Math Savvy People Should Guide Federal Deficit Reduction

New reports are that President Obama will embrace his deficit commission’s strategy tomorrow evening when he addresses the nation.HopeTracker| No matter what Congress says, it’s downright challenging to have any respect for the bureaucrats. Huff Po says that part of the budget deal hashed out on Friday evening involved the agreement that no additional federal funds would be used to hire new tax collectors, even though the IRS can prove that $1 invested in the agent with a focus on luxury spenders can earn $10 in returned taxes.

Boehner Business Logic | Save $6 in Expenses to Lose $40 in Revenue

“Cutting back on IRS enforcement could easily cost the treasury much more in revenue than it saves,” said Chuck Marr, Director of Federal Tax Policy at the Center on Budget and Policy Priorities. John Boehner’s plan to cut the IRS budget by $600 million between now and September is projected to reduce federal revenues by $4 billion, according to IRS Commissioner Douglas Shulman, and reported by The New Republic.

Shulman says we will be able to tally the loss revenue immediately. Perhaps if this is an obvious error in fiscal logic, we can persuade the Republicans to get out their calculators and run the country through their math logic one more time.

I’ve been through the kind of tough cut decisions that Boehner talks about, running a $55 million business unit for Victoria’s Secret. Even in the great stock market plunge of 1987, I would not have tried to save $6 million, knowing that my revenue loss would be $40 million. Successful businesses aren’t run that way, and Warren Buffett and Bill Gates both will explain fiscal business reality to the House Speaker. Nor would the president of Victoria’s Secret have overriden me, insisting that I make the cut and God would take care of the lost revenue.

Republican Hate List: Taxes, Arithmetic, Science

If John Boehner can’t explain fiscal reality to his Tea Party constitutents — who are not ALL Americans, in spite of his saying so — he should get out the Ross Perot blackboard and give them a nationally-televised evening hour lesson in expenses vs revenue accounting.

Running two long-term wars with no accounting for their expenses in the Bush budget suggests that Republicans suffer every bit as much as Democrats when the subject is math.

Quite frankly, many of these people are the same ones who believe in Creationism. Science and math are not their strong suits. This is not me being a smart ass. These folks are on record saying that God made the world exactly as written in the Bible, and no amount of science will change reality.

Based on all the scientific evidence and archaelogical excavations that refute Creationism (not even embraced by the Vatican anymore), I can imagine that complicated business arithmetic is also difficult to digest. 

$330 Billion of Unpaid Taxes

The subject of the IRS budget gets worse.

Get your zeroes right here my dears: yesterday the Government Accountability Office released a study showing that, as of the end of fiscal year 2010, roughly $330 billion in federal taxes had never been paid.

While Congress is busy trying to shut down Planned Parenthood and balance the budget on the backs of America’s poor people, John Boehner and his buddies have no interest in making the rich pay taxes. It’s positively unAmerican to pay your tax bill, whatever passport you’re holding.

The GAO report, which looks specifically at the issue of passport holders who have failed to pay their full share of taxes, underscores Marr’s point. Titled “Federal Tax Collection: Potential for Using Passport Issuance to Increase Collection of Unpaid Taxes,” the study labels poor enforcement of tax laws and the tax code as a “high-risk” hole in government policy. In fiscal year 2008, passports were issued to about 16 million individuals. Of those, more than 224,000 owed more than $5.8 billion in unpaid federal taxes.

These folks aren’t illegal immigrants. They are GOP campaign contributors most likely, so they probably don’t have to pay their taxes. The situation in Washington is so out of control, it defies description. How can Republican leaders keep a straight face, look in the TV cameras and talk fiscal responsibility when they refuse to invest in the personpower to collect 1/3 of a trillion dollars in from tax cheaters, who are easily traced?

Reading the Republican pundits, they use words like ‘IRS shakedown’ to describe making people pay owed taxes.  Once again, American men (who cheat at twice the rate of American women) argue they are above the law, taxes are too hgh and they’re just not going to pay them — when tax rates haven’t been this low since the Eisenhower years, according to President Obama.

The St Petersburg Times fact checker combs that assertion, giving readers a pretty thorough analysis of the truth of the assertion. They give Obama’s assertion a True against Eisenhower on the subject of tax rates today. On the subject of President Regan, for one year the top rate was lower, but for seven years under Reagan it was higher. continues, examining tax rates from a second perspective, one called tax burden. This analysis examines the totality of taxation, not just income taxes.

There is another way — calculating all taxes paid by Americans and dividing the sum by the nation’s total income. To make this calculation, we turned to the Tax Foundation’s annual “Tax Freedom Day” report, which offers calculations of total tax burden going back to 1900. (There was no federal income tax then, but there were state and other taxes.)

The foundation’s expected tax burden for 2010 is 26.9 percent, up slightly from the 2009 tax burden of 26.6 percent. (This is not unusual: The tax burden typically falls during recessions, as taxpayers move to lower tax brackets.)

Under Eisenhower, that figure ranged from 24.8 percent to 27.7 percent, with the figure lower than 26.9 percent for seven out of eight years. So by this measurement, the tax burden was lower most of the time under Eisenhower.

Under Reagan, it ranged from 29.2 percent to 31.1 percent, meaning that in all eight years it was higher than the current tax burden under Obama.

Conservatives argue that the tax rates now are Bush tax rates, not Obama tax rates. Obama wants to raise them, argue Conservatives. They do not mention that staggering reallocation of wealth in America, one suggesting that the very top tier of Americans have way more money than they used to and can afford a tax increase.

President Reagan’s budget director David Stockman makes sense with much of his analysis, and he supports means testing for entitlement programs and a host of other ideas that Congressional Repubicans hate. Former Republican Senate Whip Alan Simpson, also a member of President Obama’s Federal Deficit Commission, says the pain of reform must be shared.

Yesterday the Wall Street Journal looked at tax policy in an article Obama Puts Taxes on Table. This is their deficit projection based on current tax policy.

In a late-breaking post, reports are that President Obama will embrace his deficit commission’s report tomorrow night. The blue-ribbon deficit commission – led by Erskine Bowles, President Bill Clinton’s budget negotiator, and former Republican Senator Alan Simpson – detailed its agenda for getting federal revenues and spending into balance, capping both at 21 percent of GDP over the next 25 years [PDF]. I have followed the commission in great detail and embrace the idea that because of the credentials and bi-partisan nature of the commission, they make sound arguments about hot to approach America’s deficit problems.

In summary, I am generally stupified over the American mindset today. Just stupified.  Anne