Monday, August 8, 2011

WSJ Wheels Out the Barro

As expected, the downgrade of U.S. debt by S&P has launched a flood of mainstream economists calling for more taxes as a solution to the crisis.

WSJ has posted a Harvard professor Robert Barro op-ed to soften up WSJ readers for another attempt at a VAT and assorted other taxes.

After proposing a complex "reform"  that will include tax cuts in some areas, only to be matched up against other "reforms" such as eliminating the tax deduction on mortgage interests and launching a tax on employee fringe benefits. Barro launches the heavy assault on your money:
...introduce a broad-based expenditure tax, such as a value-added tax (VAT), with a rate around 10%. The VAT's appeal to liberals can be enhanced, with some loss of economic efficiency, by exempting items such as food and housing.

I recognize that a VAT is anathema to many conservatives because it gives the government an added claim on revenues. My defense is that a VAT makes sense as part of a larger package...
Got that? His tax reform will include the elimination of mortgage interest deduction, a tax on any employee fringe benefits AND a 10% VAT on top of it all.

With "reform" like this, I'll stick with the current confusion as the better option.


  1. I make $100K per year and support five people including myself. My wife makes another $40K.

    I over 40 years old, work over 60 hours per week, hold down two jobs, and am the primary care provider for our children.

    With sales taxes, property taxes, licenses, FICA (all 15%), federal and state income taxes, my tax rate is 42%. Yet when the neighborhood is under siege by burglars (21 of 105 homes burglarized this year) we can get nothing from any level of government.

    If I choose to be responsible, nearly half of my life must be given away in return for... nothing.

    But if I quit working they'll give me a paycheck.

    Dr. Barro, is deluded. Considering the effor invovled in productivity, his ilk have already made working a net losing proposition.

    Why support my own enslavement? More particularly, how??? They can force the application of my muscle, but not the application of my expertise.

    Working under a higher tax rate is pointless. My life and energy also have value to me. Why sacrifice them for a pittance?

  2. This is stupid. These proposals are very damaging. Barro should know better than this.

    Government spending is out of control and must be cut, why is this so hard to recognize?

  3. I support VAT too. A VAT of TAR for Harvard professors with dumb ideas. Feather from the Congress - they have a nice supply of white ones.

  4. Anonymous (9:56 AM),

    You have no idea how USSR that sounds. I've been there - I've lived through it. I know what it feels like to work all week long and then turn it majority of it over to the government. I know what it means to ''stop working hard because it's pointless.'' I know what it feels to be afraid of Moscow (read: Washington).

    It will get much-much worse if nothing changes. If the American people do not stand up to the government, it will turn into something that you can't even imagine. It will soon be illegal to do something as simple as own a 'Ron Paul Revolution' T-shirt. Your neighbors will start telling on you because government is 'kind' to those who follow the law (sometimes your neighbors just lie because you parked your car half-way to their guest parking spot- but it doesn't matter - you still get fined or taken away and locked up).

    History is repeating itself all over again. Washington has already taken Lenin's advice on controlling people. Lenin said that the first step is to confuse the vocabulary. Check! People have no idea what capitalism stands for or what do these ''Spending cuts'' really mean. Increasing spending less than initially planned is now a cut as far as Average Joe is concerned.

    But no matter what happens, (Eastern) Europe will be with you. We will do our best to prevent it from happening again.. no matter where!

  5. And don't forget, Robert Barro is considered a "free-market" economist. The U.S. implosion can't be stopped. It's inevitable.

  6. We are all Europe now.
    The Borg Collective.
    People who work for a living are fools.

  7. A Harvard goof demanding that we be slaves of the state/him...How fascinating...err...Fascism-nating.