1 of 1
Give it a rest, Mark! Vis-a-vis your Sept. 4 article, "Budget deficits: This stuff isn't rocket science," the U.S. is well beyond an era where tax policy matters, or perhaps taxes at all. If the Treasury were to tax all income and corporate profits, we are still in deficit. It's over, whether one subscribes to U.S. unfunded liabilities levels of $100 trillion or $200 trillion.
If tax policy did matter, a few points. First, the "tax cuts for the rich/trickle down" argument is a static one in a dynamic world. Hence, a tax cut much like the recent stimulus is effective only when people put capital to work. Currently, neither tax cuts nor money-printing stimulus seems to work as the American people are attempting to de-leverage. Logically, I would say. Work though it does to levitate the stock and bond markets.
Another dynamic in play, the U.S. money system, is debt-based. Money is debt and debt is money. Include within this equation the effects of compound interest, and inevitably the debt levels become inextinguishable, perpetua, and parabolic. We are in this zone, which will become more obvious once artificially low interest rates normalize. They're artificial in that "they" would have us believe we are experiencing peak treasury bond/note supply due to deficits and peak demand at the same time.
An aside: Speaking of parabolic, the student loan debt levels are currently going parabolic, within Martinez's chosen vocation. He has a front-row seat. One day soon, banks will start repossessing master's degrees, I imagine. Meanwhile, the upshot noteworthy in the debt/tax matter is whether debt drives the cost of education or the cost of education drives debt. It's the former.
More dynamics: A tax increase cannot occur for the "wealthy" without a reaction. I could envision more tax lawyers and their utter nonproductive contribution to the economy or society as well as more offshore activities, also non-contributive.
Martinez, in his discussion, also leaves the expenditure side of the federal budget undisturbed. Reduced to an oversimplified either/or, the state lives within its means or taxes and prints and borrows to meet its expenditure wishes and wants. Weave into this the constitutional vision, my opinion, that our system categorically disallows the taking of property from a citizen to give to others and I cannot fathom how we got to this point. A government of the state, by the state, and for the state, sounds like several isms I can think of, classic liberalism not being one of them. Albert Jay Nock said it well: "It is easier to seize wealth than produce it."
Martinez likewise fails to mention the most heinous, hideous tax of all -- the debasement of our currency. Since 1971, a formal gold backing default of foreign holdings of U.S. Treasurys, the purchasing power of our dollar has diminished by approximately 80 percent, give or take. Casual students of inflation recognize that the closer one is to the source of the inflation -- think the money issuer and wholesale money handlers -- the greater the benefit of inflation. (See my stock market levitation comment above.) And, the further from the source -- think retired and low income -- the greatest detriment. What if Martinez got his wish, higher taxes for the rich? Two things remain. One, we the people continue to struggle under an even more complex set of tax laws that should be pulled out at the root. And, two, we still have major corruption at the highest levels. As spoken by author Chris Hedges, Americans have "no way to vote against the interests of Goldman Sachs" (exception: Gary Johnson or Ron Paul). For that matter, how does a nation expect voters that receive some stipend from the state to cast their vote?
In summary, Martinez's view is merely a rehash of a Republican vs. Democratic argument. Needed is fresh thinking beyond these professional wrestling, good cop-bad cop discussions. Much, need I mention, is at stake.
Andrew Wahrenbrock of Bakersfield is an investment counselor. Another View presents a critical response to a previous editorial, column or news story.