Archive for Friday, September 3, 2010

More Democrats express wish to extend tax cuts for rich

September 3, 2010

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A look at potential tax increases

A look at potential tax increases

The most sweeping tax cuts in a generation are due to expire at the end of the year. Congress is set to take up the issue this month. If Congress does nothing, families at every income level face tax increases next year.

2011 Income Number of tax returns Average tax increase

Less than $10,000 28,681,000 $70

$10,000 to $20,000 24,383,000 $410

$20,000 to $30,000 18,523,000 $756

$30,000 to $40,000 15,679,000 $893

$40,000 to $50,000 13,001,000 $923

$50,000 to $75,000 23,972,000 $1,126

$75,000 to $100,000 15,245,000 $1,837

$100,000 to $200,000 16,885,000 $3,672

$200,000 to $500,000 3,757,000 $7,187

$500,000 to $1 million 608,000 $18,092

$1 million and over 315,000 $101,587

Source: Joint Committee on Taxation

— Congress seems increasingly reluctant to let taxes go up, even on wealthier Americans.

Worried about the fragile economy and their own upcoming elections, a growing number of Democrats are joining the rock-solid Republican opposition to President Barack Obama’s plans to let some of the Bush administration’s tax cuts expire.

Democratic leaders in Congress still back Obama, but the willingness to raise taxes is waning among the rank and file as the stagnant economy threatens the party’s majority in the House and Senate.

“In my view this is no time to do anything that could be jarring to a fragile recovery,” said Rep. Gerry Connolly of Virginia, a first-term Democrat.

The pushback on tax increases comes as lawmakers and the Obama administration consider ways to boost the economy and increase the speed of an anemic recovery. Along with tax cuts for middle- and low-income families, Obama said this week that he would soon be proposing new measures to grow the economy and encourage hiring, including additional business tax cuts.

White House press secretary Robert Gibbs said Thursday that there wouldn’t be another big stimulus bill, but he declined to say what options Obama’s economic team was considering, including whether a temporary payroll tax holiday for businesses was on the table. The White House has said it was open to that idea in the past.

The most sweeping tax cuts in a generation are due to expire in January, and that’s setting up a showdown when lawmakers return from their summer vacations this month. By waiting to act on the tax cuts until just before congressional elections in November, Democratic leaders have raised the stakes, politically and for taxpayers.

If Congress fails to act — a possibility given the gridlock that has gripped the Senate — workers at every income level would face significant tax increases next year.

Taxpayers making between $40,000 and $50,000 a year would get hit with an average income tax increase of $923 next year. Those making between $50,000 and $75,000 would face an average increase of $1,126, according to estimates by the nonpartisan Joint Committee on Taxation.

Obama wants to make the tax cuts permanent for middle- and low-income families while allowing them to expire for individuals making more than $200,000 and married couples making more than $250,000.

Republicans want to make all the tax cuts permanent, adding nearly $4 trillion to the national debt over the next decade. Most Democrats in Congress support Obama’s plan, but a growing number have come out in favor of extending all the reductions for a year or two, leaving the outcome very much in doubt.

“It’s going to be hard to resist a one-year extension for everybody, given the state of the economy,” said Clint Stretch, a tax expert at the consulting firm Deloitte Tax LLP. “That’s where I think the ball is moving.”

The tax cuts were enacted in 2001 and 2003 under President George W. Bush. They provided help for both rich and poor, reducing the lowest marginal rates as well as the top ones and several in between. They also provided a wide range of income tax breaks for education, families with children and married couples.

Taxes on capital gains and dividends were reduced, while the federal estate tax was gradually repealed, though only through this year.

Connolly said the nation cannot afford to make all the tax cuts permanent, which would add about $3.9 trillion to the national debt over the next decade according to updated estimates from the nonpartisan Congressional Budget Office.

“I would say certainly a year, until we feel more confident about the economic growth of this economy,” he said.

Another freshman Democrat, Rep. Bobby Bright of Alabama, said he would like to see all the tax cuts extended for two or three years, if lawmakers cannot agree on a more permanent plan.

“Party leaders are not my directors or my boss,” Bright said. “My boss is my constituents, and I’ve heard from a vast majority of my constituents that they don’t believe in tax increases on anybody at this point in time.”

Bright is high on the re-election endangered list, one of roughly four dozen Democrats in districts won by Republican presidential nominee John McCain in 2008.

In the Senate, where Democrats need unity and at least one Republican vote to overcome filibusters, at least three Democrats and independent Joe Lieberman of Connecticut have said they want to extend all the tax cuts temporarily.

Several Democratic candidates for Senate have also come out in favor of extending them all, including Robin Carnahan in Missouri and Jack Conway in Kentucky.

Comments

Tom Shewmon 4 years, 11 months ago

Translation: They want to keep their jobs.

jafs 4 years, 11 months ago

Hey, that's exactly what I thought!

KUnlv13 4 years, 11 months ago

More like: They want to keep THEIR cash...

geekyhost 4 years, 11 months ago

It's a stupid way to go about it, since Republicans won't vote for them either way, and most Americans think keeping the tax cuts is a stupid idea, so even dems in conservative districts would be idiotic to support this.

oldvet 4 years, 11 months ago

What's with that tax table... why, when the Bush tax cuts expire, all people who make less than $200K will see their taxes go up... obama lies!!!

jafs 4 years, 11 months ago

Read it again - that's if Congress does nothing.

Obama is promoting the idea of leaving the cuts in place for those making less than $200,000/yr and eliminating it above that level.

oldvet 4 years, 11 months ago

Benjamin Franklin said "Well done is better than well said." So far, obama has done nothing about this... and when the Bush cuts expire, everybody gets taxed more. So far, obama lies !!!

jafs 4 years, 11 months ago

If he can't convince Congress to pass legislation, it's not his fault.

It's the fault of Congress.

The President doesn't pass legislation.

jafs 4 years, 10 months ago

Without a filibuster proof majority.

thusspokezarathustra 4 years, 11 months ago

Since the Tax Cuts haven't expired yet how could Obama have already lied about it? That is a temporal impossibility. So far, oldvet lies!!!

oldvet 4 years, 11 months ago

Must break your heart when your boy's failings are so obvious...

jafs 4 years, 11 months ago

No failings.

He campaigned on allowing the cuts to expire for the rich, and continuing to help the middle class, which is exactly what he's trying to do.

geekyhost 4 years, 11 months ago

It's a lie if he does exactly what he campaigned to do?

Richard Heckler 4 years, 11 months ago

Economically, repeal would cut $700 billion off the federal deficit over the next decade.

Nobody wants to repeal George Bush's tax cuts for the middle class. Especially in a bad economy, this is a no-brainer, both politically and economically.

But what about tax cuts for high earners? This should be an easy question to answer, too. On the political side, a CBS poll earlier this week found that repeal is supported by 56% and opposed by only 36%.

Economically, repeal would cut $700 billion off the federal deficit over the next decade and, because consumption by the wealthy doesn't depend very much on small changes in income, it wouldn't noticeably affect consumer spending, either.

Allowing tax rates on the rich to rise back to their pre-Bush levels, therefore, should also be a no-brainer, both politically and economically.

More details: http://motherjones.com/kevin-drum/2010/09/repeal-bush-tax-cuts-for-wealthy

madameX 4 years, 11 months ago

Consumer spending is part of the equation though. Somewhere along the line someone has to consume whatever is being produced with that increased capacity. It's a bigger part of the equation than it should be, IMO, but it's still a part.

Besides, the more important point is that giving the wealthy more money to spend, save, invest or whatever isn't likely to have much impact on the economy because the wealthy already have the means to do what they want to financially, whereas there are more people among the less wealthy who would spend or save or invest if given the means thus having a bigger impact.

jafs 4 years, 11 months ago

Agreed.

"Bottom-up" works better than "top-down".

madameX 4 years, 11 months ago

I don't disagree that the real way to grow the economy is through investment and savings, but the value of increased productivity is that what you have produced will be consumed by someone at some point, for a price, otherwise what is the point of producing? That's why I say that consumer spending has to be part of the equation. I totally disagree that supply drives demand; supply can drive demand, but demand can also drive supply and there can also be some combination of the two, it depends on the situation; I'm not sure where the idea that there's only one rigid law governing this is coming from.

I also disagree that the impact of a dollar is the same whether it's in the hands of a rich person or a poor person. Maybe in the broadest, most macro sense that's true, but I'm to talking about the broadest, most macro sense, I'm talking about in the current economic situation. The impact of a dollar lies in what that person does with it; I'm arguing that the poor person is more likely do something with that dollar that gets it back out into circulation because the likelihood is that the poor person has more immediate places to put that dollar. Again, maybe the long term effect is not significant, but I'm talking about what's needed right now.

madameX 4 years, 11 months ago

I only skimmed, but I'm pretty sure I'm in disagreement with Say. If I"m reading right according to him there would be no such thing as cutting production of a given product in response to lowered demand, but doesn't that happen all the time? You're even pointing out that the supply of housing-related business has outstripped demand and should effectively be lowered by market forces. I don't disagree with that but doesn't that directly contradict Say?

I think you're misunderstanding what I mean when referring to why we should do what is needed in the short term. I'm not talking about propping up the economy for now and worrying about the future when it happens; I agree with most of what you've said about long term solutions. I don't think an economy that's based on making sure that everyone wants to buy the latest I-Phone that's made in China on credit is sustainible. My problem with not addressing the short term is that we seem to be in a bit of a catch 22 situation: The people who have control over large amounts of money to invest are for the most part not doing anything with it becuase the economy is bad, but the economy continues to be bad because the people who have control over large amounts of money to invest aren't doing anything with it. And why would they, they have what they need, why would they risk it? I don't like that they're not doing it, but I can see why they are. Something has to happen to get the ball rolling in the short term if we're going to have what need for the long term, that's all I'm trying to say.

madameX 4 years, 11 months ago

"Not of a given product, but production in general isn't affected by a shortfall in aggregate, or total, demand."

I'm skeptical of this. I just don't see how if could be that if producers in general respond to a decrease in demand by reducing production then somehow production hasn't been affected? This is turning into the whole "God exists because it's impossible for God not to exist." part of my philosophy of religion class. I feel like either there's some logical premise that's missing from the argument or the conclusion is flat out wrong.

Agree to disagree on the need for short term solutions, I guess. I'm sure the economy would recover on its own eventually, but I don't see the point of letting it drag out if it can be made to happen faster and I don't see the point of making people suffer unnecessarily.

And now I'm going home. Have a good weekend.

notajayhawk 4 years, 11 months ago

"On the political side, a CBS poll earlier this week found that repeal is supported by 56% and opposed by only 36%. "

Wow. You mean most of the people surveyed favor taking money from someone else? What an unexpected result.

Democracy: Five jackals and a gazelle voting on what's for dinner.

You're right about two things, mertle: It was an easy question, and those without brains think it's a good idea to raise taxes.

gl0ck0wn3r 4 years, 11 months ago

Riiiiiight.

http://blogs.wsj.com/wealth/2010/08/27/rich-are-more-sensitive-to-tax-increases-today-zandi-says/

"Why are they sensitive? Let us recall the data Mr. Zandi crunched for the Wealth Report earlier this month. It showed that the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments. That is nearly equal to the outlays of the bottom 80% of Americans."

BorderRuffian 4 years, 11 months ago

No we can't! No we can't! - spend more and lower the taxes for the wealthy. No we can't! - spend more and lower taxes for the middle class No we can't! - spend more and lower the taxes for the poor. No we can't! - spread out the wealth to those who don't work while everyone else does No we can't! - afford this miserable excuse of a president! No we can't! - afford to put politicians' own self-interests above the needs of our nation No we can't! - afford to put party politics over working together to fix our problems No we can't

Cait McKnelly 4 years, 11 months ago

No we can't! - afford to put politicians' own self-interests above the needs of our nation No we can't! - afford to put party politics over working together to fix our problems

Do that and everything else will take care of itself.

grammaddy 4 years, 11 months ago

Let the tax breaks for those making over $200,000 expire.Cut the $700 billion from the deficit.Why would any of you so-called fiscal conservatives gripe about that?

Scott Drummond 4 years, 11 months ago

Funny, when Wall Street executives needed george bush and the republicans to bail them out so that outrageous bonuses could be paid there was no hue and cry about plundering fellow Americans.

I say the President offers the righties a "bipartisan" opportunity. Cut the deficit by either cutting the Pentagon budget by $700 billion or accepting the need to return tax rates for the very rich to pre-bush levels (i.e. the last time the economy was good.)

And just in case anyone forgets, the right wingers achieved these tax cuts by saying they were needed to spur job creation and the economy. That never happened.

Scott Drummond 4 years, 11 months ago

On TARP, what I meant, but stated inartfully, was that many of the right wingers who now are up in arms about the expiration of the bush tax cuts, were quite willing to benefit from or support the plunder of public funds to the largely right wing Wall Street interests.

Never claimed you were a right winger, what I said was the President should offer the righties a difficult choice.

Finallly, forgot to state that the bush tax cuts did achieve their desired objective. Starve the goverment so that a crisis could be created that required further destruction of our society and increased opportunity for plunder.

Scott Drummond 4 years, 11 months ago

On TARP, what I meant, but stated inartfully, was that many of the right wingers who now are up in arms about the expiration of the bush tax cuts, were quite willing to benefit from or support the plunder of public funds to the largely right wing Wall Street interests.

Never claimed you were a right winger, what I said was the President should offer the righties a difficult choice.

Finallly, forgot to state that the bush tax cuts did achieve their desired objective. Starve the goverment so that a crisis could be created that required further destruction of our society and increased opportunity for plunder.

Cait McKnelly 4 years, 11 months ago

Clinton left Bush a surplus. What happened to it? What did Bush do that made this country have a trillion dollar deficit when he left office? What can Obama do to fix it? Cut what spending? Say that in the next week you were all powerful in this country and given the reins to fix it. What budget cuts would you make?

notajayhawk 4 years, 11 months ago

"Why would any of you so-called fiscal conservatives gripe about that?"

Perhaps because spending more and more and more and taxing the bejeezus out of somebody else to pay for it isn't 'fiscal conservatism'?

Scott Drummond 4 years, 11 months ago

Strange, then, that gwb and crew spent 8 years doing that very thing. Bring our troops home and enjoy a peace dividend.

notajayhawk 4 years, 11 months ago

Ah, eddie chimes in with yet another example of talking out of both sides of his mouth. So the problem is what, eddie? You're saying now that Bush taxed the bejeezus out of everybody? I thought the problem was that he cut taxes?

Cait McKnelly 4 years, 11 months ago

See my comment above to Liberty One. I'm interested to see the same answer from you.

notajayhawk 4 years, 11 months ago

"Clinton left Bush a surplus. What happened to it?"

We had a war. Maybe you read about it. Not to mention, the dot-com boom turned into the dot-com bust.

"What did Bush do that made this country have a trillion dollar deficit when he left office?"

We had a war. Maybe you read about it.

"What can Obama do to fix it?"

Apparently nothing, since he's made it much worse.

"Cut what spending?"

Everything. Across the board. But start with no federal spending on anything that doesn't have a national benefit - no more pork.

"Say that in the next week you were all powerful in this country and given the reins to fix it. What budget cuts would you make?"

See above.

jafs 4 years, 11 months ago

Spending more and lowering taxes is also not "fiscal conservatism".

notajayhawk 4 years, 11 months ago

And nobody said it was. The common theme there, though, is spending. The problem is not on the revenue side.

jafs 4 years, 11 months ago

That's what Bush did - he spent more and lowered taxes.

He wasn't a fiscal conservative.

And he managed to cleverly not include the costs of the wars in the budget somehow.

notajayhawk 4 years, 11 months ago

And one MORE time: Nobody said he was. And yet one MORE time: The problem is the spending, regardless of your philosophy on the revenue side.

jafs 4 years, 11 months ago

The problem is the combination - if we have enough revenue to cover the spending, that's sustainable (although of course it would be nice to pay down the debt as well).

And many people seem hoodwinked by this notion that Republicans are the party of fiscal conservatives, despite the fact that they aren't really acting that way.

notajayhawk 4 years, 11 months ago

There are also, apparently, a lot of people who are hoodwinked into thinking all Republicans agreed with Bush's fiscal policies.

And the problem isn't the combination - it's the spending. A lot of Democrats seem to be hoodwinked into thinking that we can just keep spending and spending and spending as long as we just take in more and more and more money to pay for it. Sooner or later there are limits.

jafs 4 years, 11 months ago

It's not just Bush - no other administration in the last 35 years hasn't run budget deficits except for Clinton.

If the Republican party were really the party of fiscal conservatives, I would have expected to see balanced budgets during their administrations.

I think you're probably right about the limits - I don't want government spending to simply keep increasing either.

grammaddy 4 years, 11 months ago

Like the Regurgicans sucked the middle-class right out of existence?

notajayhawk 4 years, 11 months ago

The middle class did, indeed, get smaller.

They moved to the wealthy class. Try looking up the numbers.

notajayhawk 4 years, 11 months ago

"Taxpayers making between $40,000 and $50,000 a year would get hit with an average income tax increase of $923 next year. Those making between $50,000 and $75,000 would face an average increase of $1,126, according to estimates by the nonpartisan Joint Committee on Taxation."

How is that possible? All we've been hearing from the whining liberals is that Bush only cut taxes for the rich. You mean there were cuts for people at all income levels? You mean the liberals were lying? I'm shocked.

madameX 4 years, 11 months ago

Maybe you haven't been listening. Maybe your "whining liberals" understand perfectly well that there were tax cuts for people at all income levels but only take issue with the tax cuts for the rich because those are the ones that were a bad idea.

notajayhawk 4 years, 11 months ago

Maybe you haven't been reading too many comments on these message boards, if you think they understand perfectly well that there were tax cuts for people at all income levels. Seriously, are you new here?

As for the rest of your post, that's about typical for Lawrence: Taxes are okay, raise them all you want - but only on someone ELSE.

madameX 4 years, 11 months ago

Maybe I take pretty much everything I read on these message boards with a huge grain of salt and don't consider it to be representative of anyone but the person who posted it and therefore don't extrapolate from these comments what Americans as a whole do or don't understand.

As for the rest of it, well, if the tax cuts at the higher income levels were the ones that had the least amount of positive impact versus the amount of revenue lost then they were a bad idea. Personally I've never understood the belief that cutting taxes at the top will encourage people to earn more; people who want to get rich are going to try to get rich, taxes or no. They might complain about the taxes but I have a hard time believing that they'll just decide not to get as much as they can simply because they'll have to pay taxes on it.

I'd be saying the same thing if I was in one of the higher tax brackets but I'm not. It would not shock me to learn that you don't believe me but I would. I'm also young enough that I'll probably be around long enough to share the burden of paying off the deficit. I'd rather see it addressed now rather than later and raising revenue is probably going to be necessary in order to make that happen.

notajayhawk 4 years, 11 months ago

"and therefore don't extrapolate from these comments what Americans as a whole do or don't understand. "

Good to know. I wasn't talking about what "Americans as a whole" think, nor did I say I was.

"Personally I've never understood the belief that cutting taxes at the top will encourage people to earn more"

It has nothing to do with that. It does marginally reduce the incentive to earn more, but that's not the problem.

Consider two things:

1) Retail sales were up in August. The reason was the end-of-summer, back-to-school, pre-pre-Labor Day sale pricing. The prices on individual items was lower. That led to selling MORE of those items, enough to more than make up the difference lost due to the decreased individual prices. Of course, that can't be sustainable all the time ...

2) unless you're Sam Walton. Wal-mart was founded on a simple principle - if he set his prices to make only a third as much in profit on a single item as his competitors, he'd sell five times as many, and actually make a bigger profit overall. (His theory, in case you hadn't noticed, seems to have worked.)

How does that apply to tax revenue? It's the same basic principle - if you tax income at 20% instead of 35%, you end up with more people making, and then spending, more money. And that money, with now much more of it circulating through the economy, is being taxed at every step of the journey.

But an even bigger problem is that it's the rich who INVEST. They're the ones that have the money to invest in a new start-up business. They're the ones who can lend capital to a company that wants to expand, modernize, or automate their operations. (And they're the ones that have the disposable income to buy what the rest of us produce.) When that money gets taxed too much, and those companies can't expand/modernize/automate, everybody loses.

Jimo 4 years, 11 months ago

"Tax revenues actually increased with the tax cuts"

Damned filthy liar.

notajayhawk 4 years, 11 months ago

Damned filthy ignoramus. Those are the facts, jimmie, look them up for yourself.

If you had the guts to face the truth, that is.

thusspokezarathustra 4 years, 11 months ago

It was the disparity of the Tax cuts that is the issue for instance from the Urban-Brookings Tax Policy Center:

  • In 2004, the middle 20 percent of households will receive 8.9 percent of the tax cuts.
    • By contrast, millionaires — totaling just 0.2 percent of U.S. households — will receive 15.3 percent of the tax cuts. In other words, the small handful of millionaires will receive total tax cuts far larger than those received by the entire middle 20 percent of households.
    • The tax cuts will confer more than $30 billion on the nation’s 257,000 millionaires in 2004 alone.

imastinker 4 years, 11 months ago

All I know is that every fabrication and Machine shop I have been in lately is so slow they are having a hard time paying overhead and keeping the doors open. Several are down over 75% from where they were two years ago. The only one I know of that is busy is doing government work (capital improvement projects).

The rest of us non-union shops can't touch that work.

grammaddy 4 years, 11 months ago

Chances are a little bit better,now,since the un-funded war in Iraq is ending.

jafs 4 years, 11 months ago

Wow.

So the fact that he follows through on a campaign promise to bring the troops home from Iraq gets him no credit at all with you.

That's what I thought - you just don't like him, and it doesn't really matter what he does.

jafs 4 years, 11 months ago

What could Obama do that you would praise?

notajayhawk 4 years, 11 months ago

There's not much chance of balancing the budget next year. But in the long run, we stand a better chance of that happening if we expand investment, private sector jobs, and personal income than we do expanding the welfare state.

jafs 4 years, 11 months ago

Thank you.

Neither side seems able to balance the budget and stop running huge deficits each year, with the notable exception of Clinton's administration.

notajayhawk 4 years, 11 months ago

Got another dot-com boom in your pocket?

And you're right, neither side can balance a budget, because regardless of what policies the respective parties have for bringing revenue IN, none of them will do the hard part and cut spending.

BrianR 4 years, 11 months ago

The chance is zero. Reps spend as much as Dems, "Tax and Spend Democrats" is a marketing tool.

The bright side is, if the world ends in 2012 we won't have to pay taxes at all in 2013.

beatrice 4 years, 11 months ago

Did any of you catch the free-fall that was governor Jan Brewer of Arizona in the one and only debate she will hold before the upcoming election. This is here opening. Honest, it is worth the minute or so it takes to watch it. This one trick pony (SB1070) makes Sarah Palin look intelligent. Enjoy! http://www.youtube.com/watch?v=xUPKKb...

It doesn't have to do with this issue, except she is a Republican who lies about not wanting to raise taxes only after she strongly endorsed the one cent sale tax increase that was approved in AZ. Yep, politicians go against what they say they are for all the time.

grammaddy 4 years, 11 months ago

Popular with who? Not even in her own state.Another idiot just like Palin. I'd think that after the damage she did to the last election, you guys would have thrown her to the wolves by now.When will you idiots learn that women are not interchangeable.You can't throw just any woman out there.

thusspokezarathustra 4 years, 11 months ago

Tom you don't keep up. The Rasmussen poll you are citing is from August 30th and the debate was September 1st so her performance at the debate is not reflected in those numbers.

beatrice 4 years, 11 months ago

Oh, I see. If it had been a Democrat, the media would have forgotten all about it.

Two words: Howard Dean.

Practicality 4 years, 11 months ago

I think a television network needs to do a reality show on Joe Biden. Now that would be entertaining. I might not vote for him, but I would watch that show! Couldn't you see him on Survivor or Amazing Race or something?

Practicality 4 years, 11 months ago

LOL! I could see Bill Clinton on Jersey Shore as well.

notajayhawk 4 years, 11 months ago

"Your Leader Mitch McConnell says that it's OK to increase the deficit, in order to cut the taxes on the wealthiest 1%. "

One little problem, DPL: Tax revenues actually increased with the tax cuts. Just like they were supposed to. The deficit was caused by overspending, not under-collecting.

Jimo 4 years, 11 months ago

And yet no serious economist agrees with you that the crowing rooster causes the sun to rise. Hmmmm...... Your theory is something worthy of a Glenn Beck blackboard drawing, that is, some lame-ass proposal so absurd on its face that, while common sense screams 'male cow droppings'!, only the most irrational connection of one item to another times a hundred can lead to the assertion posited.

Tax cuts cost revenue. Period. There is NO debate on this point outside of wingnuttery. Stating otherwise makes you a liar. Period.

Overspending contributed to this revenue shortfall - a trillion wasted in Iraq, trillions more on weapons systems that no one needs or wants, trillions more on 'wealthfare', billions on 'security theatre' at the airport, billions more on a secretive security apparatus that doesn't even know what it's doing. After a while, those numbers add up - yet YOU continue to pound the table demanding that this spending continue ad infinitum while falsely claiming that refusing to collect taxes leads to more tax revenue!

Please stick to fooling the five year olds with your tricks.

notajayhawk 4 years, 11 months ago

"Tax cuts cost revenue. Period. There is NO debate on this point outside of wingnuttery. Stating otherwise makes you a liar. Period."

Coming from another loser who's swallowed the kool-aid and won't dare look up the numbers for himself because Keith Olberman said it was a lie.

Look it up, jimmie boy. Look up the actual revenues before and after the cuts. I'll wait.

I don't even mind that you call me a liar, since you obviously don't have the faintest idea what you're talking about, and aren't bright enough to do anything but be a parrot for the liberal line.

"yet YOU continue to pound the table demanding that this spending continue ad infinitum while falsely claiming that refusing to collect taxes leads to more tax revenue!"

Who's lying now, little boy? Or perhaps you'd like to find a single one of my posts where I demanded "that this spending continue ad infinitum" [sic]? As a matter of fact, if you could read as well as any five year old, you might have noticed I was demanding that the spending be cut. But then, to someone with both eyes, both ears, and apparently at least one orifice tightly shut, I wouldn't expect you to know that.

Thanks for playing, jimmie. The kiddie section is on another page.

Jimo 4 years, 11 months ago

WAITING! Name the reputable economist who supports your claim - tax cuts don't cost the government revenue.

Put up or shut UP!

You can't because they don't exist.

notajayhawk 4 years, 11 months ago

Wait! Answer my question first, little boy. After the cuts were enacted, did tax revenues go up, or down?

That's not economic theory, oh willfully blind one. That's fact. Look it up for yourself (of course you won't).

notajayhawk 4 years, 11 months ago

"Name the reputable economist who supports your claim - tax cuts don't cost the government revenue."

How about the Congressional Budget Office? Their analysis predicted that the cuts in the capital gains tax rates would increase capital gains revenues by 36%. Of course, they did turn out to be wrong - capital gains revenues doubled after the rates were cut.

Your turn, jimmie - let's see if your kool-aid soaked brain can answer two simple questions:

1) Which cost the government more in revenues (exclusive of the secondary gains), the so-called tax cuts for the 'rich' or the cuts for the rest of us?

2) After the tax cuts were instituted, did the share of the tax burden shift towards the rich or towards the rest of us?

Jimo 4 years, 11 months ago

So, there we have it.

I made a straight forward, uncontroversial, indisputable statement of fact. You (forgetting momentarily that you're not in the echo chamber of wingnuttery) just had to - HAD TO! - toss out your b/s. And on a topic capable, not of opinion, but of verifiable fact, got challenged to support your claim. AND. COULD. NOT.

And just as bad, you don't have the character to admit your error, or so it would appear.

Should you have some small sense of right and wrong, perhaps you would benefit from reading just the Republican economists who find your claim to be b/s. Heck, if you don't have much time, limit yourself to just the Bush Admin economists who are on the record that you are full of ......

notajayhawk 4 years, 11 months ago

So there we have squat, little boy. You're right - it's verifiable fact. You're the one that called me a liar - try backing it up. Show me the tax revenues from 2001-2006 and show me how they dropped off.

Of course, you can't, since they actually rose over 20% during that time. See, small one, that fact is not, and never has been, in dispute. The part that your Messianisitic economists dispute is whether or not the tax cuts were responsible for that growth. There are no 'facts' associated with that. Your so-called economic experts have never said that tax revenues dropped, since obviously they didn't. They claim that revenues would have grown even more if the tax cuts didn't happen. This is a specious claim for two major reasons, and while it's not my job to educate the stupid, and you will never have the courage to consider the possibility that you've been a dupe for the liberal masters you so obediently follow without question, what the heck, I've got some spare time.

1) The claims of your precious economists can - by their own admission - not even be tested, let alone proven. They are nothing more than opinion, the same as the claims of the current administration that the recession would have been worse without the stimulus, or that unemployment would have been even higher. In all those cases, in the absence of the ability to go back in time and change the policies, it is nothing more than conjecture to say 'It would have been different'.

2) Tax revenues, as a percentage of GDP, have remained basically constant for decades. That's because tax revenues do not correlate with tax rates. See, little boy, there are two factors that go into the tax revenue total - tax base times tax rate. (It's possible even your child-brain might grasp that much.) The tax base tends to decrease when the tax rate is increased, following the same, most basic principle of economics as supply and demand. Tax revenues correlate not with tax rate, but with the tax base, i.e. with economic growth. That part is also not in dispute, even by your omniscient economic 'experts'.

The only question in dispute is the best way to grow that economy. Those in favor of the cuts for the 'rich' say it by freeing up more money for investment, while those who say tax more say, essentially, it's by putting more money in the hands of the poor folks to spend.

[continued]

notajayhawk 4 years, 11 months ago

[continued]

Again, there are two clues to this: If you had any guts and were anything more than a mindless automaton, you might ask yourself the question of why the economy responded much better to the cuts than to Obama's interventions. And two, you might look at how capital gains tax revenues more than doubled after the capital gains tax rate was cut.

I notice you didn't have the courage to even attempt to answer the two questions I asked you, jimmie, so I'll just give you the answers - not that you'll believe it or try to verify it for yourself. The tax cuts for the non-rich (e.g. the 10% tax bracket, the additional child tax credit, and the increased threshold for the AMT) cost over three times what the cuts for the 'rich' (e.g. the estate tax and capital gains tax) cost. And the tax burden, the percent of individual income taxes collected, increased after the Bush tax cuts.

So go back to your impression of two of the three monkeys, little one. Just sit there with your hands over your eyes and over your ears, shaking your head back and forth saying 'Not listening, not listening' like a three-year-old. Of course, if you ever wanted to be anything more than an incredibly gullible lapdog, you might try covering your mouth for a change, and looking up the facts for yourself.

Jimo 4 years, 11 months ago

So, for the benefit of all who don't have time to follow these things, we have come full circle, and we end up back where we started.

Tax cuts cost revenue. Period. There is NO debate on this point outside of wingnuttery. And anyone who tells you otherwise is - LYING - to you.

Practicality 4 years, 11 months ago

I posted this the other day, and I will post it again. Why would these Democrat lawmakers want to hurt themselves?

Here are profiles for the 10 most flush Hill power-and-money brokers: 1. Sen. John Kerry (D-Mass.): $188.6 million. 2. Rep. Darrell Issa (R-Calif.): $160.1 million. 3. Rep. Jane Harman (D-Calif.): $152.3 million. 4. Sen. Jay Rockefeller (D-WVa.): $83.7 million. 5. Rep. Michael McCaul (R-Texas): $73.8 million. 6. Sen. Mark Warner (D-Va.): $70.2 million. 7. Rep. Jared Polis (D-Colo.): $56.5 million. 8. Rep. Vern Buchanan (R-Fla.): $53.5 million. 9. Sen. Frank Lautenberg (D-N.J.): $49.7 million. 10. Sen. Dianne Feinstein (D-Calif.): $46.1 million.

beatrice 4 years, 11 months ago

For the good of the nation?

Why do middle and lower middle class Americans vote for Republicans when it is clearly against their economic own good?

notajayhawk 4 years, 11 months ago

So the extra $1000 or so that people making between $40K-75K got back as a result of the Bush tax cuts wasn't good for them, bea?

Practicality 4 years, 11 months ago

My point is this, most lawmakers are far wealthier than the constituients they represent. The vast majority in both the Senate and Congress probably fall into the above $250 K tax bracket. (Disclaimer: I have not looked that up yet so I could be wrong on that) If that is indeed the case, they stand to benefit the most for not repealing the tax cuts on an individual level, regardless if they are a Democrat or Republican, and regardless of following a political line.

I don't necessarily believe that the tax money is used for the good of the nation. In some instances, yes, but in others, not even close. And, to answer your question, I have thought about that before, and have been perplexed by that question at times. What I have come to is that taxes are either irrelevant to some, not understood by many, and, in other cases, a trivial detail in determining their own economic good. If one pays higher taxes but Nets more money at the end of the year because of a stronger economy or higher return on their investments, then it would be economically advantageous to vote for the person who would give you higher taxes.

I would also like to point out that many people in the Lower Classes vote republican as well. Just look at Kansas' voting record.

beatrice 4 years, 11 months ago

This is the same Tom Shewmon who wrote that Americans would never vote for a black man to be President. After they did, he claimed, "Whites have no power now." For him, it is all about the skin color, which can only be overshadowed by party affiliation.

Scott Drummond 4 years, 11 months ago

Except when he was revealing his secret Muslim beliefs and supporting the building of a mosque at Ground Zero, right Tom?

thusspokezarathustra 4 years, 11 months ago

Jeremiah Wright breathes fire? Awesome, he's the Gene Simmons of Christianity!

beatrice 4 years, 11 months ago

But Bush was White? So will people vote for someone White ever again?

yourworstnightmare 4 years, 11 months ago

Every man, woman, and child in America has borrowed ~$3000 to pay for the wars in Iraq and Afghanistan.

Who is going to pay back these loans that we all have taken out? Each and every one of us is responsible.

notajayhawk 4 years, 11 months ago

nightmare, if you're aiming at merrill's position as spammer-in-chief, you have some work to do. At least he has his endless litany of propaganda links to sprinkle liberally through the comments he cross-posts.

yourworstnightmare 4 years, 11 months ago

I think for myself.

Do not read my posts if you find the truth uncomfortable.

Richard Heckler 4 years, 11 months ago

The upper 1% cannot support the economy.

"There is a commonly accepted myth that buying stock in the stock market provides funds directly to businesses that they can use for new investment. This is completely incorrect. Only when someone buys stock that is part of an initial public offering (IPO) does the money go directly to the firm.

If you were to buy a share of General Motors stock tomorrow, the money you pay would go to the stockowners and not to General Motors. If a large number of people were to suddenly enter the stock market, it would drive up the selling price of stock and create a windfall for those who currently own stock, but it would not provide a penny to the firms whose stock is traded.

Economists Dean Baker and Bob Pollin did a study a decade ago during the IPO boom that illustrates this distinction. They found that for every $113 in stocks traded, only $1 actually went to businesses to finance real investment."

gl0ck0wn3r 4 years, 11 months ago

http://blogs.wsj.com/wealth/2010/08/2...

"Why are they sensitive? Let us recall the data Mr. Zandi crunched for the Wealth Report earlier this month. It showed that the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments. That is nearly equal to the outlays of the bottom 80% of Americans."

Richard Heckler 4 years, 11 months ago

There is no hard evidence that demonstrates the tax breaks the upper 1% have received in the last 30 years has in fact generated new industry,new jobs or new economic growth.

Why do the upper 1% need any tax breaks when they have Bermuda to hide their true wealth which allows them to lie about their income. Is this legal? NO The IRS is not pursuing these matters as they should.

gl0ck0wn3r 4 years, 11 months ago

http://blogs.wsj.com/wealth/2010/08/2...

"Why are they sensitive? Let us recall the data Mr. Zandi crunched for the Wealth Report earlier this month. It showed that the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments. That is nearly equal to the outlays of the bottom 80% of Americans."

thusspokezarathustra 4 years, 11 months ago

The top 5% of Americans do pay 37% of consumer outlays while the bottom 80% account for 39% of outlays. However reading further you find out that the top 10% of Americans have 50% of the wealth in the country. So in proportion to their wealth they are still underspending.

gl0ck0wn3r 4 years, 11 months ago

Do you think increasing taxes on those people would encourage more spending?

Jimo 4 years, 11 months ago

I would institute a revenue-neutral payroll tax cut.

No payroll taxes for new hires - Social Security, Medicare, unemployment - on the first $40,000 of wages - including any employer portion - to be made up by lifting the wage limits on the top. That's a significant bargain for hiring.

If the Miami Heat wants to pay LeBron James $14.5M in wages, their employer portion shouldn't be $6,621.60 but rather $899,000.00.

Scott Drummond 4 years, 11 months ago

"In the Senate, where Democrats need unity and at least one Republican vote to overcome filibusters, at least three Democrats and independent Joe Lieberman of Connecticut have said they want to extend all the tax cuts temporarily."

The issue, of course, is not whether the Democrats have sufficient votes to pass legislation over republican objections, but whether the republicans have sufficient Democratic support to pass legislation to extend the failed bush tax giveaway to the ultra-rich. Currently the Democrats have 58 votes. The article identifies 4 who have indicated support for extension of the cuts. By my calculation that leaves the republicans well short of a fillibuster proof majority that would be needed to achieve extension of the tax cuts. The upcoming elections may change that, but it would be January before the new Senate could act and the law expires at the end of this year.

jafs 4 years, 11 months ago

Yes, but if the cuts expire, they expire for everyone.

The Democrats need enough votes to extend them for the middle class, while allowing them to expire for the rich.

notajayhawk 4 years, 11 months ago

If you were really serious about fiscal responsibility and balancing the budget, and really believe that restoring the taxes that were cut will increase tax revenues, then you'd want them all to expire, since the cuts to the non-rich cost a lot more than the cuts for the rich, even excluding the secondary gains from the latter.

jafs 4 years, 11 months ago

I was just correcting scott's assertion - if nothing is done, then all of the cuts will expire, not just the ones for the rich.

Personally, my family can absorb another $100/month or so if necessary, and I don't have a problem paying taxes. I would, of course, like to see government spending become much less wasteful, and more in line with my own priorities.

But I worry about the shrinking middle class, and all of the unemployed folks - especially those in their 50's who can't get jobs because they're older, whose 401K's have shrunk, and don't qualify for Social Security yet - they've worked their whole lives, and are struggling to make ends meet.

notajayhawk 4 years, 11 months ago

I worry about them, too. More than you'd imagine. But it is fundamentally unfair to say that just because those people have more, we should get THEM to pay for everything. The people in the top 1% were already paying the share of over 30 other people (a share which, incidentally, increased after the Bush tax cuts). When do we stop saying 'Okay, you're rich, I think YOU should be the one to pay?' When you go out to dinner with friends, does the one with the highest salary or the biggest house or the newest car have to pick up the tab, or subsidize the shares of people that make less?

jafs 4 years, 11 months ago

Well, it's very hard to imagine a "fair" system of taxation, I find.

Any way of doing it would seem to have certain aspects which may seem fair and right, and other aspects which don't.

If the top percentage owns much of the income, then it seems appropriate for them to pay much of the taxes, doesn't it?

The problem is that there's not a really good underlying justification for any of the taxation systems - income, property or sales. In fact, when I asked a friend what it was, he said, in effect, there's none.

Pay as you use things seems fair, except that then those who have little money will have little opportunity.

And, when folks are getting laid off because of bad decisions at the top, and the folks at the top are getting government bailouts and walking away with no problems, something seems off to me.

The people getting laid off aren't the ones, for the most part, who screwed things up - why should they be the ones suffering?

notajayhawk 4 years, 11 months ago

"If the top percentage owns much of the income, then it seems appropriate for them to pay much of the taxes, doesn't it?"

You're mixing terms here. They earn most of the income, they own most of the property. They are already paying much, much more proportionately of their income in taxes; as has been stated, the top 1% pays the share of over 30 other people. And just because they have more property, who cares? And one would assume they also pay more taxes on THAT, although that's much fairer, since sales and property taxes aren't graduated taxes.

"The people getting laid off aren't the ones, for the most part, who screwed things up - why should they be the ones suffering?"

And this isn't entirely true. If a union negotiates for a salary increase that makes the company less profitable, is that management's fault?

Also, as I said somewhere on one of these threads, as far as the investments go, you bet your a** the 'little guys' were just as responsible.

Do you have a pension or 401K somewhere, maybe some money in a mutual fund? Do YOU know where they had their money invested? Nobody cared. They could have put their money in something safe, like government bonds, but the return rate is below inflation, and they wanted their money to grow. And that's ALL they cared about, was opening up that quarterly or annual statement and seeing the bottom line get bigger. At some level they must have had some vague realization that the more they were making, the more risky the investments - that's how investing works. But they didn't care if their money, which they freely handed over to the investors, was invested in the derivative market or over-inflated oil futures, they never asked and didn't want to know. So really, they had absolutely nothing to b**** about.

jafs 4 years, 11 months ago

It all depends on what you use for comparisons.

If the top 1% pays the share of 30 others, that seems out of balance. But if they have the income of 50 others, ...

As I said, it's hard to determine a fair system - it all depends on how you look at it.

Union wages and benefits combined accounted for about 10% of auto manufacturers costs. And, less profitable is still profitable - the guys going out of business weren't "less profitable", they were going bankrupt.

I disagree with your analysis - of course people wanted their retirement investments to grow, otherwise what's the point? And, many people got into 401K's because companies stopped offering the safer and better defined compensation pensions (because it was cheaper for the company) - many of them would have been happier with the defined benefit option.

Investing is complicated - you either have to find someone you trust, or get very informed yourself, or both. I have a bit more empathy for the average joe who suddenly has to invest their own money - they may not have the time, energy, or clarity to do it well.

And, again, I don't know of anybody who's saving for retirement who doesn't ask some questions, and try to get their investments into appropriate categories.

The big problem that I've mentioned a few times is that rating agencies, paid by the issuers of the securities, engaged in fraudulent practices, rating risky investments as good one. Everybody who bought those, from individuals to banks, etc. was defrauded.

So you put your money into a 401K that's supposed to be invested in safer, more moderate investments, and the manager buys some of these risky sub-prime backed securities - how exactly is that your fault?

If anything, I'd lay some blame at the feet of the managers, who should have known better - they should have known that the securities were backed by sub-prime loans, and that those couldn't possibly be great, safe investments for retirement accounts.

But now, I sense some of your anger - you're angry at unions and what you perceive to be greedy and stupid normal people.

I, on the other hand, tend to get angry at management, and what I perceive to be greedy and stupid rich people.

notajayhawk 4 years, 11 months ago

"If the top 1% pays the share of 30 others, that seems out of balance. But if they have the income of 50 others, ..."

But they don't, and you know it. If they had the income of 50 others and paid the taxes of 30 others they'd be paying a lower tax rate than the people at the bottom, which we know is not true. Again, don't mistake the term 'wealth' for 'income', the two terms are not interchangeable.

"And, many people got into 401K's because companies stopped offering the safer and better defined compensation pensions (because it was cheaper for the company) - many of them would have been happier with the defined benefit option."

The pension funds, particularly the large state employee funds, were invested in the same questionable funds as the 401K's. Remember how much KPERS and MOSERS lost?

"But now, I sense some of your anger - you're angry at unions and what you perceive to be greedy and stupid normal people."

And where did you get that from? I've belonged to two unions over the years, and have nothing particular against them, although neither one did a darned thing for me except collect dues.

Oh, and "less profitable" indeed can mean "unprofitable", which by definition is less than "profitable".

jafs 4 years, 11 months ago

Actually, from what I've read, the top 10% of income earners have about 50% of the income.

Same problem with the pension fund managers - but again, how is it the fault of the employees? The fund managers should have known better.

Less profitable could mean going bankrupt, but it's not how it's usually used. And, at 10% of the overall costs, I wouldn't ascribe looming bankruptcies to the unions - it seems to me it's much more likely a result of poor management decisions, like failing to make small, fuel-efficient cars that people want to buy (well-built).

That's my problem with just allowing the businesses to fail - if it were in fact those responsible for the failure that suffered, it seems fair and ok. But the guys at the top have the game rigged, so that even if the company fails, they do ok. It's everybody else, who just worked there and had no major decision-making capacity, that gets hurt.

notajayhawk 4 years, 11 months ago

"Actually, from what I've read, the top 10% of income earners have about 50% of the income."

We were talking about the top 1%. But if you want to talk about the top 10%, in 2005 they had 46% of the income and paid 70% of the taxes. The top 1% had 21% of the income, and paid almost 40% of the taxes.

Incidentally, you don't have to be a multi-millionaire to break into that top 1% - in 2005 the cutoff was a little over $350K.

"Same problem with the pension fund managers - but again, how is it the fault of the employees? The fund managers should have known better."

Sometimes the pensioners have no choice. Often they do. I have had two small pensions in the past. When I left federal employment I took the money with me. State law where I have another small amount does not allow you to pull the money out (but then, none of it was my own money anyway). But you don't have to invest in the company's 401K, you have choices in how to invest for your retirement. And if you just hand over your money and say 'I don't care what you do with it as long as you make money for me,' then you're responsible for the results too.

"at 10% of the overall costs, I wouldn't ascribe looming bankruptcies to the unions"

You keep harping on that 10% as if it's the norm. It is not. People scream bloody murder about things like tech support jobs going overseas. For an internet service provider, labor costs can be the majority of their costs of doing business.

And even in the auto industry - that 10% may not seem like a deciding factor. But that depends on the amounts and the nature of the other costs. Let's say a company is operating with a 3% profit. Those labor costs, if they increase by 30% (and we're not just talking about their salaries - how much more did it cost the company for their health insurance premiums?), there goes your entire profit.

Not to mention that a lot of the other costs are fixed. One of the reasons labor is a small contribution to the auto industry's costs is the massive investment in equipment, and paying off the loans for all that machinery isn't something you can adjust to make up for the higher labor costs. Often labor is the only place there is any room for the company to make or break a profit.

jafs 4 years, 10 months ago

Ok.

Your figures are from the middle of the Bush administration, before the Democrats got a majority in Congress - are you mad at him and the Republicans about them?

Do you have any current numbers?

Well, but usually companies have matching funds available for their investment vehicles, making them a better idea in theory. And, nobody I know says "I don't care what you do" - they assume (perhaps incorrectly) that pension fund managers are paid for their expertise in finding good, appropriate investments for retirement. After all, that's their job.

The 10% figure for car companies is the one I know, based on testimony before Congress. And, it was a total figure.

But don't you agree that poor decisions on the part of management are generally the major factor behind business failures?

What about changing executive compensation practices?

notajayhawk 4 years, 10 months ago

"And, nobody I know says "I don't care what you do" - they assume ... "

Same thing.

"After all, that's their job."

No, it's not. Their job is to make money for the fund. Or are you going to tell me that people would be happy opening their quarterly statement and seeing their balance had decreased, as long as there was a little note saying it was from "appropriate" investments?

"And, it was a total figure."

I know that. That's why I pointed out the sensitivity of labor costs to something like a 20 or 30% increase in health benefit costs. Which would be about half of what it would take to wipe out a 2 or 3% profit margin.

"But don't you agree that poor decisions on the part of management are generally the major factor behind business failures?"

No.

"What about changing executive compensation practices?"

Why?

jafs 4 years, 10 months ago

An "appropriate" investment for retirement would be one which made money, but was also safe and not too speculative.

Well, if they're not responsible for the failures, how are they responsible for the successes, and what justifies the massive salaries?

It was another option, if costs increased.

Cait McKnelly 4 years, 11 months ago

OK. For all of you people griping, whining, complaining and moaning.; we've obviously stated the problem. Now let's state the solution. I'm a solution driven person. I honestly and sincerely want to know your solutions to these problems. If you cannot and will not state what you would do to fix it; you are no different from half the politicians in DC. So give it up America. What would YOU do? And by the way don't just say "cut taxes" or "cut spending". That's what politicians do. Cut WHAT taxes. Cut WHAT spending? And how are you going to deal with the short falls those cuts effect?

Scott Drummond 4 years, 11 months ago

As stated previously, end our overseas military engagments and cut $700 billion from the Pentagon budget.

End the disasterous bush tax cuts for those making over $200,000 per year and use the increased tax revenue to: 1. fund badly, badly, badly needed improvement to our nation's infrastructure, 2. invest/provide seed money for the development of green technologies which will end our dependence on foreign oil, and 3. invest in a significant increase in enforcement against employers of illegal immigrants.

Thank you.

jafs 4 years, 11 months ago

"Improving" infrastructure doesn't mean building new roads, it means fixing and upgrading existing ones - remember the bridge that collapsed fairly recently, despite evidence that it needed to be fixed?

Only if we also immediately end all subsidies to existing energy producers.

Scott Drummond 4 years, 11 months ago

Removing illegal immigrants from the labor pool will increase employment and wages among the citizens of our country which will reduce deficit spending and increase tax receipts.

jafs 4 years, 11 months ago

Only if those businesses choose to hire Americans and pay them higher wages.

If there were only some way to make them do that, ...

notajayhawk 4 years, 11 months ago

"End the disasterous bush tax cuts for those making over $200,000 per year and use the increased tax revenue to:"

Gonna' do all that on about $35B, are you? 'Cause that's about what those "disasterous" tax cuts cost - even less when you factor in the secondary gains.

jafs 4 years, 11 months ago

He also included $700 billion from the Pentagon budget as well.

notajayhawk 4 years, 11 months ago

Nice thought. Pretty impractical.

Would we be in better financial shape if the wars hadn't happened at all? Unquestionably. But they did. Whether you agreed or not, whether you think it should have happened or not, it did. And for better or worse, we're committed to much of that spending.

Which isn't necessarily a bad thing, in and of itself. Wars always cause over-spending and deficits. They also end, at some point. As anyone that gets into trouble with their credit cards can tell you, there's a fundamental difference between going into debt for a time-limited or one-time, major, un-budgeted expense, and going into debt for normal daily expenses. It's not the unexpected car repairs or the airfare to aunt Petunia's funeral in Idaho that gets people in trouble with their credit cards. But when they start charging their groceries, their utilities, their gasoline, all the expenses they're going to have every day of their lives, to the credit cards because they can't afford to pay them today, that's real trouble. Because if you can't pay for those things today, you won't be able to pay for them PLUS pay off the credit card bills tomorrow.

Flap Doodle 4 years, 11 months ago

Too bad the current regime has concentrated on paying off political favors and targeting money to every liberal wet dream they could identify. Remember, this was the Recovery Summer!

Scott Drummond 4 years, 11 months ago

Got news for you, Snap. Us liberal ain't none to happy with this President's performance. He has, in fact, wasted too much time and effort mollifiying the right wingers and has not been bold or leftist enough. I'll await the howls of disbelief, but that is the view from the far left.

Scott Drummond 4 years, 11 months ago

Actually I suspect many Americans voted for him because he was not george w. bush, not John McCain and were swept up in the frenzy of being part of an historic election. Research was not part of the equation. I suspect Hillary would have been a far better performer.

Cait McKnelly 4 years, 11 months ago

No instead we'd be stuck with another Alzheimer's Wonder like Ronald Reagan and the Wasilia Hillbillies.

Richard Heckler 4 years, 11 months ago

The Wealth Report Robert Frank looks at the lives and culture of the wealthy.

* Aug 2, 2010

  Do the Rich Need the Rest of America?
  By Robert Frank

  Late last year, the U.S. economy experienced a surprising decoupling.

  As stocks boomed, the wealthy bounced back. And while the Main Street economy was wracked by high unemployment and the real-estate crash, the wealthy–whose financial fates were more tied to capital markets than jobs and houses– picked themselves up, brushed themselves off and started buying luxury goods again.

  Who knows what the next few months and years will bring. But one thing seems clear: the economic fate of Richistan seems increasingly separate from the fate of the U.S.

  Some argue that the decoupling has gone even further. Michael Lind, a policy director for the Economic Growth Program at the New American Foundation, argues in Salon that the American rich no longer need the rest of America.

  He says the wealthy increasingly earn their fortunes with overseas labor, selling to overseas consumers and managing financial transactions that have little to do with the rest of the U.S. “A member of the elite can make money from factories in China that sell to consumers in India, while relying entirely or almost entirely on immigrant servants at one of several homes around the country.”

  He adds:

      If the American rich increasingly do not depend for their wealth on American workers and American consumers or for their safety on American soldiers or police officers, then it is hardly surprising that so many of them should be so hostile to paying taxes to support the infrastructure and the social programs that help the majority of the American people. The rich don’t need the rest anymore.

  Some would argue this is a vast overstatement. The U.S. remains the largest consumer market in the world and still matters to Bill Gates, Warren Buffett and Lloyd Blankfein alike. The American wealthy benefit greatly from the country’s legal system and business transparency, not to mention its armed forces.

  Yet the increasingly global elite do seem to be forming something of their own financial culture, unattached to any single nation or set of rules, and increasingly free to move their money and resources (and tax dollars) wherever they are treated best.

  Rather than having a second home in Richistan, an increasing number of rich people seem to be moving their money there full time.

  Do you think the rest of America matters anymore to the rich?

================================================================= This Wall Street Journal implies the wealthy upper 1% do not need americans any longer.

That being said shut down all USA tax breaks for the wealthy and raid the Bermuda tax haven with IRS agents. Then make them pay up all back tax dollars plus interest and fines.

gl0ck0wn3r 4 years, 11 months ago

http://blogs.wsj.com/wealth/2010/08/2...

"Why are they sensitive? Let us recall the data Mr. Zandi crunched for the Wealth Report earlier this month. It showed that the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments. That is nearly equal to the outlays of the bottom 80% of Americans."

Scott Drummond 4 years, 11 months ago

They have not been in charge since 2006. You had george w. bush consistently blocking anything that was not passed with veto proof majorities. Since the 2008 election large Democratic majorities were elected along with a President more favorably inclined to support Democratic policies. Many of the "Democrats" however are DINO and the President has proved to be an unreliable advocate of left of center policy. Blame for the horrible shape this country is in can be placed soley on the right wing republicans and corporate, right leaning, gutless "Democrat" cowards.

jafs 4 years, 11 months ago

You keep posting simplistic explanations of how our government works, despite numerous corrections.

That means you don't care how things actually work, you just want to keep blaming Democrats regardless of the truth.

In order for any party to have complete responsibility and/or blame for legislation or lack thereof, that party would need to have a filibuster-proof majority in Congress and a like-minded President, or a veto-proof majority with a veto-minded President.

Scott Drummond 4 years, 11 months ago

Who, but fools and syncophants, would support what right wingers have done to this country during the last 30 years?

notajayhawk 4 years, 11 months ago

"Many of the "Democrats" however are DINO and the President has proved to be an unreliable advocate of left of center policy. Blame for the horrible shape this country is in can be placed soley on the right wing republicans and corporate, right leaning, gutless "Democrat" cowards. "

Oh, so it was the will of the voters that Democrats came to complete power in 2008 - but it was not the will of the people that these Democrats didn't do what YOU wanted.

Brilliant as always, scottie.

George Lippencott 4 years, 11 months ago

Yep - could have predicted it. Those four million rich taxpayers contribute a lot to both political parties. Remember our progressive tax system stops being progressive at about $200K. Even with a lapse in the Bush cuts for the really rich, they will not pay their fair share in a progressive system. Could this also be contributing to the general unrest?

Obama had the ability in the first year to fix this if he could have held his own party. Now, the rich walk but somebody is going to have to pay for the very large deficit (spending at twice annual tax receipts and the bill to repay the SS trust fund has yet to arrive). Guess who will be nominated to pay all that. Why should I vote again for the Democrats and be the middle class target when the Republicans will at least whack the poor.

jafs 4 years, 11 months ago

Again, unless they have a filibuster proof majority, which they don't currently have, they don't own anything lock stock and barrel.

jafs 4 years, 11 months ago

If they can't overcome a filibuster, then the opposition party can simply threaten one, and that will derail any legislation proposed.

So it is in fact the opposition which is stalling their efforts.

This works both ways, in my view, regardless of which party is in the majority - it's why you can't usually blame one side or the other completely.

There is a blatant lack of understanding of how our system works here.

1029 4 years, 11 months ago

I put aside $1050 per month on top of 401k that's matched. I love democrats. Government isn't some big, bad entity. Government is the people.

Embrace it, fellow Lawrencians. Take advantage.

notajayhawk 4 years, 11 months ago

"Government isn't some big, bad entity. Government is the people."

Nice theory. To bad it doesn't come close to matching reality.

jafs 4 years, 11 months ago

It is really too bad, since that was the original idea!

notajayhawk 4 years, 11 months ago

Power corrupts. Absolute power corrupts absolutely.

Okay, that may not be completely applicable. But the phenomenon of being corrupted, or at least indoctrinated, by the 'system' before you work your way into a position where you can change that system is inherent to any system, not just politics.

I think you mentioned your wife is in a social services field - I'll bet someone in charge (if not herself) is a social worker. Social workers are well established in the administrative ranks of that field, and tend not to allow others (e.g. professional counselors) from breaking into the upper echelons.

In the substance abuse field, most of the people at the top are the ones who've been around the longest, the ones ones who are in recovery themselves and followed the Hazelden path. If there's a disagreement between what the science says and what the Big Book says, the 12-step philosophy is taken as the word of god carved in stone.

The major difference between a PsyD and a PhD in psychology is essentially the former requires research and a dissertation while the latter focuses on practice. It's very difficult for a PsyD to get into a teaching position, since the PhD's feel they had to do the research, and they'll be darned if they'll let anyone else in the club.

In government service (not just elected officials), advancement is based more on seniority than performance. By the time you've been around long enough to be able to change anything, you've forgotten why you wanted to.

And when it comes to elected officials, how does an 'outsider' even get elected, without the assistance of the political machine and the benefactors? Not to mention, as I've said in a few threads recently, we long ago stopped being a government OF the people. Just plain folks, with all their normal weaknesses, failings, and past mistakes, simply can't get past the vetting process all candidates have to pass. Not to mention you have to have money and an advanced education to even have half a chance.

sourpuss 4 years, 11 months ago

You moronic Democrats had a majority in both houses for two years and did nothing. Both parties are a bunch of do-nothing sycophants who will do anything to stay elected so they can grease the economy to benefit themselves and their rich friends. They are all that way, period. Lucky for them there is no one else worth voting for. It's either "Government is horrible, let's destroy it" Teapublicans or it's "Let's make friends and come to a consensus" Demowimps. Bah.

jafs 4 years, 11 months ago

It sure would be nice if we had some other viable choices, that's for sure.

Of course, as soon as they become viable candidates, they have to raise massive amounts of money, and, then, ...

Mari Aubuchon 4 years, 11 months ago

When I was on (private) disability for $9 K a year in the late 90s, I paid $700 in federal taxes. That was the same as one month's income. I was single with no kids and a standard deduction.

Stephen Roberts 4 years, 11 months ago

Wait a minute, I am confused. I thought the Democrats are supposed to represent the common person, now they are wanting to keep the tax cut sfor the rich?? Boy they have changed or maybe they are just now showing their true colors!!!!

Ever since the Bush tax cuts were passed, there have been people on this board who have stated the tax cuts are for the rich. Being a CPA, I know that the cuts were not exclusively for the rich.

jafs 4 years, 11 months ago

It's not that they were exclusively for the rich.

It's that the rich benefited substantially more from then than the middle class.

notajayhawk 4 years, 11 months ago

"It's that the rich benefited substantially more from then than the middle class."

Sorry, jafs, that is completely untrue. Check your numbers before making statements like that.

The tax cuts for the non-rich (e.g. the 10% tax bracket, the additional child tax credit, and the revision to the AMT) are estimated to have cost (if memory serves) over $110B. The tax cuts for the so-called rich (estate and capital gains taxes, for instance) cost about $35B. It might also interest people to know that corporate income tax revenues soared after the cuts.

The disparity was even greater when you factor in secondary gains. There was very little, if any, secondary gain from the cuts to the non-rich, while at least some of the tax cuts for the 'rich' more than paid for themselves. The CBO had estimated that the capital gains tax rate cut would increase (yes, increase) capital gains tax revenues by 15%. They grossly underestimated - they more than doubled.

On top of that, the share of the tax burden paid by the top-earning taxpayers also increased after the cuts.

Did those that make more money get a bigger reduction? Yes, of course, duh! They pay IN more. But I think you'll find, if you check the numbers, that percentage-wise, the cuts were pretty consistent across income brackets.

jafs 4 years, 11 months ago

I wouldn't disagree about the "cost" of the cuts.

There are a lot more middle class folks than wealthy ones, so it makes sense that the aggregate amount would be higher.

It's hard to believe that there were very little secondary gains from the middle-class cuts, since most of those folks probably spent the money.

The complexity of our system is interesting - I read another of your posts about the results of the cuts - I can't contradict it, since I don't have any information to the contrary, and it's certainly possible that cuts to the wealthy result in more money circulating, but it's not at all certain.

I believe that food stamps have the highest multiplier, because it's guaranteed that all of that will be spent. As you move up higher in the income chain, it seems to me that there is much more discretion involved with what is done with more money, which intuitively suggests a smaller multiplier.

But it's absolutely possible that the wealthy will act as conservatives claim, investing in businesses, employing more people, etc. it's just not at all guaranteed.

Whereas it's pretty certain that folks at the bottom will spend any extra money.

notajayhawk 4 years, 11 months ago

But spend it on what?

That extra $5/week Obama put in people's pockets, for instance - where did that get spent? Maybe once a week people bought (cheap) steak instead of hamburger?

You might be right about food stamps being the highest multiplier - depending on what that means. Groceries have about the lowest margin in the retail world. Yes, the grocer took in a few more bucks, but almost all of it went towards paying the wholesaler, plus the costs of keeping his doors open. The wholesaler took in a few extra dollars, but almost all of it went to the supplier, plus the costs of transportation and storage. And I hope you know that farmers don't have a huge profit margin. So yes, there's a few more dollars circulating, but neither the grocer, the wholesaler, nor the farmer rushed out to buy a new car because you had a rib-eye instead of a burger. To really boost the economy, the additional influx has to be enough to purchase additional products, not just the ones we're already buying. And guess what - that means profits at every level the money multiplies.

And for many of the people that you referred to earlier, those just struggling to keep their heads above water, where did their money go? To pay off overdue bills, towards their utilities? These are good things, yes, but they don't actually add to the consumption of new products.

In any event, it's not just the circulation of money, it's how it circulates. The economy has to expand to keep tax revenues increasing to do the things that a growing population needs. That means buying additional products that wouldn't have been purchased otherwise, and it means investment. And let's face it - those people that were struggling and got that extra $1000/year didn't spend it on a new television or computer (and if they did the money mostly left the country anyway), let alone put it into a mutual fund or stock purchase.

"There are a lot more middle class folks than wealthy ones, so it makes sense that the aggregate amount would be higher."

As I said, look at the percentages. If memory serves, I believe pretty much everyone (except of course those that weren't paying taxes) got a reduction of about 3%.

jafs 4 years, 11 months ago

Multiplier, as I understand it, means how much it circulates.

I agree completely that how money circulates is important - but I come to a different conclusion - that it's generally a better kind of circulation if the folks at the bottom get more. For example, if a rich guy buys a $300,000 car, it benefits a dealer and a manufacturer. If 10 not rich guys buy 10 $30,000 cars, it benefits up to 10 dealers and manufacturers.

Not sure that it's true that an economy has to continually expand - that seems to be a modern assumption. But there's some interesting research done by Peter Victor, I think, about the possibility of a stable, very well-functioning economy with low unemployment.

The problem about the fact that everything's made in China is a huge one. But I don't see the wealthy and large corporations helping us solve that one.

Sure, but the point is that in absolute terms, the 3% back to the rich are much more of a gain than the 3% to the middle.

As you in fact point out.

jafs 4 years, 11 months ago

And yes, I was referring to the numbers.

If you give a million people $100 dollars, they benefit a little.

If you give 100 people a million dollars, they benefit a lot.

notajayhawk 4 years, 11 months ago

If those million people were paying $3,000 in taxes, they got a break of 3%. If those 100 people were paying $30 million, they got a break of about 3%. They got back more because they were paying more.

And just a thought, but who do you think is more likely to, say, start up, build, and open a new business in town? One of those guys who got a reduction of a million dollars, or 10,000 of those who got a $100 back pooling their money? The nice thing is, if BOTH of those groups got that reduction, the person who got a million might open a business at which 10,000 others have an extra $100 to spend.

camper 4 years, 11 months ago

Nota, I hear you. The Bush tax cuts were across the board. They went down for everyone. Who this benefited the most is open for debate. Under President Obama, my federal taxes were about 3 hundred bucks lower for the year, thoughI earned almost the exact same amount I had been for the previous 6 years. All of this in spite of the esteemed analysis of that great tax expert Joe the Plumber.

As far as Corporat taxation. The US tax code is extremely friendly to corporations and provides a huge incentive to incorporate. Section 179 allows you to accelerate depreciation expense on Capital investment thus allowing you to take a deduction for buying and installing equipment.

A corporation can generally apply current net income against losses that occured 3-years prior to recieve a tax refund or credit. Furthermore, corporate losses can be applied to offset net icome 7-years forward. Bottom line...if you are incorporated and are paying taxes, it is a good problem to have.

notajayhawk 4 years, 11 months ago

We used to have income averaging for individuals, too. Might not be such a bad thing to consider doing again.

In any event, corporate tax revenues increased quite a bit following the Bush tax cuts, because corporations made a lot more money. Again, interventions which grow the economy are better in the long run.

jafs 4 years, 11 months ago

The problem is "might" open a business.

notajayhawk 4 years, 11 months ago

Which is no different than saying the people at the bottom might spend the money they get, because despite your contention that this is a certainty, did you happen to notice the savings rate is up?

jafs 4 years, 11 months ago

Well, it's not a certainty.

But it seems more likely to me the farther down you go on the income scale.

jafs 4 years, 11 months ago

What if we gave the rich folks the cut, but required they spend it on things like investing in/expanding businesses, hiring new employees, etc.?

Then we'd be sure it was doing what you think would be good for the economy (which I agree with).

notajayhawk 4 years, 11 months ago

What if we give the lower income people a tax break but not in cash, they get a credit they have to go out and spend. And it can't be to pay off bills already accrued, it has to be on new purchases. Then we'd be sure it was doing what you think would be good for the economy.

notajayhawk 4 years, 11 months ago

Or to put that another way, if you give people back more of their money but tell them what they can or can not use it for, then you're not giving it back to them at all. If the government is dictating how you spend your own money, then they might just as well take it and spend it themselves.

jafs 4 years, 10 months ago

Well, that's actually what I'd prefer.

Tax everybody, as fairly as we can figure out how, and spend the money on programs likely to benefit the whole economy.

You seem to prefer the idea of tax cuts.

notajayhawk 4 years, 10 months ago

I prefer to let people make their own decisions. You prefer to let a few people make decisions for everyone based on what THEY think is best for everyone.

jafs 4 years, 10 months ago

Well, given the clear uncertainties you've pointed out about giving money back to less wealthy individuals, and the same uncertainties about giving it back to wealthy ones, it seems both may be poor ways of helping the economy.

I thought that was the goal.

Unless you're a hard line Libertarian like Liberty One, most of us don't really believe that an unregulated free market will really benefit all of us.

I think the only place that even in theory, looks at the picture as a whole is government.

jafs 4 years, 11 months ago

And that there might have been better things to do with that money, like pay down our debt, fix Social Security a bit, etc.

beatrice 4 years, 11 months ago

The cuts are in place now for the wealthy, so where are the jobs these cuts are supposed to create?

notajayhawk 4 years, 11 months ago

Well, bea, I suppose we could use the 'logic' the Obama kool-aid drinkers seem to swallow so easily and say things would have been worse if it wasn't for the cuts.

Or I suppose you could look at what the unemployment rate was following the cuts compared to now.

But there were a couple of other things that just might have had an effect on the employment picture more recently, bea. Energy prices soared, the housing market tanked, the domestic auto market tanked ... really, bea, you should really read a newspaper once in a while, it might make it a little easier for you to keep up.

Oh, BTW, bea - where are all the new jobs created by the Obama administration?

beatrice 4 years, 11 months ago

So what were the unemployment rates before the cuts and what they were shortly after? What was the deficit before the cuts, and what was it after? The pro-cuts for the wealthy is trickle-down economics, which continues to be proven not to work.

I believe that without the moves of the Obama administration, including the stimulus package, then unemployement would be far higher than it is. Does that mean we are doing well? Of course not -- other factors and all, as you so obviously note. More still needs to be done.

Oh, and I probably haven't had Kool-Aid since I was 10. Just curious, are you even capable of arguing a point without attempting to be childish and smarmy? Is that really the only way you can argue a point? Do you have such little faith in your own opinions?

notajayhawk 4 years, 11 months ago

"So what were the unemployment rates before the cuts and what they were shortly after? What was the deficit before the cuts, and what was it after?"

The unemployment rate, which was in the neighborhood of 6% when the Tax Relief & Reconciliation Act of 2003 was passed, dropped steadily and didn't start rising again for almost five years. You probably could have looked that up yourself.

As far as the deficit, you might recall there was a war that started just before the TRRA took effect. Kinda' throws off the comparison a little. But revenues did increase with the tax cuts; the problem was on the expenditure side, not the revenue side.

"I believe that without the moves of the Obama administration, including the stimulus package, then unemployement would be far higher than it is."

Of course you do. Have another glass of kool-aid.

As far as 'smarmy' goes, bea, I speak to you as your posts warrant. And I don't have to have "faith" in my opinions. "Faith" is, by definition, belief without evidence, and I have the evidence. I'll leave "faith" to those who believe the party line they're being spoon-fed, that things would have been worse if not for the Messiah. A handy belief to have, since it can never be tested, let alone proven.

jafs 4 years, 10 months ago

Except that most non-partisan economists seem to agree that we would be in a depression if the government hadn't taken the steps it did.

beatrice 4 years, 10 months ago

Jafs, that is exactly what I have read as well. Unfortunately, it all gets mixed with politics. If one party has an idea of what to do, even if it works for the good of the country, the other party will oppose it. Both sides do this.

jafs 4 years, 10 months ago

Yes.

I find it frustrating, and at times it leads me to despair over our future.

Imagine if our politicians actually wanted what was best for the country as a whole - took ideas that worked regardless of politics, and rejected ideas that didn't work the same way.

We might have a chance.

notajayhawk 4 years, 10 months ago

And again I'll point out that the problem with 'experts' is that it doesn't matter what did happen, they all know what should have happened.

Incidentally, 'non-partisan' is not synonymous with 'unbiased'.

jafs 4 years, 10 months ago

This was a statement of what "would' have happened.

Well, it may be the best we can do, and substantially better than partisan hacks.

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