Monday, November 16, 2015

On Ben Carson's Misunderstanding Of What GDP Represents

Note: This commentary concerns the 3rd Republican Party presidential debate, which was held on 10/28/2015 in Boulder at the University of Colorado.

During the debate Ben Carson discussed his tax plan (which involves abolishing the IRS) and replacing it with a "tithing" system. Because, according to Carson, "I think God is a pretty fair guy".

But Carson's tax plan is just another example of how he doesn't understand economics (among a plethora of things we SHOULD expect a person who is QUALIFIED to be president to know).

Ben Carson: If you talk about an $18 trillion economy, you are talking about a 15 percent tax on your gross domestic product [GDP], you are talking about $2.7 trillion. We have a budget closer to $3.5 trillion. But if you also apply that same 15 percent to several other things, including corporate taxes and including the capital gains taxes, you make that amount up pretty quickly. So that's not, by any stretch, pie in the sky. (Does Ben Carson's tithe-based tax plan lead to a $1 trillion hole? by Linda Qiu. PolitiFact 11/4/2008).

The answer to the question "does Ben Carson's tithe-based tax plan lead to a $1 trillion hole?" is YES, it does. And, that Carson speaks of how much revenue his tax plan would generate based on our 18 trillion dollar economy also shows he doesn't know what GDP represents.

Definition of Gross Domestic Product: GDP is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. GDP is usually calculated on an annual basis... GDP includes all private and public consumption, government outlays, investments and exports minus imports that occur within a defined territory. Put simply, GDP is a broad measurement of a nation's overall economic activity.

The PolitiFact article quoted above also points out that there are other portions of our GDP beside government spending that is currently untaxed.

[in addition to government spending] not all of GDP is taxable... To apply his rate to all $18 trillion, Carson would have to tax health insurance premiums, pensions... to name a few.

BTW, Carson wants to cut government spending by around 30 percent, which would reduce our GDP. As if taxing government spending made any sense, given the fact that it's money the government got by taxing.

Carson's tax plan is a total stretch and completely pie in the sky, as he bases it on taxing the ENTIRE economy which includes government spending! This guy might be quite smart when it comes to his area of expertise (neurosurgery), but when it comes to the areas of knowledge a president needs to possess, Carson displays not just a lack of knowledge, but pure idiocy.

SWTD Tags: 2016 Election, Ben Carson.

DSB #27

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