Author Topic: Stockman: Budget deal a 'joke and betrayal'  (Read 390 times)

0 Members and 1 Guest are viewing this topic.

Online mystery-ak

  • Owner
  • Administrator
  • Hero Member
  • ******
  • Posts: 250,331
Stockman: Budget deal a 'joke and betrayal'
« on: December 11, 2013, 09:09:38 PM »
http://www.cnbc.com/id/101265477/print

 CNBC.com | Wednesday, 11 Dec 2013 | 1:44 PM ET

House Republicans "capitulated" in agreeing to the two-year budget deal reached last night and left the country to deal with an unsustainable fiscal situation until the peak of the presidential primaries in 2015, when nothing will get done, former federal budget director David Stockman told CNBC on Wednesday.

"First, let's be clear—it's a joke and betrayal," Stockman, who served under President Ronald Reagan, said on "Squawk on the Street." "It's the final surrender of the House Republican leadership to Beltway politics and kicking the can and ignoring the budget monster that's hurtling down the road."

Stockman added that the budget deal means lawmakers would take a "two-year vacation" from dealing with the country's fiscal situation and revisit it in 2015 at around the same time as the Iowa straw polls. Without an incumbent in the presidential race, both political parties will be too busy to touch the budget, he said.



While some hailed the budget deal as a breakthrough in Washington's political gridlock, Stockman compared the accord to "kicking the can" into "low Earth orbit."

"There's plenty of room, but they're unwilling to make the tough choices," he said. "Now, I understand Democrats doing that. The only hope of getting our fiscal situation under control is if the House Republicans stand up. And they've totally capitulated."


The two-year deal averts deeper cuts to military spending, but Stockman said that's where lawmakers should have looked for savings. The U.S. no longer faces threats from developed countries and has been "fired as the world's policemen," he said.

Any meaningful changes to the budget wouldn't happen until nearly 2020 if lawmakers don't address them now, he said. Washington still has a chance to duel over the debt ceiling this February, however, and over unemployment benefits in the shorter term.


U.S. Rep. Chris Van Hollen, D-Md., said lawmakers should vote to extend unemployment benefits before their Dec. 31 deadline.

"The speaker is holding that up," Van Hollen said in an earlier "Squawk on the Street" interview. "He's making that very clear."

Support the USO

Offline Rapunzel

  • Hero Member
  • ****
  • Posts: 71,719
Re: Stockman: Budget deal a 'joke and betrayal'
« Reply #1 on: December 11, 2013, 11:09:57 PM »
20% of the cost of an airline ticket goes to the Federal Government - General Fund.
“The time is now near at hand which must probably determine, whether Americans are to be, Freemen, or Slaves.” G Washington July 2, 1776

Offline Oceander

  • Technical
  • Hero Member
  • ****
  • Posts: 44,056
  • #ToldYouSo
Re: Stockman: Budget deal a 'joke and betrayal'
« Reply #2 on: December 11, 2013, 11:15:19 PM »
20% of the cost of an airline ticket goes to the Federal Government - General Fund.

So?  Standing in isolation that is neither a good thing nor a bad thing; it's simply a thing.

Offline sinkspur

  • Hero Member
  • ****
  • Posts: 28,599
Re: Stockman: Budget deal a 'joke and betrayal'
« Reply #3 on: December 11, 2013, 11:31:19 PM »
20% of the cost of an airline ticket goes to the Federal Government - General Fund.

Where does that stat come from?
From  "A Shining City on a Hill"

To "A global laughingstock"

Offline Rapunzel

  • Hero Member
  • ****
  • Posts: 71,719
Re: Stockman: Budget deal a 'joke and betrayal'
« Reply #4 on: December 11, 2013, 11:38:33 PM »
Where does that stat come from?



http://www.politifact.com/wisconsin/statements/2013/mar/17/gary-kelly/southwest-airlines-ceo-says-federal-taxes-flight-a/

Taxes and fees amount to about 20 percent of a typical $300 round-trip domestic ticket. That’s higher than taxes on products like alcohol, tobacco and firearms."

Southwest Airlines CEO says federal taxes on a flight are 20%, higher than sin and gun taxes

Kelly made his statement in a column he wrote for the February 2013 issues of the in-flight magazines of Southwest and of AirTran Airways, which Southwest acquired in 2011.

"Taxes and fees amount to about 20 percent of a typical $300 round-trip domestic ticket," he stated. "That’s higher than taxes on products like alcohol, tobacco and firearms."

With spring break around the corner, and alcohol, tobacco and firearms always in season, let’s see if Kelly’s claim takes flight.

Cost of an airline ticket

Kelly’s opinion column focused on federal taxes on airline tickets and other products. His source for the taxes on an airline ticket is Airlines for America, the trade group that advocates for the airline industry. It spent $6.37 million in federal lobbying in 2012, according to the nonpartisan OpenSecrets.org.

In December 2012, Airlines for America announced details of a campaign it would undertake in 2013 to persuade lawmakers to reduce federal taxes on airlines and take other steps to help the industry.

Just how high are those taxes?

Southwest Airlines spokesman Brad Hawkins used figures provided by Airlines for America to give a breakdown of the four major federal taxes and fees on a ticket with a base price of $300. His example includes one connecting flight each way -- in other words, a ticket that includes two flights on the departure segment of the trip and two flights on the return.
 
Type of tax    Amount    Total
Excise tax    7.5% x $300    $22.50
Segment fee    $3.90 x 4 segments    $15.60
Passenger facility charge    $4.50 x 4 segments    $18
TSA ("Sept. 11th") fee    $2.50 x 4 segments    $10
Grand total         $66.10
 

Based on Hawkins’ calculations, the $66.10 equals 22 percent of the cost of the $300 ticket, exceeding the 20 percent that Kelly claimed.

As for the size of the taxes and fees, we found a Federal Aviation Administration document confirming the excise tax and segment fee amounts; they help fund the FAA, which coordinates air traffic control and other aspects of the aviation system. (An excise tax is somewhat like a sales tax, in that it is paid on a purchase, but it’s often included in the purchase price.)

Another FAA document confirms the passenger facility charge, which is collected by public agencies that run commercial airports and is used for FAA-approved projects at the airports. And a Transportation Security Administration document confirms the Sept. 11 fee, which helps fund the TSA.

We ran Kelly’s statement and his itinerary by Joakim Karlsson, a researcher with the Airline Ticket Tax Project at the Massachusetts Institute of Technology; the project studies ticket taxes and user fees added directly to airline tickets. He called Kelly’s statement "mathematically correct, but fundamentally misleading."

Karlsson noted that fares are usually quoted with taxes and fees included. So, a $300 ticket would include a base fare of about $239.

Karlsson calculated that would trigger $61 in taxes and fees, which would still amount to 20 percent of the ticket cost, the same amount Kelly claimed.

But more importantly, Karlsson said, the sample ticket that Kelly uses is not typical:

    The typical domestic flight in the U.S. costs $418 (as of 2011), not $300.

    Two-thirds of all domestic tickets sold do not include connecting flights, but rather are non-stop, so they incur fewer federal fees.

So, a $418 non-stop ticket would include $54 in taxes and fees, or just under 15 percent of the total. (The taxes and fees in Kelly’s $300 ticket example, if the trip were non-stop, also would equal just under 15 percent.)

That means the first part of Kelly’s claim is accurate, but leaves out important details.

Taxes and fees on other products

As for the second part of Kelly’s statement, the Southwest Airlines spokesman cited a 2011 opinion column in The Wall Street Journal by the chief executive officer of Airlines for America, the airlines trade group. The column argued that the taxes paid by airlines are at the "same excessive levels" as "sin" taxes imposed on alcohol, tobacco and gambling.

But the column provided no figures to show how the various tax rates compare.

We found the following figures from the federal Alcohol and Tobacco Tax and Trade Bureau, a division of the Department of Treasury. They represent only the federal taxes on these products.
 
Product    Tax
Beer    5 cents per 12-ounce can
Wine    21 cents per 750-milliliter bottle
Distilled spirits    $2.14 (at 80 proof) per 750-milliliter bottle
Cigarettes    $1.01 per 20 cigarettes
Firearms    10%-11% of sale price
 

Some brands of beer cost more than others, some wine costs more in one part of the country than another, buying in bulk costs less, etc.

But, to consider some examples, if a:

    Six-pack of beer costs $6 at the store, 30 cents of that -- or 5 percent -- would be the federal tax.

    Bottle of wine costs $8, the 21-cent tax amounts to 2.6 percent.

    Bottle of 80-proof tequila costs $15, the tax is 14.3 percent.

    Pack of cigarettes costs $9, the tax would represent 11 percent of the cost; although if the pack cost $6, the tax would amount to nearly 17 percent of the cost.

None of this takes into account state and local taxes on the various products, but Kelly’s claim focuses on federal taxes.

So, the tax rate on an airline ticket -- whether it’s 20 percent, as in the example Kelly cited, or the more typical 15 percent as cited by the MIT program -- is generally higher than the federal tax rates on the other products Kelly cited. 

One might argue that taxes and fees on airline tickets, which help fund aviation operations, are fundamentally different from "sin" taxes on things like cigarettes, which are meant to hold down consumption. But that’s not an argument central to this claim.

Our rating

Kelly said: "Taxes and fees amount to about 20 percent of a typical $300 round-trip domestic ticket. That’s higher than taxes on products like alcohol, tobacco and firearms."

The first part of the claim is technically accurate, but misleading, given that the tax rate on a typical flight -- which costs more than $300 and doesn’t include connecting flights -- is 15 percent. The second part of the claim, although it doesn’t take into account price variations on various products, appears generally accurate.

On balance, since the thrust of the claim was which had more taxes and which had less, we rate the statement Mostly True.
“The time is now near at hand which must probably determine, whether Americans are to be, Freemen, or Slaves.” G Washington July 2, 1776

Offline Rapunzel

  • Hero Member
  • ****
  • Posts: 71,719
Re: Stockman: Budget deal a 'joke and betrayal'
« Reply #5 on: December 12, 2013, 12:02:33 AM »












“The time is now near at hand which must probably determine, whether Americans are to be, Freemen, or Slaves.” G Washington July 2, 1776

Offline olde north church

  • Hero Member
  • ****
  • Posts: 5,136
Re: Stockman: Budget deal a 'joke and betrayal'
« Reply #6 on: December 12, 2013, 06:29:26 AM »
Ya know, if these "business leaders" thought in terms of "all oxen are being gored" as opposed to "my ox is being gored", they might get movement in the correct direction.  Something about standing together or swinging alone?
Why?  Well, because I'm a bastard, that's why.

Offline MBB1984

  • Hero Member
  • ****
  • Posts: 853
Re: Stockman: Budget deal a 'joke and betrayal'
« Reply #7 on: December 12, 2013, 10:45:51 AM »
Stockman nails it.  In a time and crisis that cries out for leadership, the GOP lemmings are following Obama and Murray.  I pray this joke and betrayal fails, but there are too many Quislings in the House for it not to succeed.


Share me

Digg  Facebook  SlashDot  Delicious  Technorati  Twitter  Google  Yahoo
Smf