Spinning the Economy

If you listen to the economic reports from the Bush administration, everything is coming up roses. It is hard to figure out the bases of the upbeat reports when you read the economic news. Last month's job creation was revised downward from 150,000 to 32,000. Whoops. Which matches well with the $55.8 billion record trade gap for the US. Exports fell 4.3% , which is the largest drop since September of 2001. Still Bush supports his economic policies, and mulls shifting to a national sales tax

Thanks to MaxSpeak, I learned of an interesting analysis of a national sales tax possibility - A Note on the Required Tax Rate in a National Retail Sales Tax: Preliminary Estimates for 2005-2014 by William Gale, an economist for the Brookings Institution. According to Gale's analysis, it would take a 26% sales tax to replace income tax revenue, and a 60% tax to replace all tax revenue. Well that sounds like a winning proposal. If you bought a $2.00 loaf of bread, it would cost you $3.20 with tax. All that, and we still wouldn't have a national health plan.

The impact of the current Bush initiatives have had their intended consequences of making life easier for those at the top of the economic spectrum. According to a Congressional Budget Office Report,

Since 2001, President Bush's tax cuts have shifted federal tax payments from the richest Americans to a wide swath of middle-class families...

Of course, states and cities have been feeling the crunch as well so it should be no surprise that Many Local Officials Now Make Inmates Pay Their Own Way.

To help cover the costs of incarceration, corrections officers and politicians are more frequently billing inmates for their room and board, an idea popular with voters.

Here in suburban Macomb County, 25 miles north of Detroit, Sheriff Mark Hackel has one of the most successful of these programs in the nation. Last year, the sheriff's department collected nearly $1.5 million in what are being called "pay to stay" fees from many of the 22,000 people who spent time in the county jail.

Inmates are billed for room and board on a sliding scale of $8 to $56 a day, depending on ability to pay. When they are released, the sheriff's office will go to court to collect the unpaid bills, seizing cars or putting some inmates back in jail. The wife of one inmate, a Chrysler truck factory worker who is serving half a year for drunk driving, dropped off a check for $7,212 this week to cover part of his bill, the largest single amount ever collected by the sheriff.

Given the effectiveness of the Bush team's economic policies, perhaps a national sales tax will be pitched - not to replace other income and revenue taxes, but to supplement it. In keeping with the favoritism to what Bush refers to as "his base," luxury items would certainly be kept off the tax rolls, just as the gift of decreasing capital gains taxes has padded a few pockets.

Yep, things are definitely looking up.

Other Articles of Interest
7/30/04 Henderson, Wa. Post, Economic Growth Weaker Than Expected

7/31/04 Milbank, Wa. Post, White House Predicts 2004 Deficit Of $445 Billion -- the Biggest Ever

8/06/04 Henderson, Wa. Post, Payroll Growth Slows Dramatically in July

Posted by rowan at August 13, 2004 6:54 AM | TrackBack | [eMail this article!] |