess is that there are going to be a lot of people in a Kerry-governed America whose income magically drops to $199,999.99 or less. One of the chief problems with our tax system is it's complexity and vast number of loopholes - and the rich will take advantage of those loopholes, as well as having an incentive to work less since they keep less of their money. My guess is Kerry is looking at income earned statically (assuming that income will be the same as it is now under his higher tax plan), but the tax increase will mean that more people will earn less and the amount collected will be less than he expects.

It also seems to me that $200,000 as a definition of rich is very dependant on a number of things, like where you live. $200,000 a year in a place like DC or NY (home of the $70 million dollar apartment) is a smidge over middle class, while that kind of income in say, Arkansas or New Hampshire could let you live like a king.

But as Steyn points out, Kerry's claim that nobody in the audience makes more than $200 grand a year is questionable - and show's he's out of touch with America:

Kerry, on the other hand, was accomplished only in media-smoothie terms. At Friday's debate, the Senator pledged that he wouldn't raise taxes on families earning over $200,000. Then he gazed out over the audience and said: "And looking around here, at this group here, I suspect there are only three people here who are going to be affected: the President, me, and Charlie, I'm sorry, you too," he added, chuckling clubbily with the debate moderator, big-time ABC News anchor Charles Gibson.

Well, he has a point. Bush is a millionaire, Gibson's a zillionaire, and Kerry's a multi-gazillionaire. But how can you tell by looking at people that they earn under 200 grand? And, even if you can, is it such a great idea to let 'em know they look like working stiffs and chain-store schlubs? But, when you've married two heiresses, it's kinda hard to tell where the losers with mere six-figure incomes begin: it's like the 97-year-old who calls the guys in late-middle age "sonny". In America, quite a few fairly regular families earn 200 grand and an awful lot more families hope to be in that bracket one day. And, more importantly, the sheer condescension of assuming that the room divides into the colossi of the politico-media ruling class and everyone else sums up everything that's wrong with the modern Democratic Party.

Sounds like Kerry needs to read The Millionaire Next Door, an interesting book where an author interviewed and surveyed a number of people who have net worths of over a million dollars. He found that most of these people were average in other ways - they lived in middle-class suburbs, shopped at Sears, drove Buicks and other less-than flashy cars (frequently bought used), and otherwise did nothing to display their wealth. In fact, they accumulated their high net worth precisely by living non-flashy lifestyles - by earning lots of money, but also by not spending it.

The other thing that's dangerous about flat figures of what rich is is that inflation will eventually make it to the point where $200,000 is not the top 1% of income, but more like the top 10% or so. We've seen this happen with other tax cutoffs like the Alternative Minimum Tax, which was originally intended to cover a small number of rich people, but now covers a much larger group of people who make a mere $75,000 or so. Much like there is nothing in Washington as permenant as a temporary program, there is nothing as far-reaching as a law meant to cover a small number of people.


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