McCain Economics

I'm actually for raising taxes at the pump. Higher prices really doesn't deviate demand for gas that much, and it's a great way to raise revenue. I would much rather see McCain talking about cutting corporate taxes and taxes on capital than on goods such as gasoline. People can b**** about the price of gas all day long, but they still fill up their tanks. Just another example of McCain's populist attitude.

 

I think McCain is just trying to be politically popular.

If paying .18c per gallons in taxes (is it really that low?) will lead to a person losing their house and not being able to do a chapter 13, are they really going to make it. Even if they burn 216 gallons a month (50 per week) that is only 38 dollars/ month.

To reduce the need for bankruptcy we will have to start thinking of things to support the working class like supporting unions, higher minimum wages that lift all boats, tax increases for the wealthy to pay for such things as , reduced tuition for public colleges, national health so that medical expenses don't eat them up, regulations on predatory lenders including mortgages and credit cards etc.

 

In Chapter 13, you have to pay all of your disposable income (income less reasonable household expenses) to the trustee. If the budget is that tight, a fuel increase of $35 to $40 monthly plus the increases in the price of food as a result of higher fuel can easily bust the plan. My primary concern is for existing cases, where I am already seeing people who faithfully paid the trustee for over a year and all of a sudden, with no change in employment, are no longer able to do so. These cases will end up getting dismissed, and the mortgage company will foreclose.

Of course, those things are also inflationary. The real economic benefit to the economy at large is nominal, if there is any benefit at all.

 

That's <b>why</b> you raise taxes on gasoline. It is a necessity, so price won't change the need for it. All price changes, changed the demand level, but each individual product has a different deviation. We should tax goods with a lower deviation at a much higher rate, than goods that vary greatly with a change in price.


It's certainly not a way to make many friends, but it's a better way for economic growth. I would rather be right, than popular.

 

How does taxing people to starvation increase economic growth?

Another way to go is to cut subsidies to farmers. Since crop prices have skyrocketed, those subsidies shouldn't be nearly as important. That would reduce food prices AND save the government money.

 

The problem with a gas-tax "summer holiday" is the reality of what happens when summer ends. If gas prices are still high, you have to jack up prices even more. It becomes a political tool in an election season - the same as how Bush's tax cuts were designed. If he really wanted them to be permanent, why not do it in the first place instead of making them expire, conveniently, in 2010 when he's no longer in office? With the gas tax, if you permanently cut it, then you're going to end up not maintaining an already weak national road infrastructure.

 

It's about taxing consumption vs taxes on capital. I agree we should cut subsidies and tariffs on food prices.

I was referring to taxes on capital slow down economic growth than do taxes on goods such as food/gas.

 

The problem is that gasoline is needed to deliver all other goods and services to market. The price of all of these things will increase.

Good job Rule0001...you just injected needless inflation into an already shaky economy.

I am very glad that you aren't running the Fed.

 

Your're former Fed chairman was also a fan of the pigou club. Core inflation shows that inflation isn't out of control as the CPI indicates. I really could care less about inflation right now, GDP growth is far more critical. I'll gladly sacrifice slightly higher inflation.


Also the Fed would have nothing to do with raising or decreasing tax prices??? It's the Fed's job to watch prices and control the supply of money, while the governments job is to stimulate growth.

 

I'm not sure if national health care is inflationary. It might save money and not be inflationary. Higher taxes on the upper class used to decrease college costs do not strike me as inflationary.

Changes should be made to the bankruptcy bill. I know that is a long battle.

How long is the typical payment plan for Chapter 13?

Maybe a sales tax rebate,or even payroll tax rebate? A ban on foreclosures? I don't think we should encourage more gasoline use as we know that increased demand will lead to inflation.

 

The problem with looking at core inflatoin instead of all inflation is that it only works if energy/food costs are generally controlled. We look at core because energy/food goes up and down all the time. But if energy and food prices are only going up and not down, then you can't just look at core inflation any more.

 

No, but an increase in minimum wage will result in either higher prices or fewer workers being hired at the higher rate. If you artificially disturb equilibrium in the labor market, it will adjust somehow.

That is the sad thing. It doesn't have to be. There were changes to the Code on the Senate floor, passed by the House, to amend the Code to deal with foreclosures by allowing bankruptcy judges to set a reasonable interest rate during the pendency of the Chapter 13 plan. I believe that judges would have set it at prime rate plus 1% to 3%.

By statute, a Chapter 13 plan is to be for a period of at least 36 months, but not to exceed 60 months. During this time, the trustee pays the ongoing mortgage payment, arrears to the mortgage company, the entire balance due on any vehicles, about 80% of the attorney's fee for the debtor's attorney, priority amounts due the IRS and back child support, and whatever percentage to general unsecured creditors the means test indicates must be paid or the stated budget shows is feasible, whichever is greater. The remaining balance of the unsecured debt is discharged upon plan completion.
Imagine how much easier this would be for people had the amendment passed and the mortgage payment dropped.

I believe this to be a bad idea for two reasons:
1. It likely is not Constitutionally permissible under the Contracts Clause.
2. It is not a good idea to allow people to live in their homes without paying anything on the mortgage indefinitely.