Cut this, cut that - America has a budget crisis - excuse me??!

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So, what you are basically saying is that the trickle down effect will fix everything?

 

Well, as long as they design laws that they themselves must then follow, or else - I don't really mind. Hypocricy is no less of a problem when "our guys" do it, is it?

As it is, I think the growth of the deficit over the last 12 years makes it seem like the US simply can't afford tax cuts at the current spending level. People are trying to have their cake and eat it too, and at least one has to stop. Of the two, I think tax cuts are the less painful to cut.

 

Oy! You wee poor person. Let me help you. The link is tax revenue. IMO the deficits states like Texas have build up have everything to do with spending and simultaneous curtailing of tax revenue. It is not about waste, which is cured with oversight and a few cuts and that is it.

It is about the mistaken if fervent belief in US conservative circles that systematically cutting taxes while maintaining spending will lead to a desirable reduction in government. By that logic, perversely, increasing spending, will only accelerate the process. Win-win! Cut taxes and spend more as the road to salvation. The lower taxes and the increased government spending will stimulate the economy, and the benefits will trickle down, golden-shower-like to all of society while government will be, since it has to be, reduced in size, and everybody lived happily ever after.

That's in brief what starve the beast (STB) is about, and this has become the dogmatic Republican default position. Oy! I posted an article explaining why it doesn't work a couple times already, and since you have not been listening, and I will bring it up again especially for you:

Spoiler

Tax Cuts And 'Starving The Beast' (STB)

You should read the entire piece.

Taxes in the US proper are low by international comparison already. They are even lower in a state like Texas. For US conservatives they are still too high! I wonder, how much lower shall they get? Taxes are a necessary evil, and conservatives in the US don't recognise that there is (a) a need for a reasonable level of taxes (which is higher than what they have legislated) and that (b) their tax levels are too low to sustain a reasonable level of governance. They deny both (a) and (b), hiding behind ideology and persuade themselves and folks like you that tax cuts are ever and always good for the budget and economy. They aren't. And it was that ideology that allowed them to cheer at Bush cutting taxes while spending like a drunken sailor because deficits don't matter. That makes perfect sense, if only when viewed in light of the ideology of STB.

Arguably folks who can purchase a yachts for a quarter million dollar don't need a tax break. And they are also not the folks who won't buy a yacht if there is a tax on them, so I also think that it won't hurt yacht building business, and by extension the economy. So this is about doing the boys a favour, while at the same time cutting education, nursing homes, and other basic government services. Oy! Ah well, folks who can purchase for a quarter million don't need these government services anyway. Now what does that say about their understanding of governance?

Oh never mind, another tax break or two and the country is back on track.

 

That would seem to make them a lot like "country club" Republicans.

That is really what they are saying. Note that the tax cut is on yachts. Snook's argument is that this will create jobs, but cutting the sales tax rate in Texas, for all Texans would by the same theory create more jobs, then just cutting the rate for a specific, very well-heeled group, on only one particular item.

That's a tough one here, because Texas is a conservative state, run by conservatives for years. And now the very conservative Texas government is nearly bankrupt. So they can't blame "liberals." But like most big government, big spending Republicans, they have been spending on the credit card, and now the bills are due.

They have always claimed that their anti-union conservative run schools were better than those found in more union friendly, liberal run states. And many of the schools are very good. If they try to dismantle the public school system here, the parent outcry will be gigantic. It already is in some districts. So they have been "hoisted on their own petards," given that they have only themselves to blame.

Of course, they cling to the same old failed, trickle down theory bull, because they really believe that stupid rot: Make the rich even richer and "everyone" will benefit, even if you have to take, steal and cheat from the middle class to do it! At this point, even the rich are bemused by the Republicans.

 

Nice pretend. Yeah, really, those rich yacht owners mean so much to the actual budget. I know we should do all we can so we don't lose THAT business. Pigs at the trough, while they have their filthy hands all over my kid's educations. I really don't care what they want to do for the rich, but GET your hands off MY kids!

 

I don't expect much from the state government, really. I don't really need them for much. They don't keep me safe, I can't afford to use their court system, and I really don't care about the roads. As long as I can drive on them, that's fine. I suppose I can use the fire dept, which is close by, in case of a fire or other emergency. The big thing for me and my family is the education my kids get from the state, other than that they can shut their government down tomorrow and I could not care less. That's about how useful they are for me, other than my kid's education. When they start laying off teachers and cutting the quality of education, then that is a big deal, espeically when they are giving tax breaks for the rich. There are a million ways for them to raise the cash, Texas has a huge economy without giving everything away to the rich.

But as I said, I really don't care, I don't expect much, and I still pretty much expect them to be butt wipes for the rich. But I want them to leave my kid's education alone. That I do care about. I don't want that point to be "ignored," BTA.

 

That's not really how it works in business, BTA. While that sounds reasonable and it is true to an extent, the hope is that the customer will spring for anther item that has more profit it in. Do you believe these corporate guys would really be satisfied with less profit on more sales, BTA? THOSE guys I do know well.

Here's more about the strategy:

http://en.wikipedia.org/wiki/Loss_leader

 

That would mean that they would be willing to buy another item here in Texas at a higher tax rate. Or would they [the state] just keep lowering the tax rate on other items to get them to buy here? Doesn't sound like much profit in that to me.

Running the state like a business raises some interesting points though.....

 

It's very low tax, but also very low service. I think it is great if there are people who take advantage of state programs, but really if it were like a business it is a level of "management," - mid-level management - that I would cut completely, giving more power and money to local, city and county governments. Each community would be run as it sees fit. As Ragusa pointed out, "a race to the bottom will get you to the bottom" - low taxes are great but who wants to live in a community where services are sub par, where citizens have no rights?

 

This all presumes that Texas is losing money over the higher taxes compared to Florida. The question is, is it - and how much? I'm not sure it's killing their harbors, to be honest.

 

I would have to think that most people with enough money to purchase a quarter of a million dollar yacht would not be put off by paying another 6% or so in sales tax. Are there really people out there saying, "Sure, I'd pay $250,000, but with that sales tax taking the cost all the way up to $265,000... Nope - there's no way I can afford that."

 

They didn't get rich by being stupid.

 

Yes, but there is also the practical matter of geography. A person living in Boston can get to a port in Rhode Island in a short trip. If you live in Houston, going to New Orleans is a long ride or a flight, and a much larger PITA.