The OC Blog Back Issues Our Mission Contact Us Masthead
Sudsy Wants You to Join the Oregon Commentator

Definitely Maybe

For all of you still trying to justify a vote for John Kerry this November, it should come as some relief that he eagerly took on Bush’s challenge about whether Kerry as presdident would have invaded Iraq, based on what we know now. But you may be distressed to hear his response:

    “You bet we might have!”

You bet we might have? You bet we might have? As Dave Barry would say, I am not making this up. It’s too soon to tell yet, but this could be a gaffe on the level of “I actually voted for it before I voted against it.” Has he yet said something that so perfectly encapsulated his nonexistent vision for US foreign policy? I know one thing — he’s never said anything so pithy that would reassure someone about the vision thing.

Good thing John Kerry is so darn electable! Because if he wasn’t, he’d be a major embarrassment.

P.S. Hey! It’s been awhile. I’m on hiatus from my other blogs, which means the OC is the lucky beneficiary of my near-compulsive musings. Or unwilling recipient. Whichever.

  1. Chris Crawford says:

    I wonder if I might be able to strike up a discussion — most definitely NOT an arguement — about the polarization of the American body politic. From my point of view, the invasion of Iraq was an egregious error, and I cannot understand why anybody would support Bush. Obviously, since millions of reasonable people do support Mr. Bush, there’s something interesting going on here. So I’d like to engage any *reasonable* person on this blog in a *courteous* exploration of the underlying reasons for supporting Mr. Bush. If I’ve come to the wrong place, and this is more of a strut-your-stuff blog for people who like to win debating points, then I’ll apologize and shuffle off somewhere else.

    Chris in Jacksonville

  2. Timothy says:

    Mofo: Slippery-slope concerns at best.

    1) Has Amazon (and host of other on-line retailers) caused the coffers of states with sales taxes only to dry up? Only customers in Washington State pay tax on purchases from Amazon (as it’s headquartered in Seattle). No, it hasn’t. It’s 2:04 AM here and I’m not going to run down the data right now, but I’d wager that on-line purchasing hasn’t had much of an effect. There are also enforcement tricks that states use to prevent things like that from mattering too much. In Texas, for instance, unless you bring the reciept showing that you turned in an out of state license for a Texas one, when you register a car from out of state you must pay the sales tax on the blue-book value of the car. Prevents doing to one of the bordering states (not likely from here, I’ll tell you what) and bringing a car in tax free…or from Mexico, for that matter. There’s also a limited feasibility of such things, economies of scale and all that. Transportation costs, warehousing, companies will only make such maneuvers if it is profitable for them to do so, this is 201 theory of the firm stuff.

    2) This is just silly on its face, but I’m going to go ahead and address it anyway because I’m a nit-picker like that. You’re missing the increase in disposable income due to the elimination of the federal income tax. 18% sales tax at the point of sale is still WAY less than 20% of your income to the fed (plus Social Security, Medicare, etc) and then an 8% state sales tax. People are smart enough to know these sorts of things, or at least to count the number of dollars in their pockets and say, “hey, I’ve got more now.” Given that the Marginal Propensity to Consume (MPC) in the US is about .86, with an 18% sales tax you’re paying 18% on 86% of your income instead of 20% on all of your income and then another 8% or so in state sales tax on the 86% of your income you spend. For the sake of simplicity, we’ll say that 20% includes ALL federal taxes, meaning this is a VERY low bracket. With an 18% total sales tax the effective rate on the average US consumer is 15.48%. With 20% total to the fed, and an 8% sales tax, the effective rate is 26.88%. Look, people in low brackets have saved over 11 percentage points (or 42%) in taxes. With more income, they’ll buy more, not less. The increase in consumer spending will be less than it would be by simply eliminating federal taxes, but, well, duh.

    The difference in effective rates for those in the top brackets will be higher because they pay the highest marginal income tax rates now, and those in the top bracket cover over half the tax-burden. The top quintile of tax payers pay 64% of all income taxes, according to This CBO Paper. And, before I digress further into some liturgy about tax burdens, I will say this: Cuba? HAH!

  3. Tyler says:

    Hmmmm…I was wrong.

  4. Mofo Jones says:

    Sorry about the spelling errors.

  5. Mofo Jones says:

    Back again! A few concerns regarding the not-soon-to-become-a-reality national sales tax.

    1. While it would effectively eliminate confusing tax forms, there would be plenty of ways to weasel out of paying it. Online retailers could set up shop overseas, allowing consumer to avoid the tax, right? Malls (strip and otherwise) would become ghost towns as people buy everything from DVDs to gasoline online.

    2. In places with both the national sales tax and local, the tax on goods could reach 18% or more. Consumers would become more price concious and ultimately spend less. The economy would instanteously collapse, sending the country into turmoil, thus allowing Cuba to invade from the south and Canada from the north.

    See? National sales tax = bad idea.

  6. Timothy says:

    If you can’t beat them, bore them to death with economics. That’s what I always say.

  7. Tyler says:

    And with that, the debate is over…

  8. Timothy says:

    What of the national sales tax?

    I think I’ll be handling this one. There’s a certain school of thought in neo-classical economics that an income tax is less distotionary to consumer preferences than an equal-yield sales tax. The reason being that an income tax essentially functions like a sales tax on all goods, shifting in the consumer’s budget constraint. A sales tax under which some goods are not included can both shift a budget contraint and move the end points around, leading to a greater level of distortion. Of course, this is in an ideal world, and that’s not the world we live in.

    The income tax has many sorts of exclusions, and many ways to get around paying taxes on one’s earnings. That creates incentives, and those incentives may serve to further distort consumer preference, of course that’s hard to know given that we don’t have any data on behavior without tax, but where there’s an incentive folks will find a way to get what’s behind it (in this case more disposable income through hiding things from the IRS). There’s also a problem with income tax recipts being very sensitive to cyclical fluctuations. This is the main problem Oregon has, and there were a couple of pieces in the magazine about this over this past year.

    This is where the sales tax comes in, exempt non-restaurant food like states tend to do, tax everything else at some reasonable percentage, and you’ve solved a few problems. Firstly, the sales tax is administered at the point-of-sale rather than through self-reporting, meaning that it’s much harder to get around. Secondly, the complicated system of deductions, tax filings, withholding, etc could be eliminated, thus reducing the size of government. Thirdly, government income would not be as cyclically sensitive because there’s always a certain level of spending in the economy, even when incomes are down. Lastly, the tax burden would be more even but still likely progressive in nature. Now, I’m opposed to taxation progressivity [yes, I’m well aware of and understand the economic arguments for it], but I’ll settle for a less progressive system. As the sales tax would be a percentage of the cost of the item, expensive items would be taxed at higher rates meaning that people who bought expensive things would pay more. Who buys expensive stuff? People with money. However, as the tax would be an equal percentage on all goods, a lot of the penalty for success would be eliminated.

    There, so that’s the long-winded pocket synopsis of an argument for a national sales tax instead of an income tax. Not to mention that the income tax had to be amended into the constitution and was never part of the original intent. Do I think any of the above is likely to happen? Not really. At this point things are too far along to really change them that drastically. The tax code was written by lawyers and accountats, is administered by Congress (mostly lawyers and accountants] and I can see no reason why they’d want to make themselves unemployed. In short: income tax bad, sales tax good.

  9. WWB says:

    1. “Kerry is evil” was supposed to be a sendoff overstatement. A joke. Using it to describe the political opposition seems to explode the notion of a “loyal opposition” and can have only ill effects; on the other hand, calling terrorists evil is fine with me.

    2. National security overall is the deciding issue on this election. Not just Afghanistan and Iraq, but beyond. Nothing Kerry has said or done has shown me he has the temerity to lead such a fight. I’m also a libertarian on domestic issues, where Bush has been a disappointment — but Kerry would be worse.

    3. This was fun, but I’m leaving for Vermont in just a few hours. I’ll be back on Tuesday.

  10. Olly says:

    Bush certainly did use the word “evil” numerous times in that speech. However, unless I missed a bit, he wasn’t using it to describe the opposition party. An important distinction, really. (On the other hand, “evil” is one of the milder epithets Ann Coulter has for the Dems – but you’ll find no love for her around here.)

  11. Mofo Jones says:

    Pulled back into this again. You disagree with the “evil” statements made by certain Kerry supporters? With Bush, who thinks of everything in such black and white terms? Isn’t this the man that chats with God and makes speeches about fighting evil? He dropped the word no less than six times in his 2002 state of the union address.

    Many say Kerry “waffles.” I say he thinks.

    WWB, if Iraq were the only issue to consider in this election, I could understand why you would swing towards Bush. There are a million other to consider and Bush is wrong on most, if not all of them. What of the national sales tax?

  12. WWB says:

    Mofo, gone so soon? If you ask me, I’d take baseball and fishing over hockey and windsurfing. P.S. John Kerry is evil!

  13. Olly says:

    It’s not just “hard-lefties” who have some problems with the re-election campaign…

    I know what you mean, though: Kerry is triangulating, and Bush has clearly-laid-out positions on a number of issues, which in and of itself commendable. The trouble is, I vehemently disagree with Bush on a number of these clearly-laid-out positions. (Not that I’m going to vote, or anything, but still.)

  14. Timothy says:

    Maybe the rest of us aren’t hard-lefties.

  15. Mofo Jones says:

    My work is done here. If you’re really itching for four more years of tomfoolery, then vote for the man that appears on fishing shows.

  16. WWB says:

    Hey Mofo, could you cite a source that doesn’t refer to its political opponents as “evil”?

    Now, if one agrees that Iraq was the right war at the right time, then a vote for GW speaks for itself.

    Even if one disagreed with some part of it, it’s the mark of a good leader that he’s stuck it out even when politically disadvantageous to himself. (If one thinks this was a war for oil, Halliburton, etc., there’s no use debating absurdities.)

    A lesser politician might have freaked early and reversed course. If you really want to vote for one who did, he’ll be on the other side of the ballot this year.

  17. Mofo Jones says:

    Here ya go.

    Not comprehensive, only covers through Oct ’03.

  18. Timothy says:

    Define ‘wrong moves.’ Also, that’s the usually Kerry line…”JFK (not) might waffle, but GWB does something way worse!” That’s not a justification for a Kerry vote, that’s “I know you are but what am I.”

  19. Mofo Jones says:

    “For all of you still trying to justify a vote for John Kerry this November.”

    Better question: how can you justify a vote for GW Bush, sucka? Better a waffler than a man fully commited to making all the wrong moves.

Sorry, the comment form is closed at this time.