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November 1, 2001 1:14 PM   Subscribe

Here's a short but sweet Paul Krugman critique of the House stimulus bill.
posted by electro (57 comments total) 1 user marked this as a favorite

 
Hmmm, looks like corruption.

Smells like corruption.

Is corruption.
posted by Ty Webb at 1:31 PM on November 1, 2001


This was discussed in the WSJ site yesterday:

"What does that mean, "in or near Texas"? Granted, Enron is based in Houston. Phillips is based in Oklahoma, which borders Texas--but it's in Bartlesville, which, at about 20 miles from the Kansas line, is about as far as you can get from Texas without leaving the Sooner State.

As for the other companies Krugman lists, ChevronTexaco is based in San Francisco (though it's moving to San Ramon, Calif., next year), IMC Global is based in Lake Forest, Ill., and CMS Energy is based in Dearborn, Mich."
posted by phatboy at 1:34 PM on November 1, 2001


Though Krugman's geography is admittedly shaky, the Wall Street Journal blurb skillfully managed to avoid the main point, which is that Cheney is brazenly and blatantly sopping to his energy industry cronies. If this were happening in a third world country, the media would more likely call it what it is: corruption.
posted by Ty Webb at 1:42 PM on November 1, 2001


Ty: True! I just hate it when writers are too lazy to check very simple facts. The free press is more often undermined by the lazy than any other thing.
posted by phatboy at 1:47 PM on November 1, 2001


Ok..

Most are energy companies...that's a fact.

Most have a large presense in Texas, because no matter where they're based, they have oil wells and workers there...that's a fact.

Most have contributed millions to the Republican (and some to the Democratic) party...that's a fact.

But the key thing is that GWB and Cheney have friends in high places. They're both energy barons, and even though the CEOs of other companies are "competitors", the nature of the industry (sharing pipelines, highly regional) ensures that they all stay friends.

Is corruption.
posted by taumeson at 1:48 PM on November 1, 2001


makes ... me ... want ... to ... scream
posted by billder at 1:52 PM on November 1, 2001


Everyone who knows the details of the Alternative Minimum Tax raise your hand. Yep. I didn't think so. Congratulations on buying into propaganda. An alternate plan for the future:
Step 1: Understand the issue.
Step 2: Analyze the issue.
Step 3: Come to a rational conclusion.

So sad no-one made it past step 1.
posted by marknau at 1:53 PM on November 1, 2001


marknau,
why don't you explain to all of us kids?
posted by Ty Webb at 1:54 PM on November 1, 2001


Ack. I just reread it. Is the author saying that the repeal of the AMT is in essance giving money to selected corps? The AMT only applies to individuals doesn't it? If this is a case this piece is horribly misleading.

On another note, why the heck is the AMT being repealed. This was a reasonably good tax.

Ty: My understanding of the AMT tax is that it applies an absolute minimum tax rate to individuals. I.e. it limits the ammount of your income you can hide via shelters etc. As far as I know it has nothing to do with corperations, but I could be wrong.
posted by phatboy at 2:02 PM on November 1, 2001


While marknau's thinking, here's a summary of the Alternative Minimum Tax Repeal from Citizens for Tax Justice.
posted by Ty Webb at 2:04 PM on November 1, 2001


That certainly would have been the proper way to start off. I know when there is a subject I know little about, I tend to ask questions first, then have an opinion.
You're asking for an explanation for a complex tax law that exists to sqeeze extra money out of corporations and certain high-income individuals. You'll be able to find this information yourself on the internet.
But I'll leave you for now with this question: Why is it that IBM and GM rank #1 and #2 on the list of corporations who will recieve benefit from the retroactive repeal of the AMT, yet don't appear in Krugman's article?
Mind you, I don't agree with the retroactivity of the repeal. But at least I know what the issue is.
posted by marknau at 2:04 PM on November 1, 2001


phatboy:This was a reasonably good tax

Please explain how one reaches a conclusion like this when one doesn't know any details of the tax.
posted by marknau at 2:05 PM on November 1, 2001


In a nutshell, as I understand it --

If you don't pay enough using the rest of the rules, you have to pay at LEAST a value in the AMT. For most people this is never an issue (move enough mature stock in a given year, though, and you'll quickly see the costs of holding long. Watch that second mortgage, and those medical expenses). However, middle sized companies are hit hard.

The thought that this only benefits Cheney's friends is foolish. It benefits ANY company that works in high value material -- diamond wholesalers, for instance, are hit with the AMT (there is a good markup in them thar rocks!), as is the neighborhood power concern, etc.

Have a read at Guide to the AMT
posted by dwivian at 2:12 PM on November 1, 2001


Mark Nau:

Please stop being a troll -- see definition 2.

Check out Ty Webb's link to Citizens for Tax Justice.

There you can learn that it's the CORPORATE AMT that we're talking about.

There you can learn that in 1998:
GE would have payed 2.3% income tax, but with the AMT, payed 8.0.

Or that Texaco would have had 199 million in tax REBATES but instead, after paying AMT, had something like 67 million in rebates.

IBM, number 4 on the list, is the only company that had a decent tax rate to begin with..they went from 23.9 to 26.7
posted by taumeson at 2:14 PM on November 1, 2001


It is not trolling to insist that people have facts to back up opinions. Only then can any meaningful discussion take place. I strongly object to the parroting of propaganda. There is no way in hell that voicing that objection, and the reasons for it, are trolling.

You list some data as if it were self-evident that anything that increases corporate tax liability is good. How do we know if GE "should" pay 8.0% or 2.3%? Does it even make sense to tax at the corporate level in the first place?

Note how we're now dealing with real facts rather than regurgitating one-sided opinion articles. Much better, no?
posted by marknau at 2:21 PM on November 1, 2001


Does it even make sense to tax at the corporate level in the first place?

Does it make sense that corporations enjoy all the rights and legal protections of individuals, but with none of the corresponding responsibilities?
posted by Ty Webb at 2:26 PM on November 1, 2001


marknau, I appreciate your point about the research and backing things up.

However, 'tis a complex world we live in, and research (especially on the internet) often leads to various types of propaganda itself. As metafilter users, I don't we can or should be expected to apply journalistic standards (such as they are) to our comments.

I do agree with your main point, which is about blind bandwagon hopping, but "the facts" about any issue, especially controversial ones, are difficult to sort out; people relying to some degree on others (such as journalists and columnists) to filter those facts for them is surely not unreasonable.
posted by cps at 2:29 PM on November 1, 2001


Absolutely better.

I was objecting to ". . . So sad no-one made it past step 1."

Furthermore, whether or not we should tax at the corporate level is an entirely different argument. For the sake of discussing the AMT, we must assume that those who make the decisions have decided that yes, it is appropriate.

Futhermore, I don't know if increasing corporate tax liability is a good thing. I would say that in most cases, yes. Perhaps it'll keep them from lobbying so much...and if a company is still profitable after taxes, then increasing tax liability is fine and dandy in my book. Most things that a company needs to do (R&D, wages, rent, etc.) to stay alive are taken care of before taxes (I could be wrong, but I thought that's the case).

Now none of us can say whether or not GE "should" pay 8.0 or 2.3 %. It's up to Congress as part of their duty to regulate commerce. They're the ones who've said. Furthermore, since they're elected officials, it's up to us to make sure that Congress knows our opinions on the matter...but ultimately it's not up to us.
posted by taumeson at 2:30 PM on November 1, 2001


Does it make sense that corporations enjoy all the rights and legal protections of individuals, but with none of the corresponding responsibilities?

Good question. However, corporation = individual is a fiction. They can't vote, for example. Instead, the rights we grant to corporations are really there in order to assure the rights of the individuals. People shouldn't lose rights just because they group together to do some thing.

Here's a question for you:
Corporation XYZ makes $1 billion, and will pay that to its shareholders. One shareholder is Gramma X, who has 100 shares of XYZ in her pension account. One shareholder is Tycoon Y, who has 100,000 shares in his Schwab account.

Why do you want to tax the $1 billion BEFORE it gets to the shareholders? That tax falls equally on Gramma X and Tycoon Y.
posted by marknau at 2:34 PM on November 1, 2001


Ty: Yes. It is inappropriate to allow a companies employees to be directly attached in legal actions (the primary benefit of incorporation), but it is foolish to tax a company because such taxation is merely hidden from those impacted.

Stockholders get less benefits, employees get paid less, or customers pay more for product. This is the direct impact of taxation of corporations. No corporation actually pays tax -- people do.
posted by dwivian at 2:34 PM on November 1, 2001


marknau: GM *did* appear in the article. Go back and read it, again. The point of the article was how certain much smaller companies were to receive a disproportionate share of the benefit.
posted by electro at 2:34 PM on November 1, 2001


But that's not necessarily how the money gets used!

In your ideal case there is no reason that Tycoon Y should not get what's coming to him. If it's taxed at a higher rate, so be it!

But often that money goes towards Legal Fees, Executive Bonuses, and Lobbying. Some companies had been paying upwards of 50% of after-tax profits on Legal Fees alone until their financial records came out and their stock plummetted.

And remember...corporations don't need to vote...they buy them wholesale!
posted by taumeson at 2:37 PM on November 1, 2001


whether or not we should tax at the corporate level is an entirely different argument

I disagree. I think we need to know something about the desirability of corporate taxation before we know what our opinion of this tax repeal is. If corporations should be taxed to the hilt, then this is probably bad. If corporations shouldn't be taxed at all, then this is probably good.

It's up to Congress as part of their duty to regulate commerce

Huh? Then we can't have an opinion on any law passed, because that's Congress's job? I personally think it is better for GE to pay 2.3% than 8.0%. 0% would be better still. That definately informs my opinion on whether the corporate AMT should be repealed.
posted by marknau at 2:37 PM on November 1, 2001


If we lower taxes on corporations, the prices would not drop by the same amount...it's all about increasing profits, and the corporations know this.

They'd keep the prices higher than necessary because we'd be used to paying full price!

I think we need to know something about the desirability of corporate taxation before we know what our opinion of this tax repeal is.

I think the current inevitability of corporations being taxed make it a moot point whether or not they should..when we're here talking about the repeal of one piece of the puzzle.

Then we can't have an opinion on any law passed, because that's Congress's job?

Well, no. You said:

How do we know if GE "should" pay 8.0% or 2.3%?

And I was stating that it's Congress's job to decide whether or not they should. What you or I think is a very small part of the puzzle.

But I definately believe that expressing your opinions on important subjects like these is vital!
posted by taumeson at 2:42 PM on November 1, 2001


electro: Good point about GM being mentioned. I read right over that first time through.

taumeson: You just mentioned many different ways in which corporate profits get paid to individuals. Those individuals then have to pay tax on that income. Why should everyone doing business with a corporation pay an additional layer of tax?

Don't anthropomorphize the corporation. It doesn't feel the bite of a tax burden. The people gaining benefit from its profits do.

My point is that Tycoon Y and Gramma X are getting their shares AFTER the corporate tax. They have just both been hit by the same rate of taxation. For that matter, Employee Z is being affected as well. His labor is less valuable because of the corporation tax, in exact proportion to the rate of that tax. Why is this desirable?
posted by marknau at 2:45 PM on November 1, 2001


marknau: But I'll leave you for now with this question: Why is it that IBM and GM rank #1 and #2 on the list of corporations who will recieve benefit from the retroactive repeal of the AMT, yet don't appear in Krugman's article?

marknau, you may have unwittingly violated your own first step: understanding the issue. The first sentence in the fourth paragraph shows GM's return. Krugman's not arguing against the big companies getting big returns; he's arguing that the medium size companies associated with Cheney would get returns all out of proportion to their size.

The page he referenced (Citizens for Tax Justice) seems to be the one arguing against tax breaks for big corporations. Krugman has unearthed an interesting anomaly using their data. You can argue against Krugman's position or you can argue against the CTJ position, but they are different statements and you seem to be mixing them.
posted by joaquim at 2:45 PM on November 1, 2001


The issue brought up by the article is not whether or not a repeal of the corp. AMT ought to be considered, but whether repealing it is really to the benefit of the greater good, or a pay-back to certain corporations. Whether or not you think corporations should be taxed at all isn't really relevant to this particular debate.

The issue is not that coporations will save money, but rather the appearance that certain corporations will save the most amount of money.
posted by cell divide at 2:47 PM on November 1, 2001


They'd keep the prices higher than necessary because we'd be used to paying full price!

Not true. You should be able to find out more about this by researching "Price Elasticity of Supply."
posted by marknau at 2:48 PM on November 1, 2001


Why tax corporations? When oil companies pollute rivers, is Gramma X going out there with her scrub brush to clean it up? Nope, the government pays for cleanup, which means individuals paying taxes do. How about tobacco subsidies?

When multinational corporations can pay off politicians via PACs, receive massive government contracts and then are allowed to funnel profits to offshore banks, this is effectively pulling taxes paid by individuals out of the U.S. economy.

200+ years ago, the problem was taxation without representation. Now it's representation without taxation.
posted by billder at 2:50 PM on November 1, 2001


marknau wrote: corporation = individual is a fiction. They can't vote, for example.

Corporate personhood is a fiction, but not in the way you mean. The Supreme Court established, in Santa Clara County v. Southern Pacific Railroad (1886), that corporations be defined as persons under the law, entitled to the same constitutional protections.
posted by Ty Webb at 2:51 PM on November 1, 2001


joaquim: Krugman and CTJ are arguing from a point of view that corporation tax breaks are necessarily bad. Krugman has skewed the data presentation in order to score political points. There is a reason that oil and mining companies will benefit more from a AMT repeal than others.

cell divide: Many people of a particular ideology think that corporate taxes do harm, not good. This is not an unreasonable position. This is also an important datum if discussing a legislative action that proposes to follow through on this concept.

For example:
"You're just doing this to pay off your oil buddies"
"No, I happen to think that corporate taxation is wrong-headed. I am following through on that principle."

The truth, as usual, lies somewhere between.

billder:
Excellent point, which is why the harmful behaviors should be taxed. A blind tax on all corporations hits a clean industry exactly the same as a dirty one.
posted by marknau at 2:54 PM on November 1, 2001


"Price Elasticity of Supply."

Hmm...it's pretty well known that the free market does not perfectly follow Keynesian rules...you should be able to find out more about this by researching "stagflation".

Yes, it makes sense that if there's more of something, the price would go down...more people being able to offer it at a cheaper price would drive the prices down.

But if corporations stopped getting taxed...

Well, that has nothing to do with supply. Nor demand. It has to do with profit margins, plain and simple. Their costs are now less, which makes the profit margin higher.

And EVERYBODY's profit margin would theoretically be higher...some higher than others, but still, rather uniform... at least the rules governing the increse would be uniform.

So what's the impetus to lower prices? There isn't one.
posted by taumeson at 2:59 PM on November 1, 2001


marknau: thanks, but a question. I'm a one-man consultant, a sole proprietorship. If I incorporate to become a one-man C corporation, should I pay taxes?
posted by billder at 2:59 PM on November 1, 2001


Santa Clara County vs. SPRR comes up a lot, so I'm familiar with that argument.

As a reality check, though:

Why can't corporations vote if your take on that SCOTUS finding is true? Why don't they have the right to adopt children? Why can a foreign corporation not marry and gain citizenship?

A further discussion of this topic seems off-thread. I definitely welcome an email or MetaTalk debate, however! I've enjoyed the points everyone raised so far.
posted by marknau at 3:00 PM on November 1, 2001


Why can a foreign corporation not marry and gain citizenship?

"Do you, Bertlesmann, take Random House, to be your lawfully wedded spouse?"

"I do."
posted by billder at 3:07 PM on November 1, 2001


People seem to think that, after corporations make a profit, they just sit back and say "wow!"

No.... they spend that money, or use it in investments (spending with obvious returns) to gain income against future lost revenues....

If a corporation doesn't lower prices, it may pay employees more. It might pay stockholders more. Or, invest in more facilities (new jobs), property (speculative investment), companies (boosting that company's revenue), etc.

It's not as simple as lowering prices. The money goes everywhere.
posted by dwivian at 3:07 PM on November 1, 2001


Very nice point, billder. That is definitely the weak point in my argument.

I am not familiar with all the ramifications of becoming a C- or S- corporation. It was something I looked into briefly when I was doing a lot of private tutoring.

I would *think* that you would not be able to use corporation funds to cover all of your personal costs and thereby escape all taxation. The corporation would pay you an income, and you would have to pay taxes on that. Ideally, you should also have to pay taxes on any benefits you receive.

My central thesis is that the taxes should be captured at the point where an actual individual is going to use the money for his own personal expenses. That point shouldn't be controversial, and yet seems to be.

A broad minimum corporate tax strikes me as a poor way to cover a possible loophole like the one you bring up. Someone in the 38% tax bracket would wind up paying considerably less by using such a dodge, even with AMT.
posted by marknau at 3:10 PM on November 1, 2001


"Do you, Bertlesmann, take Random House, to be your lawfully wedded spouse?"

"I do."


Thank you, billder.
posted by Ty Webb at 3:12 PM on November 1, 2001


My central thesis is that the taxes should be captured at the point where an actual individual is going to use the money for his own personal expenses. That point shouldn't be controversial, and yet seems to be.

OK, I will agree with that. However, (based on hunches and no numbers) I don't believe CEOs receiving compensation of millions of dollars in various forms are paying 38% of that in taxes. There's accounting futzing available on those levels that I can't dream of.

I think a main difference in the arguments is theory vs. practice. There's the theoretical corporation and then there's abuse of the system. If there was no abuse, I think I could live without corporate income tax (he says, without thinking about it too much).
posted by billder at 3:20 PM on November 1, 2001


If a person commits a crime that results in the death of a human being, that person does time and loses his or her political rights for the duration of incarceration, in some states they lose their political rights forever. A person can be executed for murder. If a corporation does the same, not only does it not lost its right to the political process, it can continue lobbying for decreased liability the the crime they have been convicted of. The concentration of wealth in corporations necessarily makes them powerful political actors, especially in a cash and carry electoral system like ours.
posted by Ty Webb at 3:24 PM on November 1, 2001


You are imputing special rights to corporations that do not exist. If we have an unincorporated business, and we make a car that winds up being faulty and kills people, we might wind up going to jail. It all depends upon whether or not someone did something criminally liable. If so, some person or people will be punished.

The exact same process plays out if our business is incorporated or not. Same-same. Incorporation has conferred no special rights. In fact, incorporating exposes a business to *greater* scrutiny, because you need to make more records publicly available. Are you just against all business?

If you are complaining that rich and powerful people get special treatment, I agree. This happens independent of the corporate charter. You're barking up the wrong tree.
posted by marknau at 3:42 PM on November 1, 2001


But the latest economic proposals from the administration, like the Cheney energy plan, don't look as if they came from serious free-marketeers

When will the president and the current majority in the house admit that this is nothing but the socialism that they all rail against?
The main reply: "Helping companies keeps the economy strong, but helping people encourages fraud."
I'm glad I'm trusted.
posted by themikeb at 3:53 PM on November 1, 2001


Isn't the real issue in controversy here "whether or not repealing the Corp. AMT tax (retroactively!) a genuine economic stimulus or bad faith excuse to take care of campaign supporters and business cronies"?

Do you think this will save/create jobs in the near term?
posted by BentPenguin at 3:53 PM on November 1, 2001


BentPenguin:
Agreed, and I can't come up with a good reason for the retroactivity other than Republicans shovelling money at their likely supporters. It joins a host of policies whose sole rationale is exactly the same: buying votes.
posted by marknau at 4:05 PM on November 1, 2001


i thought this was an interesting exchange on the newshour last friday:

MARK SHIELDS: Talk about a return on investment. They under the repeal of the alternative minimum tax get $254 million back. There's $25 billion in repeal going back 15 years. They're going to pay back out of the Treasury, which we now know is depleted and only existing on Social Security receipts, back to General Electric, General Motors and so forth.

Jim, I have to tell you alternative minimum tax was signed into law by that notorious liberal leftist Ronald Reagan in 1986.

DAVID BROOKS: I had a feeling Mark would bring this up but it's not sporting of you; it's like shooting fish in a barrel, because this is the stupidest provision of the law.

My only theory of why it's in there is every once in a while each party has to put a provision in the law which confirms all the stereotypes of their enemies. That's what this is.

JIM LEHRER: But in this case knowing full well it's never going to be enacted into law.

DAVID BROOKS: They get the hurt but none of the benefit. It doesn't only, you know, say that people don't have to pay the alternative minimum tax in the future, which might have shall have some incentive to get them to produce and invest more, it forgives them the money they paid in the past. There's no incentive effect for this. It's not sporting of you to attack that.
posted by kliuless at 4:12 PM on November 1, 2001


However, corporation = individual is a fiction. They can't vote, for example.

Oooh! I'll bet they've got their lawyers working night and day to get them THAT one. After all, we've all seen just what a potent and effective right THAT can be.

It's about power, not sham. Money, not honor.
posted by rushmc at 4:45 PM on November 1, 2001



You are imputing special rights to corporations that do not exist. If we have an unincorporated business,
and we make a car that winds up being faulty and kills people, we might wind up going to jail. It all
depends upon whether or not someone did something criminally liable. If so, some person or people will
be punished.

The exact same process plays out if our business is incorporated or not. Same-same. Incorporation has
conferred no special rights. In fact, incorporating exposes a business to *greater* scrutiny, because you
need to make more records publicly available. Are you just against all business?


You're right in the case of criminal liability (which is the case you were arguing against), but not civil liability. And I think you're conflating two separate issues. There is a difference between incorporating a business, which limits the civil liability of the shareholders, and offering public ownership of stock. There's no increased public scrutiny of private corporations. And corporations can only be sued for corporate assets, not the assets of the shareholders.
posted by electro at 5:12 PM on November 1, 2001


Good point on the public scrutiny. I jumped immediately from incorporation to publicly-traded. I actually don't know anything about what non-public corporations have to reveal.

Re: civil liability. Actually, an officer of a corporation can be held personally liable if he is not acting in good faith, or if damage is the result of willful misconduct.

Also, there is a process called "piercing the corporate veil," by which a court can expose the officers of a company personally liable for the corporation's debts and obligations. On top of all this, federal law allows for holding the responsible officer(s) personally liable for federal taxes owed by the corporation.

It's not a safe haven for all kinds of mischief. It's a sensible firewall between people's actions as officers of a corporation and people's actions as individuals.
posted by marknau at 5:45 PM on November 1, 2001


Mark has a good point that perhaps our tax structure is not setup to be the best it could be. Perhaps taxing only individuals is a good idea. Perhaps having a government SPENDING LESS would be a good idea. Whatever, I'm no economist.

But back to the AMT. Is now the right time to be repealing it? Is this is the right circumstances? Do we want it to be complete repealed, therefore making the taxpayers liable for the past 15 years of the tax? That part about having the Treasury pay it out bothers me.

I think "NO" is the answer to all those questions. There should probably be a bunch of changes. But taxing the rich is important for a society. They get the most benefit out of it, so they need to pay the most.

No, the argument that keeping the rich rich creates jobs has been found to have no weight. Rich people spend less of their money than poor, so by giving the myriad poor and middle class more money will put a lot more capital into the system then by giving it to the few rich.
posted by taumeson at 6:12 PM on November 1, 2001


Arianna Huffington has a similar take on "Operation Enduring Avarice", also a quick but worthy read...

Also, I gotta give props to marknau. I disagree with him, as I have in other threads, but he's showing a willingness to admit when an area is discussed that he's not as knowledgable about, as well as willingness to recognize when he's made too-large rhetorical leaps- something many of us, myself included at times, aren't as willing to do. I still don't agree with much of what he's saying, but I sure do respect how he handles himself here.

That said, I'm with BentPenguin on this one- the idea that corporations shouldn't be taxed is silliness to my thinking, but that's a tangential issue to the posted link. Now, while the AMT may have needed some reform (its original intent was to close the loopholes of wealthy [non] taxpayers, yet many heard the stories of some former dot-com employees with worthless options still owing huge tax bills on money they never saw) this action is so bold in its corruption and pandering to campaign donors that it's frankly astonishing. The AMT repeal was a much-sought Republican measure well before Sep. 11th; too often these days we're seeing examples of legislation proposed ostensibly to deal with "the current crisis" but really just to ram through legislation favored from long before that fateful day. If the Reps want to pass an AMT repeal, call a spade a spade- don't play these cheap rhetorical games and exploit human tragedy to better your biggest donors' profit margins.

Besides, calling it an "incentive" program to benefit the common man is either an enormous cynical lie or a horribly deluded notion of how the economics work. Businesses will not pay/hire employees or make spending decisions that are unprofitable (unless they're poorly run to begin with, i.e. Amazon.com), so giving them huge tax breaks/refunds/subsidies isn't going to make them hire even one more worker that they wouldn't have anyway- refunding money they'd already written off as spent for the last 15 years makes it just "found money" that will find its way into stockholder hands and not into new investments they weren't planning on making anyway. By comparison, of course, giving a middle-income family an extra $300 does at least stand a very good chance the money will be spent promptly, stimulating the economy with new consumer demand. However, giving GM $800M isn't going to make them expand production and hire new workers- right now, only increased demand will do that, according to the basic precepts of the free market. That this AMT repeal is also retroactive- further belying the "incentive" notion- and funded from basically the SS surplus paid for out of the aforementioned "common man's" pocket... well, that's absolutely repellant.
posted by hincandenza at 7:05 PM on November 1, 2001



Wow... that started out as like a 5 line blurb response. Go figure- it's a lot longer than I thought it was before I hit "post". :)
posted by hincandenza at 7:06 PM on November 1, 2001


I dunno, hiz, you could've just compared the money given to GM with government makework programs of the sort conservatives hate and . . . well, that would've been another eight paragraphs of bile. Not that I probably wouldn't have agreed with you all the way. I hear about this and the House's declining to pass an airline security bill and I'm thinking, "Earthshaking Congressional overthrow in 2002." Mid-term elections almost always suck for the party in control of the White House. But my, if the Repubs. aren't so asking for it. That some Dems. had to cross over means less than nothing -- they're sucking up to the White House.
posted by raysmj at 12:17 AM on November 2, 2001


Fossil fuels corporations are the third most subsidized industry in the US. Read that as corporate welfare, the most pernicious kind of welfare. No tax breaks are deserved, the common people already provide too much support to them.

Krugman is correct in saying this bill has little to do with Sep. 11 and economic recovery/stimulus.

TomPaine.com has some interesting pieces this week about the better approach to the fossil fuel dependencies we have and how we should be spending that big oil welfare check.

Two quotes:

"Taxes are the price we pay for a civilized society"
Shaw, a prominent Republican, got it right.

"I rob banks because that's where the money is."
We should tax money, not people. More money=more tax.
posted by nofundy at 5:37 AM on November 2, 2001


"Taxes are the price we pay for a civilized society"

Money no more guarantees a civilized society than lack of obscenity does. It takes a bit more.
posted by rushmc at 6:17 AM on November 2, 2001


Taxes pay for infrastructure and public servants. Without it, we can only live in caves in Afghanistan and piss in the corner. But you are correct in that it takes more than money, it takes civil citizens and civil discourse. An example would be the difference between statesmen and politicians, one civil, the other not.
posted by nofundy at 7:06 AM on November 2, 2001


Krugman and CTJ are arguing from a point of view that corporation tax breaks are necessarily bad. Krugman has skewed the data presentation in order to score political points. There is a reason that oil and mining companies will benefit more from a AMT repeal than others.

Krugman is not arguing that at all, at least in this article. He's arguing that some companies will benefit disproportionately from the bill. You can take that as an attack on corporate tax breaks; I read it as an attack on the practice of favoring special interests under the guise of common good.

As far as scoring political points, what office is he running for? And I agree that the oil and mining companies will benefit more from an AMT repeal than others -- that's what Krugman's article is about.
posted by joaquim at 10:01 AM on November 2, 2001


An example would be the difference between statesmen and politicians, one civil, the other not.

I would say one moral and possessed of vision and commitment to ideals, the other not. But let's not quibble.
posted by rushmc at 9:13 PM on November 2, 2001


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