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Tax the Rich and the Corporations – The Hard Math


Our current federal fiscal accounts are out of balance by about $800B per year right now and we are not paying a dime for SS. When the bill comes due on SS (about 5-10 years) and the full cost of Obama care kicks in they will add about another $500B – 700B per year in costs.

We take in about $1.3T per year (not counting SS). To simply stop the growth of the deficit we need to double that. Since we only tax half the population that means that about 35M tax payers must pay the bill. You do the math. The tax increase would double to triple the average taxpayer’s federal income tax.

Yes, we can tax the rich more. Mr. Obama has proposed an increase of 4% in the marginal tax rate of those making over $350K yielding about $70B over the next ten years ($7B per year) Your can see how little of the deficit that would pay.

Now we can tax corporations. We currently tax between 15 and 35% - the latter the second highest in the industrial world. Last year that yielded about $200B (included in the revenue figure above). We could increase it. The recent high is the equivalent of about $500B annually today. Of course, most of the problem is in the tax breaks we have given those corporations. WE could take them all away. The first thing that would happen is that all the public policy initiatives that led to those tax breaks would be unfunded so that if we still wanted to do them the cost would be born by the taxpayers already trying to cover the existent imbalance. In fact, it is most likely that any corporate tax increase will be passed on to the consumer either in product cost increases or in increases in the social safety net to cover the existent jobs that those corporations take offshore to avoid our taxes.

Therefore, if we more than double effective taxes on corporations to the recent high and tax the rich as Mr. Obama has suggested we only have to accommodate a shortfall of about $1T per year. Now how much of that $1T a year should be paid by the 35M taxpayers? The rest must come from cuts. Note that the imbalance equals the SS shortfall and Obama care. Maybe we should have banked the SS trust fund or not added the entitlement to Obama Care. We knew the costs and the math is as it is and was.

Remember, in the above analysis not one dime is being used to cut the existent $14T deficit. Now I can be off in my analysis so I challenge anybody to come up with better numbers. What I suspect is a bunch of platitudes ignoring the hard reality or a deafening silence.

Perhaps it is this math that is bothering the credit rating agencies?? If after all the fuss we just went through we could only find something between $1 and 3T in real cuts over the next ten years and the only revenue enhancement on the table might have yielded upwards of $80B in that same period, when we need about $10T, maybe they have cause to do what they are doing??


jafs 6 years, 4 months ago

They absolutely have cause to do what they did - we don't have anything remotely resembling a sustainable economic plan in place.

And, we absolutely should have saved the SS surpluses - that would have helped a lot.

Lastly, no reasonable people think we can just tax our way out - they think we need to both cut spending and raise revenue. I don't understand why people get so polarized about this one.

tbaker 6 years, 4 months ago

The best way to increase tax revenue is to grow the economy.

whats_going_on 6 years, 4 months ago

enact laws that would outlaw this behavior...politicians in corp pockets. Of course, that could never happen. It's a vicious, corrupt, sickening cycle.

Cant_have_it_both_ways 6 years, 4 months ago

Get a bunch of farmers up there. They could fix it quickly. We have had enough politicians.

George Lippencott 6 years, 4 months ago

Response to Jafs

All that is well and good but how much do we increases taxes on the middle. One number floating around in Democratic circles (do not know if it is a party position) is that we should raise one dollar in revenue for every three dollars in cuts. That means a 50% tax increase on the middle class. That is far more than ending the “Bush” tax cuts.

Added to the increase would be the diversion of income to replace cuts to SS, Medicare, Medicaid, Obama Care and all the rest of the “middle class” entitlements. That could be made worse if we hold the bottom half of the population harmless in our cuts and only ask an additional 4% from the rich.

Perhaps it is the reality of the potential impact on the middle class that has riled up the original “Tea Party” demonstrators (before that party was captured by the business community).

All in all a very bleak future particularly when one realizes (as many on here do not) that the vast majority of Americans really did not benefit substantially from the excesses of the past several decades. The real winners – yep – the rich (top 5%).

jafs 6 years, 4 months ago

Your post is hard to understand.

From what I've read, simply allowing the Bush cuts to expire on the wealthy would provide a significant amount of revenue.

And, I wouldn't simply "cut" those programs - I would re-structure them so that they're available to those that need them, and not to those that don't.

The real problem is that when it comes time to cut spending, somebody always has a reason to object to any particular cuts.

Somebody on another thread and I were discussing this subject - it turns out he claims that he won't actually need his Social Security benefits, but when asked, angrily retorted that he wouldn't give back a dime of it to the government. This from somebody who says the only good way out is to just cut spending.

If somebody who doesn't even need the benefits won't give them back, how can we expect people who actually need them to sit by while we cut them?

That's just one example, but I think there are many like it.

George Lippencott 6 years, 4 months ago

Smoked you out. What you seem to mean is that people who are deemed by some to not need something should give it up, or as you have repeatedly stated be made to give it up by the “majority” People who are deemed by the group to need something should be held harmless. That my friend is communism – from each according to his ability to each according to his needs.

What happened to shared sacrifice???

Oh by the way once again you avoided the question - is a 50% increase OK??

See note to Mr C.

jafs 6 years, 4 months ago


I'm not a communist.

We have a massive financial problem, and I want to solve it without hurting people, if possible.

If we simply make large cuts to Medicare, Social Security, etc. many people will be hurt. If, on the other hand, we provide those benefits to people that need them, and not to people that don't (like millionaires), we save money and people don't get hurt.

That seems preferable to me.

I said the Bush tax cuts expiring on the wealthy would provide a lot of income, without raising taxes on the middle class.

You go on and on about the rich benefiting and not paying their fair share - then point out that even if we tax them a lot more, we still have a financial problem. What's your suggestion? You don't seem to like big cuts to defense spending either.

The only thing I can recall you talking about is programs that help the poor - is that where you'd cut enough to balance the budget?

I'd say that it would be better, and more ethical, to cut Social Security benefits to the rich.

Jan Rolls 6 years, 4 months ago

Exon and other oil companies just recorded big profits again and we are giving them tax breaks. Give us a break.

whats_going_on 6 years, 4 months ago

exactly...no one understands this is seems like. Why do all of these big corps NEED these breaks? To "create jobs?" or to get record profits and pad the pockets of the CEO's? Its SO freaking obvious.

devobrun 6 years, 4 months ago

The biggest tax break afforded oil companies is for domestic oil and gas exploration and development. It is something like $4b annually. The money is an incentive for oil companies to spend in the U.S. and produce energy in the U.S. The money is guaranteed to be spent in the U.S. and the energy that is produced is not under foreign government influence.
Take away the incentive for exploration and production in the U.S. and domestic production goes down. It is cheaper to develop oil fields in Angola. How 'bout just nationalizing oil? Why stop there? Nationalize retail. Take over Wallmart. Start a national health service and all health professionals work for the government. Heck, nationalize everything....even Hollywood. Let's do this government business linkage the way you want. No business at all. Sure did work well in the USSR.

tbaker 6 years, 4 months ago

Letting people and corporations keep more of what they work for and earn is not "giving" them anything. To give something, one must first have rightful claim to it in the first place. The money you work for and earn is YOURS Fido - not the government's. Our government has never created a penney of wealth. People and corporations do that. The government simply takes wealth. By giving us a break, you must believe the money otherwise kept in the hands of people and corporations would do everyone a whole lot more good if government took it? Really? Words mean things. Wise up comrade.

Nellane Laney Croan Stussie 6 years, 4 months ago

They get taxed on Profits!

"We currently tax between 15 and 35% - the latter the second highest in the industrial world."

What part of this don't you understand?

George Lippencott 6 years, 4 months ago

I used thta data and calculated Corporate input at the historic numbers when I did the analysis.

The problem is as stated even after we essentially double to tripple their contribution.

Ken Lassman 6 years, 4 months ago

What I don't understand is the economics of the European Union--can anyone explain why the biggest EU economic power---Germany--has strong unions, more paid vacation than Greek workers, a high tax rate for both individuals and corporations, and somehow manages to produce enough of an economic surplus to drive the Euro and avoid economic hard times while Italy, the 3rd biggest economic producer, is facing economic austerity measures that include slashing government programs, privatization of services, gutting worker benefits, etc.? And what does all of this say about the American economy?

George Lippencott 6 years, 4 months ago

They tax the rich a lot more and their social safety net - while generous - requires responsibility from those receiving it.

Ken Lassman 6 years, 4 months ago

I understand the difference between the US and Germany, but between Germany and Italy? I don't get exactly why the union-loving, benefits-laden, heavily taxed Germans are doing fine when the Italians, who seem at first glance seem to be less in all of those categories, is facing drastic cuts on all fronts. Can anyone explain this tipping point?

George Lippencott 6 years, 4 months ago

Maybe like Greece where the tax paid (if any) has little relation to the tax due??

Ken Lassman 6 years, 4 months ago

Interesting speculation, but I sure would like to know the facts. If anyone knows, feel free to post!

Ken Lassman 6 years, 4 months ago

Perhaps a piece of the puzzle can be found here: http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/weorept.aspx?sy=2009&ey=2016&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=55&pr1.y=12&c=193,158,122,542,124,137,156,181,423,138,935,196,128,142,939,182,172,576,132,936,134,961,174,184,532,144,176,146,178,528,436,112,136,111&s=GGXWDG_NGDP&grp=0& Seems that Germany's public debt as a percentage of GDP is around 80 percent for 2011, while Italy's at 120%. The US, by the way, is 99%, and socialist Sweden is a whopping 37%. Very interesting, no?

Scott Morgan 6 years, 4 months ago

Doug, Greek workers have more vacation, less hours per day, and a relatively low tax rate. Greeks also retire at a much younger age. The German people as a whole are furious with the Greeks.

Germany has always had a manufacturing based economy. In fact pushing Global Warming the Germans have indeed prospered from Controls (think of how many thousands of applications, from fuel injection to making grandma warm in winter. Anything from thermostats to computer energy.

The Germans have also run with the concept of Greening up and vehicle manufacturing.

Now, do you see where the false claim of Global Warming has hurt the U.S.?

The Germans bite is little economically for defense, but do manufacture weapon systems. Since WW2 we the U.S. have graciously picked up the tab for German home defense. Actually most of the free world.

Ken Lassman 6 years, 4 months ago

Actually the Germans have at least as much vacation, but as you can see in the link I provided above, the Germans public expenditures as a percentage of their GDP is around 80 percent while the Greeks have spent 152% of their GDP on public projects, so you are right about low tax rates.

I agree that the Germans have embraced the Climate Change issuea as an economic challenge and are way far ahead of the US in terms of transforming their economy into a low carbon one. This not only is positioning them to avoid the worst effects of climate change, they are at the forefront of innovation, which means that, along with the Chinese, we'll be buying their products instead of the other way around.

Jimo 6 years, 4 months ago

Where to begin!

"Our current federal fiscal accounts are out of balance by about $800B per year right now" - false. "and we are not paying a dime for SS" - false. "the full cost of Obama care kicks in they will add about another $500B – 700B per year in costs." - false, liar, liar, pants on fire! "we only tax half the population" - false, you've been fined for excessively repeating fake propaganda "The tax increase would double to triple the average taxpayer’s federal income tax." - false - good God, just how wrong can wrong be?

Gee, let's just stop. If all of your premises are false then you'll never make it to the truth.

George Lippencott 6 years, 4 months ago

Great. You have some data to support all that?

Jimo 6 years, 4 months ago

George - not going around in circles with you again. Spreading falsehoods once is an error. Spreading them again after being shown they're false is just lying. Spouting falsehoods and demanding contrary proof when challenged is an old propagandist's trick.

George Lippencott 6 years, 4 months ago

Excuse me - exactly where did you show me anything. I agree with the NYT (well maybe some haggles on the margin)

You are the problem. You are right everybody else is wrong.

oldvet 6 years, 4 months ago

'"we only tax half the population" - false, you've been fined for excessively repeating fake propaganda'

According to MSNCB, 47% of working Americans pay no taxes http://www.msnbc.msn.com/id/36226444/ns/business-personal_finance/t/half-us-pays-no-federal-income-tax/#.TkAt1IK6ieE

According to CBS, 43.4% of working Americans pay no taxes http://www.cbsnews.com/stories/2009/04/15/politics/otherpeoplesmoney/main4945874.shtml

And according to USAToday, 47% of working Americans pay no taxes http://www.usatoday.com/news/opinion/editorials/2010-04-16-editorial16_ST_N.htm

Perhaps you have other sources that say otherwise...

Or perhaps you are the liar...

jafs 6 years, 4 months ago

All of those sources state that the percentage is of people who don't pay federal income taxes.

Even those folks pay FICA.

And, of course, they pay state. local, sales, etc. taxes as well.

George Lippencott 6 years, 4 months ago

I think the pouinmt the old vet made is quite valid

FICA is a personal tax for a personal gain State taxes are small by comparison ((maybe 5%) compared to 20% Local taxes are property - not paid by the poor and sales - paid by everybody and related to what you spend. Poor people spend little.

jafs 6 years, 4 months ago

Only if the government actually used that money for benefits, instead of spending it elsewhere - we've had that talk already. As it is currently structured, FICA revenues are being spent on other government spending, and future income taxes/FICA revenues will pay for benefits.

So people who pay FICA are contributing to the running of the federal government.

Everybody pays into the property tax system except for the homeless, and everybody spends money.

The assertion that 1/2 of the population "pays no taxes" is absurdly incorrect.

Jimo 6 years, 4 months ago

While these numbers are all projections, we need roughly $418B in 2015 and $1,345B by 2030. This assumes an improved recovery. It cannot be said often enough: if we don’t get unemployed people back to work there is no scenario for balancing the budget or even reducing debt. (Remember the ironic contradiction the next time someone points out that Congress refuses to put forward any jobs bill, while busy debating “debt reduction.” It costs the nation far(!) more money to have unemployed than it costs to get them back to work.)

Here is one of multiple solutions to this puzzle: http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=419345n1

Such a solution matches $2 in spending cuts with $1 in tax revenues. The burden of cuts falls mostly on the Porkagon and reduces our military empire to its constitutional limitations and its historic levels. The burden of tax increases falls mostly on the wealthy, primarily by returning tax policy to what existed in the Clinton era. The budget balances in both 2015 and 2030 (indeed, runs a surplus) but I would not want to balance the budget in 2015 at all. Doing so both ignores immediate necessities and would have a contractionary effect on growth.

Balancing the budget is easy. It’s so easy a Democrat could do it – and did, just a decade ago. Just begin at that known, safe place and then look to what changed since. You’ll find all the adjustments you need—and more—right there. The only people who want to pretend that it is difficult are those seeking radical revolution (certainly not conservatives!) and seeking to protect the wealthy from paying their proportionate share.

George Lippencott 6 years, 4 months ago

Quite a smorgasbord. To begin with the NYT and I agree on the size of the problem

I argued that just taxing the rich and corporations would not solve the problem. The NYT says the same thing. I did not spread the pain beyond that point. The NYT did.

So, other than the fact that you seem to have never passed beyond adolescence, exactly where do the NYT and I disagree??

Jimo 6 years, 4 months ago

The NYT does not agree with you "on the size of the problem" but rather disagrees with you on the ease of solutions. It's a $15,000,000,000,000 a year economy, George. Finding 1/15th of that sum isn't exactly 'Where's Waldo'.

Taxing the rich - a/k/a, shared sacrifice - need not "solve the problem". That was one of your many flawed premises. You attack a strawman and then claim victory. Moral of your lies ... we don't need to ask the wealthy to pay their share of taxes at all! It's like being diagnosed with a high risk of stroke because you smoke, are grossly overweight, and never exercise. When presented with a modest means of changing your ways--say, taking the stairs--you refuse claiming that doing so by itself "would not solve the problem"!

Q:"exactly where do the NYT and I disagree??" A: "Our current federal fiscal accounts are out of balance by about $800B per year right now"; "and we are not paying a dime for SS" ; "the full cost of Obama care kicks in they will add about another $500B – 700B per year in costs."; "we only tax half the population"; "The tax increase would double to triple the average taxpayer’s federal income tax."

You presented lies. You got called on it. Rather than admit error, you throw a temper tantrum. Seems typical for your "moderate" nature.

What's more - I solved your problem for you. I don't plan to hold my breath waiting for a thank you from you though, let alone a new posting entitled "Wow. Solving our budget deficit is easy. We did it just a decade ago. And we don't have to kill and eat Grandma to do it!"

usnsnp 6 years, 4 months ago

Here is a question. Why did the Republicans when they cut money to NPR say every little bit helps. No uping the tax on the rich will not solve all the problem , but every little bit helps. I sure that a person clearing say $500,000 and taxed another 4% on it, their life style will not be affected.

George Lippencott 6 years, 4 months ago

Restoring to pre-Reagan would tax the rich up to 70% of added income. The 4% Mr. Obama is asking is chump change.

George Lippencott 6 years, 4 months ago

jafs(anonymous)replies… "Nope. I'm not a communist. We have a massive financial problem, and I want to solve it without hurting people, if possible."

I am not advocating that either. But I have problems with the simplistic notion we can fix this problem without pain. Go use Jimo's link and pick your poison. We do not have to kill any of the social safety net programs but we can not tax our way out either.

jafs 6 years, 4 months ago

What would you cut?

You don't like the idea of cutting the military significantly, and you won't like the idea of cutting SS and Medicare if it affects you, so where are the cuts?

If Jimo's comment is correct, the NYT suggestion would cut the military by a lot - do you support that?

Again, and again, and again - I have said we need BOTH spending cuts AND revenue increases - one or the other alone cannot solve the problem.

Jimo 6 years, 4 months ago

Look, military spending--not even counting operating costs of wars--has doubled in a decade. It is the single largest part of the budget. Depending on how you add it up it's around $700B (although my calculations say that it's closer to a trillion). And it's borrowed money!

Cut $100B a year. That's $1,000,000,000,000 in a decade plus interest.

BTW - $1,000,000,000,000 is the estimated lifetime cost of buying all the new F-35 planes Congress wants. The same F-35 that experts fear would be obsolete in a few years. Can you really call spending a trillion on an obsolete weapon anything other than a porkfest?

Just one weapon: a trillion dollars.

Maybe we just need a constitutional amendment that says we cannot spend any more than the next 100 nations do on defense combined. That would slash the military budget by a third!

jafs 6 years, 4 months ago

I agree - my question was for George.

But, it should be noted that cutting the military budget drastically, even when it appears to be wasteful, will affect people and the economy negatively - somebody's making those planes.

Also, it's $1 trillion over a decade - our current deficits are higher than that each year.

Nellane Laney Croan Stussie 6 years, 4 months ago

“I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.”

Warren Buffett

George Lippencott 6 years, 4 months ago

But getting them to pass it might be a challenge

jayhawklawrence 6 years, 4 months ago

The argument has now expanded beyond this level. We are now questioning our system of government. During the Great Depression, a lot of radical political groups sprouted in this country. If conditions get worse and the Republicans cut away all of our social safety nets, we will see the same kind of political upheaval.

We are heading toward some serious discussions about the constitution itself, because we are not going to be able to compete in the global economy or solve the major problems facing us in the near future if we continue down this road. You can only kick the can down the road for so long and time is not on our side.

The political parties have demonstrated very convincingly that the system is in need of serious repairs and a major house cleaning in federal and state legislatures.

What they call politics today is the worst way to manage our nations resources. At this rate, we cannot stand against global competition or take care of the American people.

George Lippencott 6 years, 4 months ago

How about a centrist party? Our current system drives ohtherwise rational leaders to extremes because the extremes come from "safe" districts.

Jimo 6 years, 4 months ago

Is your definition of "centrist" similar to your definition of "moderate"?

Somehow I suspect it's similar to the Mad Tea Hatters idea of "compromise": You give me (1/2 of 1/3 of the government elected 1 time on vague bumpersticker themes in a depressed turn-out election) whatever I want (such as dismantling the entire safety-net structure constructed over generations) and I let the hostage live ... for now.

I'll tell you what: I'll trade that in return for a 100% income tax on all incomes above $500,000. We'll call it the "the unearned premium you get for the luck of living in America instead of a Tea Party hell like Somalia" tax. Sounds like a very balanced approach -- one extremism cancels out the other. What's shocking is that making people earn their fortunes in maximum increments of $500k probably boosts their incentives for hard work and effort while sharply curtailing their incentives to roll the dice and gamble their money -- and ours -- on get rich quick, take the money and run, schemes where the rewards are privatized but the losses are socialized.

George Lippencott 6 years, 4 months ago

If I understood what you wrote I might respond. center is center.

Jimo 6 years, 4 months ago

Sir, I stand in the center. A registered Republican who never voted for a Democrat in his life until this last decade.

That should give you an inkling how far from "moderate" and "center" you are!

Just because you're not a foaming at the mouth, set the house on fire, Tea Party quack-a-doodle doesn't transform you into a "moderate".

And just because you expect the wealthy to pay their share of taxes doesn't make you someone who "hates" rich people.

Jimo 6 years, 4 months ago

Indeed. Process, structure, and law determine outcomes.

For example, do you think if we did not have a 2 Senator per state rule that rural interests would have such a disproportionate control over political debate? We're actually talking about ending Medicare (whatever euphemisms and pretense the GOP might insist upon) but have not considered, let alone enacted, the end of agricultural welfare -- even while agricultural prices are soaring.

Yet some people speak of the Constitution as if it were divinely inspired (as if the obvious "slavery" rejoinder doesn't instantly disprove that point). The Senate provision I just noted wasn't anyone's idea of a good approach. Rather, it was the crude vote trading compromise that sometimes has to be swallowed to keep things moving. I doubt a single Founder thought that provision would last a single generation without change.

Jimo 6 years, 4 months ago

The possibilities are quite broad for constitutional reform.

Among the modest are making the Senate and the Presidential electoral college democratic. That is, weighting Senate representation by population. And electing Presidents directly by popular vote. (Hello Pres. Al Gore. Hello debt free America!)

Also, adopting the 'California' primary system reform -- non-partisan primaries where the top 2 vote-getters, even if they're the same Party, move on to the general election. In Kansas, for example, this would often mean 2 Repubs, a moderate and a conservative, with the moderate being the probable winner in almost all elections. But that's okay: moderate is where most voters are.

More extreme measures include:

A multiple position legislative system where each district elects 2+ persons per district rather than the single seat, winner takes all system. Such a system would tend to allow broader voices to be represented, which reflects reality - politics isn't really either/or but rather this/that/and some other things too. For example, what's a fiscal conservative but socially liberal voter supposed to do? Can't vote Democratic; can't vote Republican. What about a true libertarian, who hates governmental economic control but yet also deplores gov't spying on its citizens, the war on drugs, and torturing people? Again, can't vote Democratic; can't vote Republican. What's worse: I'd guess that between the libertarians and the fiscal conservative/social liberals, that's half the country forced to go without any real voice in politics!

Another extreme option: a parliamentary system of government uniting the legislative and executive functions. There, the compromise required in government comes right up front: you either have a majority of votes given to you by the voters or you combine multiple parties together, compromising from the beginning, to form a government. It's the most common system in the world and works fairly well for most nations - as long as the voters can make up their minds as to what they want.

The most unwieldy and extreme is a multiple stage, caucus like system. Election to office is the end result of several smaller winnowing processes that force moderation at each stage. For example, voters in Lawrence are assigned to a district along with 999 other voters. They get together at a pre-assigned time (vaguely like the caucus process) and mutually agree on 1 (or 2) representatives of their caucus. In turn, those 1 (or 2) people get together with the representatives from all the other districts, and the same process repeats again. Ultimately, you go through as many stages as the process requires until only 1 man, or woman!, is left standing. By it's nature, that final representative is virtually guaranteed to reflect the exact middle of the political views within the larger district. Such a system also minimizes any role money can play in the process.

George Lippencott 6 years, 4 months ago

Response to Jafs:

It is interesting how we read each other. I have never advocated not cutting Defense. I support rational cuts in Defense. What I did advocate is changing our national strategy so that there is not a resource disconnect between what we fund and what we claim we will do with the forces we buy. Needs to be consistent. That was my reference to Bataan. We continued to have far pacific ambitions while not funding the Navy sufficiently to support those ambitions – and the troops (not the leaders) paid for it. What I did observe is that it takes time to downscale Defense. (Cutting bases for instants must go through a congressionally mandated process that delays closing and reaping any savings for closings for quite a period). I might observe there are many more suggestions for cuts on the NYT link that are not in Defense.

As to SS. We must cut it in some manner. JIMO’s link has many suggestions short of killing it. I have helped advocate some of those suggestions in the past with our Congressional people.

Why is it that everything posted here seems to be at extremes???

jafs 6 years, 4 months ago

I have consistently said we need to both raise revenue and cut spending.

According to Jimo, the burden of the cuts falls "mostly on the Porkagon".

If we agree, then why do you post things that are so provocative and seem to be argumentative, like "we can't tax our way out"? I've never said we can.

George Lippencott 6 years, 4 months ago

Why is that provocative. WE agree that the solution is a bit of revenue and a bit of cuts. "We can't tax our way out" just says that a different way.

What are you reading in?

jafs 6 years, 4 months ago

You asked why everything seems to be at extremes - I suggest that your tendency to engage in argumentative and provocative posts is part of the cause.

If we agree, then we have no need for heated arguments, and yet you seem to want to make our discussions into those - in the past you mentioned it has something to do with your military background.

jafs 6 years, 4 months ago

But you did respond.

If you don't like the atmosphere on here, and want it to be more "moderate", then it would be in your own interests to see in which way your behavior influences that atmosphere.

George Lippencott 6 years, 4 months ago

Yes we need revenue enhancements. Whjat part of restoring the Reagan tax rates for the rich did you not understand?? Doing that actually helps not hurting innocent people. Remember increasing taxes on the middle hurts the middle a big increase hurts a lot

jafs 6 years, 4 months ago

Why are you so argumentative?

It seems that you create arguments even if you agree - why would you do that?

I've said over and over again in many different comments that we need to both raise revenue and cut spending - if you agree with that, why do you start arguments and call me names?

George Lippencott 6 years, 4 months ago


The NYT does not agree with you "on the size of the problem" but rather disagrees with you on the ease of solutions ..."

Wow. Thank you for making that so simple. My SS, military retirement, Medicare, VA benefits, taxation level and all the rest are not needed to balance the budget. You are magnificient.

Jimo 6 years, 4 months ago

No problem as my solution doesn't affect any of those items (I assume the obvious - that the only way you're a multi-millionaire is via Powerball!).

Jimo 6 years, 4 months ago

George -- instead of fuming at how quickly your agenda (there's no point in taxing wealth as it won't solve all our problems) got skewered, why don't you go to that NYT interactive site, play with the numbers, and present some alternative budget balancing scenarios?

Much like the Tea Party on the economy or Republicans on immigration, it's almost as if you don't want to solve anything at all.

I think you'll find that my point is inescapable -- Armageddon isn't required to solve our problems. They are quite manageable so long as you don't refuse all approaches except the obvious ones.

Jimo 6 years, 4 months ago

There are 4 sources to our present dilemma: 1. A weak economy increases spending and decreases revenue. That is (one hopes) a temporary, but primary, issue. That's about 1/3rd of the entire present deficit. Despite endless talk of how expensive it is to deal with this, the real expense is not dealing with it. Unemployed people cost a fortune and the expense doesn't disappear with a "let them eat cake" attitude (which is all we get from the GOP these days, if that!) 2. Tax revenues far below historic levels, mostly resulting from tax cuts that never delivered anything that was promised and were paid for by borrowing trillions in debt (but also low from the weak economy). 3. Military spending both beyond our fiscal ability to sustain and underpinning an unconstitutional global empire (that in turn undermines our security rather than enhances it). (Why again are we in Afghanistan in 2011? That is our "goal"?) 4. Health care expenses--both governmental and private--that cost far more than anywhere else on earth but with no better (and in multiple ways, worse) results. Medicare is eating our budgets away. But that's not a direct consequence of Medicare - the cheapest and most efficient medical plan around. It's because health expenses are unchecked and crowding out everything else: security, education, infrastructure, low taxes, etc.

Right now we have: 1. The GOP awol and the Dems not much better 2. Democrats on board (mostly) but Repubs totally unreasonable and delusional on the topic 3. Both parties bought and paid for by the classic military industrial complex that "spreads the wealth" throughout every Congressional district in return for gorging themselves on your tax dollars 4. Democrats completely unchecked by an awol GOP that refuses to even discuss anything short of laissez faire medicine (perhaps the ultimate oxymoron). Yet, it's only the Dems who are talking seriously about this topic. (I'm not counting platitudes such as tort reform or 'just give control to the states' as serious proposals).

devobrun 6 years, 4 months ago

"A weak economy increases spending and decreases revenue. That is (one hopes) a temporary, but primary, issue. That's about 1/3rd of the entire present deficit. Despite endless talk of how expensive it is to deal with this, the real expense is not dealing with it. Unemployed people cost a fortune and the expense doesn't disappear with a "let them eat cake" attitude (which is all we get from the GOP these days, if that!) "

Unemployed people are that way because there is nothing for them to do, or there is nothing for them that they want to do, or there is nothing for them they can do. This isn't fiscal or economic in nature. It is not about stimulous, or any other monetary policy. I think any assumption that jobs will return is premature. I am not the least optimistic that jobs will return to our economy.

The major reason for that is that our genius machine that drove western economies throughout the 20th century is just about out of raw material. Physics is wrung out. The physics advances that occured up until about 1960 have been followed by technology advances that truly changed the world. But Claude Shannon, Alan Turing and Johnnie von Neumann were 1950.

Since technology based on deterministic science eventually converges to computer run manufacturing, all the good jobs are now being done by computers....including the construction of computers. So we need new horizons, like the 1950s. We need new vision and new opportunities for workers. Well, you are unlikely to get them from physics any time soon.

So where are the new jobs going to come from? What do you need that you don't have? Don't tell me "green". That would mean that we take jobs away from the oil patch and put them in the windmill patch. That is just shifting work around....and windmills don't even work as well as natural gas. It is a wash as far as new jobs are concerned.

I think that new ideas should come in the area of psychology. I think the next new area that needs addressing is people. Gang violence, depression, addictions of all kinds should generate jobs for those who can fix these problems. Too bad the pilot programs and social engineering has been so limited in their results. Psychiatry is the last field chosen by new doctors when applying for residency. It doesn't pay and it doesn't work. And dealing with convicts and the court system is dismal.

devobrun 6 years, 4 months ago

Oh BTW Jimo, Item 2 above is also explained by the last big revenue generating technology, internet. After the bubble burst, day traders stopped buying and selling ideas and found that many of the ideas were not real money generators. Most of the dot coms were just air, but the government reaped huge benefits from non-capital gain stock profits.

Don't look for anything like that for a long time. There aren't any new ideas that are generating profits, even ficticious ones.

And item 3 is easily answered. We went into Afghanistan because the American people wanted it. We went in there and kicked butt on AQ and Taliban and should have left immediately. Instead we tried to be political, social, and caring. The military shouldn't care. It is high time that it is used for it's purpose, which is to kill enemy and destroy the enemy's ability to harm us. End of story.

And finally, number 4. America is the most diverse population in the world. Different cultures have different sensibilities regarding health and life. People move to America because the potential health care they can get is so far superior to that in their own country. In short, people come to America because they want stuff and they are ballsy enough to make the dangerous trip here. When they get here, they want the best. And America offers the best. The best heart surgeons, the best cancer treatment, even the best emergency response. It costs a lot of money. And U.S. technology regarding electronic medical records and computerized hospitals and doctors is an abomination.
Multiple programs that don't use standard interface, format, or data structure. You want a stimulus? Put up a few billion bucks for a competitive software program which will computerize health care in a moonshot or Manhatten project way. What we have now is known in engineering as a kludge.

jafs 6 years, 4 months ago

Actually, I believe a software system like that is part of the new health care legislation, for that very reason - it would increase efficiency as well as care, and decrease stress on medical professionals.

In my experience, and my experience with family members, the quality of our health care system is not commensurate with it's cost - we're not getting high enough quality care for what we're paying.

And, I think the job of the military should be to defend us, and keep us safe, in conjunction with our foreign policy and actions around the world, which would ideally not create more enemies than absolutely necessary.

If jobs don't come back, our economy will never improve significantly.

George Lippencott 6 years, 4 months ago

That is in YHO. I have a different and longer list - also opinion.

George Lippencott 6 years, 4 months ago

JIMO says: George -- instead of fuming at how quickly your agenda (there's no point in taxing wealth as it won't solve all our problems) got skewered, why don't you go to that NYT interactive site"

If that were my opinion, you might have a point. I want to

  1. Tax the rich at pre- Reagan rates
  2. Eliminate most deductions
  3. Eliminate using the tax system to implement national policy
  4. Tax the "poor" at a nominal rate so that the cost of government is apparent to all
  5. Shared "pain" to get ther rest (and there is a rest)

I have posted that repeatedly so either you cannot read or you are deliberately argumentative. You are entitled to your opinion but don’t post it as fact. Are you from the “Hard Left” (see earlier Blog)

There is little reason to play the NYT game. The actual cuts/revenue enhancements will come from a political process - not somebody's notion of reasonable or "right". I might also note that there are many entitlements not included on the NYT list (Pell grants for example). Why?

Jimo 6 years, 4 months ago

So .... we send Medicaid assistance for an 80 year old invalid to afford a nursing home (40% of all nursing home revenue originates from the Medicaid program), and your proposal is that we demand that she (or probably more likely her guardian) write a check for a "nominal" amount back to the Treasury from measly public assistance entitlements she gets so that "the cost of government is apparent" to her? (And pay for an extra level of bureaucrats to keep track of it all!!!!)

Really? I can't figure out whether that turd is just a cut off your nose to spite your face idiocy or whether it's a mean spirited attempt to punish people for being poor in the hope that if you make their lives miserable enough they'll just stop choosing to be poor.

But what I can figure out is that you sir are an ass.

George Lippencott 6 years, 4 months ago

Actually, if you knew what you were talking about you would know that someone in a nursing home on medicaid forfeits almost all of their assets (some issues when they are joint). I believe that they are paid $60 a month for all personal expenses - that is $2.oo a day.

Any other stupic statements? You sure are full of them

usnsnp 6 years, 4 months ago

Social Security is solvent for the next 25 years, the money for social security does not come from the governments general fund, it comes from the Social Security Tax fund so at present it does not add one dollar to the defisit. Yes military spending needs to be cut, but watch, most of the cuts will come from pay and benifits just like everytime there has been major cuts in the military. Why do you think the military gets big boneses for some jobs, ask the military people that have been to our two ongoing wars 4 or more times. If you want a voluntary military you are going to pay high personnel costs, if you dont we will not have enough people to sign up. I know a large number of people would not like to go back to the draft, then they might have to do something for the country.

George Lippencott 6 years, 4 months ago


Well not really. What is in the trust fund is a bunch of IOUs - our elected leaders spent the money - in part getting us iinto this problem.

To redeem the :IOUs" we will have to tax ourselves (again) to raise the revenue needed. One could argue that a good part of the problem is that Social Security is unfunded. The amounts in question approach $500 to 800B a year (almost the size of the annual deficit).

Jimo 6 years, 4 months ago

Here is a brief item from the Economist: http://www.economist.com/blogs/democracyinamerica/2011/08/stimulus-thinking?fsrc=rss

It discusses the astonishing George Lipponcott like claim by an important Tea Party official arguing that we shouldn't be cutting military spending because such spending serves as an economic stimulus, without which economic activity would decline and jobs would be lost.

If you're gob-smacked, you're not alone.

It's unclear why the Tea Party thinks building aircraft carriers has magical powers to employ people but building bridges (and roads and sewer systems and teaching kids and researching diseases, etc., etc., etc.) does not. (What's more, an aircraft carrier isn't exactly a productive asset.)

GDP (economic production) is so easy to understand that a junior high student could follow along. It's as easy as A plus B plus C, where: A = consumer spending (that's you) B = business spending (that LJW) C = government spending

Now if A falls off and B falls off, the only way GDP doesn't fall--that we are all poorer--is if C goes up to make up the difference. A+B+C=GDP That a "moderate" makes this into a questionable proposition, a controversy, makes as much sense as saying that gravity is dubious. Or that GDP is more difficult to understand than the pixies that makes the magic pictures spark with life on your television screen.

George Lippencott 6 years, 4 months ago

And where did I say I was against cutting defense?? Think I have repeatedly said the opposite.

Jimo 6 years, 4 months ago

George you've repeatedly argued against cutting defense. Please, stop.

George Lippencott 6 years, 4 months ago

Wrong. I have observed 1. Cutting it is not a quick solution 2. It should be done in conjunction with a chaneg to national strategy

I have also observed that cutting it is fine by me.

jafs 6 years, 4 months ago


But without A& B going up, the government can't sustain a recovery without generating huge budget deficits.

That's the real problem here - businesses have to hire people, and people have to spend money, both of which are counter-intuitive when the economy's bad - thus we get into a negative downward spiral.

Jimo 6 years, 4 months ago

Here is a chart showing how the various tax burdens at the federal level have changed in the post war era: http://graphics.thomsonreuters.com/F/12/US_TAXGDP1210.gif

Big Take-aways:

  1. Federal tax revenues haven't been this low since Truman. It is an obscenity that there is any discussion of cutting programs for the poor, the needy, the unemployed, children, or the elderly before tax revenues are increased to their historic levels plus the higher level that an aging population unavoidably requires.

  2. Income taxes are falling, particularly corporate income taxes (despite all the squawking about how "high"(!!) they are). This isn't just unsustainable. We have reached the moment where it cannot be sustained at all any longer. If some GOP Congressman was enough a fool to sign a 'no tax' pledge back when the Treasury was running surpluses that Congressman is about to be turned into a pledge-breaker or an ex-Congressman.

  3. The most regressive tax of all - taxes on employment - has exploded. This alone puts paid to your lie this morning about how only half the population pays taxes. Democrats should immediately put forward legislation to end all employment taxes paid by employers and make significant cuts in the rates for the employees, and replace them with a carbon tax (with a refundable(!) credit back to the poor), with a goal of being revenue-neutral to the average income household (roughly $50k). That is, almost all the burden would fall on 6-figure income households after the below $50k folks get compensated with their tax credits.

  4. Estate and gift taxes have shrunk from being a material contributor to the Treasury to being non-existent. Often referred to as "death" taxes, if they aren't reinstated, it's fair to say their absence will be the "death" of us (which is why I included their reimposition in my debt solution). Typical middle class people never did have to pay these taxes and their elimination was a classic example of welfare for the wealthy being sold as a benefit to average people when it was objectively not.

George Lippencott 6 years, 4 months ago

The message is that about half the population pays little or no federal income tax. I find it fascinating that we now consider FICA equivalent to income tax. I guess that is the first step in gutting SS. Since federal income taxes are by far the largest visible levee trying to argue that paying state tax is equivalent is very disingenuous

As far as employment taxes, it seems that some part of us believe that taxes on employers (income, business, what have you) do not affect employees or customers. I would argue that in our economy on many elements a tax on business just gets passed on to the employee or the customer.

Federal tax levels are low because of the Reagan and Bush tax cuts. The rich got away with murder. The rest received a smaller reduction. Some received little at all because tax deductions they used were eliminated. Like all tax issues they are a bit more complicated than "talking points"

I generally agree with you on estate taxes.

Jimo 6 years, 4 months ago

It's important to remember who Adam Smith, founder of capitalism, believed were the "wealth creators."

Smith criticized those with the "disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition.”

Smith aid, this disposition colors the way we view the world, and leads us to conflate wealth and greatness with virtue and poverty and weakness with vice.

You need only to look at this pages to identify those who would lick the sole of a billionaires shoes, thinking him the superior man.

llama726 6 years, 4 months ago

"Now we can tax corporations. We currently tax between 15 and 35% - the latter the second highest in the industrial world."

Corporations pulled in $1.659 trillion in 3rd Quarter of 2010. http://www.nytimes.com/2010/11/24/business/economy/24econ.html

We taxed corporations in a year for 12% of what they profited in a quarter. A 15% annual rate isn't accurate, or even close to accurate. Assuming corporations profited only $4 trillion last year overall, even taxing corporate taxes at a flat 25% would bring in one trillion dollars.

Instead of increasing marginal tax rates, solely, we should probably do away with loopholes, more gentle taxes on stocks and dividends, etc.

Nah. Let's just blame Obama. Good call.

George Lippencott 6 years, 4 months ago

Why did you only pick that piece (legal tax rates) and not the rest of the paragraph. I believe I noted that tax deducaions significantly reduce tax payments. I also noted that they are currently paying at about 40% of what they were a decade ago. Is your idelogogy blinding you to the real message. That was that even if you return them to historic tax levels it does not avoid significant cuts/tax increases. I calculated their contribution at the higher historic rate.

llama726 6 years, 4 months ago

Where have I ever argued that cuts aren't needed?

Centerville 6 years, 4 months ago

I"m still not getting the feed-the-government-first thing. I must be too libertarian for this place.

Nellane Laney Croan Stussie 6 years, 4 months ago

Obama's doing great!

Washington Post ... The recent report written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.

Any wonder why his team of "economic advisors" have been jumping ship?

jafs 6 years, 4 months ago

George, this one's for you.

It's too bad that the irony of your sending me a confrontational private message via e-mail as an attempt to argue that you're not overly aggressive will probably be lost on you.

Since you have made this personal, I will have to regretfully ask you not to send me any more private messages, and not to respond to my posts any longer.

For some reason, you seem to want to get into a fight with me, and I'm not interested in that.

George Lippencott 6 years, 4 months ago

Thank you Jafs. I will, of course, comment on anything you post. I appreciate your opinion on my style. I do not share it. You seem to have a problem when I do not agree with you - that seems to be your definition of confrontational. You do not seem to have a problem confronting others with whom you do not agree??

jafs 6 years, 4 months ago

It's my understanding that responding to people's posts after being requested to stop doing so is a violation of the terms of service for this forum.

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