News Should the Bush tax cuts be extended?

[nismaratwork]

I was trying to explain that DHS was made up of existing agencies it did not add a level of bureaucracy it reorganized existing agencies. INS for example ceased to exist as an agency and its people were placed under CBP and ICE. The law enforcement authorities came with the agencies that were brought into DHS. Not new just new names. Same thing happened when the Bureau of narcotics and dangerous drugs became DEA only this was much larger in scope.

OK, I see what you're saying, but in addition to the reorganization (and expansion of ICE) there is in fact a completely new bureaucracy which oversees it all. http://www.dhs.gov/xabout/careers/jobfinder.shtm In short, while the organizations it oversees have been rearranged, there is a job to oversee each of them. DHS added to the bulk of government and played musical chairs, it certainly was not a simple name-change or reduction.

 

[nismaratwork]

The business doesn't pay income taxes, instead the business income (or losses) are passed on to the shareholders which then pay tax on that income (or loss) the same as any other income (I assume this avoids FICA and SS medical taxes).

You are correct on all counts, including the last two. The notion that small business is going to be treated like a single wealthy individual is just the usual scare-tactic.

 

[turbo]

Let's all remember that these tax cuts came with an expiration date, and that there was no assurance that they would be renewed. A return to a pre-cut marginal rate on incomes over $250K is not exactly a surprise. It is also a good idea to keep perspective on another thing. For the first $200K (individual) or $250K (couple) earned by the wealthy, they would enjoy the same tax rates as the rest of us. The pre-cut marginal tax would only kick in on earnings in excess of those amounts.

It would be a good move to extend the cuts for the middle-class, whose wages have been stagnant. And as I pointed out, the wealthy would benefit from the extension to the tune of all the money they make before hitting the marginal rate for high earners. The wealthiest 1-2% (whose wealth has climbed faster than the general populace) shouldn't feel too encumbered by losing the 2-3% cut on income above the $200-250K levels.

 

[nismaratwork]

Let's all remember that these tax cuts came with an expiration date, and that there was no assurance that they would be renewed. A return to a pre-cut marginal rate on incomes over $250K is not exactly a surprise. It is also a good idea to keep perspective on another thing. For the first $200K (individual) or $250K (couple) earned by the wealthy, they would enjoy the same tax rates as the rest of us. The pre-cut marginal tax would only kick in on earnings in excess of those amounts.

It would be a good move to extend the cuts for the middle-class, whose wages have been stagnant. And as I pointed out, the wealthy would benefit from the extension to the tune of all the money they make before hitting the marginal rate for high earners. The wealthiest 1-2% (whose wealth has climbed faster than the general populace) shouldn't feel too encumbered by losing the 2-3% cut on income above the $200-250K levels.

...And yet they have the capacity to make the most noise, and it doesn't take a genius to figure out that making this a broad "social" issue, or a fear issue makes this all very difficult.

 

[mheslep]

... The notion that small business is going to be treated like a single wealthy individual is just the usual scare-tactic.

How do you know this to be the case? Edit: yes of course there are various forms small business incorporation and sole proprietorships, but I don't see the distribution addressed here.

 

[nismaratwork]

How do you know this to be the case? Edit: yes of course there are various forms small business incorporation and sole proprietorships, but I don't see the distribution addressed here.

See post #149

 

[mheslep]

See post #149

I did, that's another poster and true or not it is not authoritative, and it doesn't explain your claim in #152 about 'scare tactics'. For example, in the case of the sole proprietorship there is no legal difference between the business and the owner. That is, for that case the net profits of the business in do indeed get reported directly as income.

 

[flynjack]

All I know is it doesn't take a big business to have an income of 250,000. I also know that in order to grow a business the profits are reinvested in the business. Less profits due to taxes, then less to reinvest in growth and fewer jobs created. Doesn't seem like rocket science to me. There is no disputing that small businesses are the largest employer overall. I think the 250.000 is a poorly chosen and arbitrary number someone pulled out of their posterior.

 

[nismaratwork]

I did, that's another poster and true or not it is not authoritative, and it doesn't explain your claim in #152 about 'scare tactics'. For example, in the case of the sole proprietorship there is no legal difference between the business and the owner. That is, for that case the net profits of the business in do indeed get reported directly as income.

This isn't complex: if you're filing your business under 1040 then you're going to get hit, but if you S corp, LLC, LLP, etc... this just does not apply. Do you, or any others wailing about how this is going to (to quote flynjack) "destroy the country", have an analysis of how when it makes sense for a small business to form an LLC or LLP? Remember, you have to be able to report your business as personal income for this to effect a business and not an individual, and have income in a relatively narrow margin over 250K before you should be filing as an LLC/LLP or corp.

flynjack: What evidence do you have that small business primarily fall into the range where this tax would harm them, and when it makes more sense to form an LLC/LLP or corporation? You're subjected to different taxes then, but of course filing under 1040 with incomes far in excess of 250,000 is a fine way to dodge taxes. How about some evidence.

 

[nismaratwork]

All I know is it doesn't take a big business to have an income of 250,000. I also know that in order to grow a business the profits are reinvested in the business. Less profits due to taxes, then less to reinvest in growth and fewer jobs created. Doesn't seem like rocket science to me. There is no disputing that small businesses are the largest employer overall. I think the 250.000 is a poorly chosen and arbitrary number someone pulled out of their posterior.

It's not rocket science, it's economics, also a notably complex bit of work. What evidence do you have that this is an arbitrary number, and that this will lead to fewer jobs being created? You've set out a scenario sans support. mheslep would probably just say, "cite?", so I'll save him the trouble.

 

[flynjack]

First, I haven't said anything about "destroying the country" Have no clue where you got that. Second I look for some citations to support my assertion that 250,000 seems a poorly chosen cutoff. Show me where increasing taxes will assist in increasing employment, and overall economic health. Maybe if they cut spending and were buying down the debt, increasing taxes would make some sense.

 

[rcgldr]

S-Corporation

The business doesn't pay income taxes, instead the business income (or losses) are passed on to the shareholders which then pay tax on that income (or loss) the same as any other income. (I assume this avoids FICA and SS medical taxes).

How do you know this to be the case?

See post #149

http://en.wikipedia.org/wiki/S_corporation

 

[flynjack]

In 2005 the average "small buisness" income was 233,600.00. This was the basis for the cut off. In 2010 I would venture just with the inflation over the last 5 years it would be closer to 240,000. Of course this was based on average pay of small business owners. There is some disagreement about exactly what a small business is. Perhaps less arbitray then my assertion, if you buy the statistics. I still contend that this will not assist the general economy and job growth.

 

[turbo]

Warren Buffett's (2nd richest American) take on extending the Bush tax cuts.

http://www.cnbc.com/id/39321861/

Rather than cut and paste, just watch the interview.

 

[turbo]

In 2005 the average "small buisness" income was 233,600.00. This was the basis for the cut off. In 2010 I would venture just with the inflation over the last 5 years it would be closer to 240,000. Of course this was based on average pay of small business owners. There is some disagreement about exactly what a small business is. Perhaps less arbitray then my assertion, if you buy the statistics. I still contend that this will not assist the general economy and job growth.

Those taxes are not levied on "income" but on net profit. And only about 3% of small businesses actually report $250K or more in net profit per the Joint Committee on Taxation.

http://www.washingtonmonthly.com/archives/individual/2010_09/025759.php

 

[mheslep]

Well C-Corporations do. If an S-Corporation, the business will pay at the individual rate. The corporate tax rate paid by C-Corporations varies depending on the size of the business. I don't know how LLCs and LLPs file taxes.

I know how my LLP is taxed: distributed shares reported by schedule K's are taxed at the individual rate. Thus income from LLPs above $200k/$250k will be impacted by the pending Jan 1 individual tax rate increase.

 

[mheslep]

http://en.wikipedia.org/wiki/S_corporation

The question is once the S-Corp distributions hit the personal tax filing as business income, at what rate are they taxed? If, as CAC1001 states, those shares are taxed at personal rates, then the Jan 1 increase in rates will also impact S-Corps share receivers where total income is above $200/$250k.

 

[mheslep]

The Joint Committee on Taxation statement:

The staff of the Joint Committee on Taxation estimates that in 2011 just under 750,000 taxpayers with net positive business income (3 percent of all taxpayers with net positive business income) will have marginal rates of 36 or 39.6 percent under the President's proposal, and that 50 percent of the approximately $1 trillion of aggregate net positive business income will be reported on returns that have a marginal rate of 36 or 39.6 percent.

http://www.taxfoundation.org/blog/show/26652.html

So to my mind if the concern is only about counting how many people will pay more, only the head count clause matters. If the concern is about creating more jobs, only the business income clause matters.

 

[turbo]

You left out some critical details in your citation. The 50% represents the portion of business income that would be reported on returns that have a higher marginal rate. Marginal rate means that the last dollar of income is taxed at that level. If the Bush-era tax cuts are restored for the under $200K brackets, all the profit made by business to get to that marginal rate will be taxed at the lower rate that the middle-class will pay.

Unless you have a wildly-successful small business and fall in the top 2-3% of net profits, your business would not be effected at all by letting the marginal rates return to pre-Bush-cut levels.

Second, even if you take off the word "small" from Boehner's quote, it is still a misreprentation of JCT's report. JCT said that approximately half of business income is earned by tax returns whose last dollar is taxed under the individual income tax. If a single person earns $201,000 in income, all from his small business, not all of that income would be taxed at the higher tax rates if the Bush tax cuts were to expire. JCT was merely classifying tax returns by the tax rate they pay on their last dollar of income and then presenting statistics about tax returns in those groups. Again, even if you are in the top tax bracket, that does not mean all of your income was taxed at the highest rate.

 

[Meatbot]

Of course, but it's too little too late. We need to vastly cut taxes across the board. Eliminate Social Security, Medicare, Medicaid, and hundreds of other agencies. Close foreign military bases. Abolish the Fed and fiat monetary system. Balance the budget and pay OFF the debt. Charities will support the elderly.

Of course the government has neither the stones nor the desire to do that, so we will all go down in flames as the only other options are to hyperinflate or default. Either way it ain't pretty. All empires must fall as long as humans are mortal - it's human nature. Prepare now and get back in the game after TSHTF.

 

[nismaratwork]

First, I haven't said anything about "destroying the country" Have no clue where you got that. Second I look for some citations to support my assertion that 250,000 seems a poorly chosen cutoff. Show me where increasing taxes will assist in increasing employment, and overall economic health. Maybe if they cut spending and were buying down the debt, increasing taxes would make some sense.

I never claimed that this would help the economy, but you have claimed it would hurt it... prove it.

 

[nismaratwork]

In 2005 the average "small buisness" income was 233,600.00. This was the basis for the cut off. In 2010 I would venture just with the inflation over the last 5 years it would be closer to 240,000. Of course this was based on average pay of small business owners. There is some disagreement about exactly what a small business is. Perhaps less arbitray then my assertion, if you buy the statistics. I still contend that this will not assist the general economy and job growth.

Cite? This conflicts with the citation provided by Turbo-1

 

[nismaratwork]

Of course, but it's too little too late. We need to vastly cut taxes across the board. Eliminate Social Security, Medicare, Medicaid, and hundreds of other agencies. Close foreign military bases. Abolish the Fed and fiat monetary system. Balance the budget and pay OFF the debt. Charities will support the elderly.

Of course the government has neither the stones nor the desire to do that, so we will all go down in flames as the only other options are to hyperinflate or default. Either way it ain't pretty. All empires must fall as long as humans are mortal - it's human nature. Prepare now and get back in the game after TSHTF.

Is the bolded portion your opinion or something for which you have some objective support?

 

[flynjack]

http://www.zdnet.com/blog/itfacts/average-small-business-owner-salary-is-233600/11901

Average small business salary

Now please cite how raising taxes is going to help employment or the economy in general.

 

[OmCheeto]

Why is it then that deficit spending goes up under Republican presidents, and down under Democratic presidents?

It doesn't.

It, as a general rule, does.

We've been over this https://www.physicsforums.com/showpost.php?p=2589752&postcount=247". Ad absurdum it seems like sometimes...

Maybe I'm getting too old for the internet. There's no fight left... Just, just, oooold graphs...

Whoweee! Let's now argue about where the blue line didn't follow the curve for 5 minutes and is therefore totally wrong.

 

[turbo]

http://www.zdnet.com/blog/itfacts/average-small-business-owner-salary-is-233600/11901

Average small business salary

Now please cite how raising taxes is going to help employment or the economy in general.

Average small business owner salary is $233,600. (from your link) Now let's assume that the average small business owner is too stupid to take advantage of personal retirement accounts, business expense write-offs to improve the value of his/her business while reducing their taxable income, etc. In that case (highly unlikely, I might add!) they would only pay the higher marginal tax rate on their taxable income in excess of 200K. For all the money earned up to that level, they would only pay the rate that the middle-class pays. It they are married, filing jointly ($250K bracket), they wouldn't pay the higher marginal rate on even a penny of their wages.

Even the tax-code-ignorant small business owner would not be hurt by letting the higher-bracket marginal tax-rate go back to pre-Bush levels. There is entirely too much obfuscation , distortion, and outright lies being bandied about in the press on this subject, thanks to the neo-cons. The average voter has NO idea how many tax advantages accrue to the very rich in our society. The GOP will fight to the death for the preservation of the Bush tax cuts for the very rich, even to the point of denying the extension of those cuts for those of modest means. That is not fiscal conservatism - it is a sign that the US is headed deeper into an oligarchy, and that is troubling.

Edit: The richer you are, the more likely that significant portions of your income are derived from capital gains, dividends, and other sources that middle-class taxpayers don't enjoy. If you are a middle-class wage-earner, the IRS has a handle on your income (wages). If you are earning from a variety of sources, there are lots of ways to let you offset gains here with losses there, etc.

This might be a really good time to prove to us that there is a good reason to believe that these small increases in the marginal tax rates above $200K would slow our economy and cost jobs.

 

[flynjack]

Keep in mind that the Bush tax cuts aside there are other increases in taxes coming down the line. No one has yet sorted out the full cost of health care bill in terms of the small business owner, but most expect cost to go up. The proof is in the pudding. I suggest you refer to 1929 through 1933 and see how the tax increases then were so helpful.

 

[nismaratwork]

http://www.zdnet.com/blog/itfacts/average-small-business-owner-salary-is-233600/11901

Average small business salary

Now please cite how raising taxes is going to help employment or the economy in general.

This is drawn from Salary.com and... oh look:

The average small business owner or chief executive brings home an annual salary of $233,600, according to Salary.com.

That's BELOW the $250,000 threshold, so no issue, and that's the HEAD of the small business who is presumably making the most. You've just shot your argument in the foot.

edit: Why would you link to a source to support your position, that in fact destroys it? I'm thrilled, don't get me wrong, but didn't you bother to read the article?!

 

[CAC1001]

Let's all remember that these tax cuts came with an expiration date, and that there was no assurance that they would be renewed.

True, but nothing wrong with making them permanent anyhow.

It would be a good move to extend the cuts for the middle-class, whose wages have been stagnant.

Wages are stagnant, but incomes per capita have been increasing for decades. Remember wages are only one part of income.

The wealthiest 1-2% (whose wealth has climbed faster than the general populace) shouldn't feel too encumbered by losing the 2-3% cut on income above the $200-250K levels.

I don't think it's 2-3% so much as 2-3 percentage points, but if my math is right (correct me if wrong!), then a tax increase from 35% to 39.6% is about a 12.5% tax increase.

 

[CAC1001]

It, as a general rule, does.

We've been over this https://www.physicsforums.com/showpost.php?p=2589752&postcount=247". Ad absurdum it seems like sometimes...

Maybe I'm getting too old for the internet. There's no fight left... Just, just, oooold graphs...

Whoweee! Let's now argue about where the blue line didn't follow the curve for 5 minutes and is therefore totally wrong.

What that then mostly points out I would say is not that Republican policies result in deficits so much as the Republicans rarely adhere to their claims of fiscal conservatism.

Although I do not believe if Clinton had been able to govern as he'd wished initially that we ever would have seen any shrinking deficit under him.

With President Bush, the housing bubble initially helped close the deficit up to 2007 and almost resulted in a surplus, but then the crash caused revenues to drop, then in 2008 the financial system bailouts were needed.

I don't know if I agree with the last part of the graph that claims that deficit spending has come down under President Obama. He signed an $800+ billion stimulus bill and a $1 trillion+ healthcare bill (albeit it hasn't gone into play yet).

Here is a graph from Wikipedia showing the historical debt as a percentage of the GDP (bottom graph):

http://en.wikipedia.org/wiki/File:USDebt.png

Debt as a percent of GDP declined consistently up until Reagan, where it shot up again (although if one sees the Reagan policies as Keynesian (military Keynesianism and his demand-side tax cuts), in a sense he did exactly what was called for according to the Keynesians, as the Volcker Recession from fixing the inflation was (at the time) the worst recession since the Great Depression). Then debt growth topped out in the 1990s, then began declining (I am guessing when the surplus was reached), then began gradually increasing again under Bush (probably due to the 2000 Dot Com bubble bursting, along with Bush's healthcare policy and the wars in Iraq and Afghanistan), then shot up big-time from 2008 and on due to the crisis.

 

[nismaratwork]

What that then mostly points out I would say is not that Republican policies result in deficits so much as the Republicans rarely adhere to their claims of fiscal conservatism.

Although I do not believe if Clinton had been able to govern as he'd wished initially that we ever would have seen any shrinking deficit under him.

You've provided a fascinating glimpse into the process of resolving cognitive dissonance: The Repubs don't stick to their principles, but it was their moderating influence which ALLOWED Clinton to be successful. Aiya...

 

[CAC1001]

The Repubs don't stick to their principles,

Under Republican presidents, most of the time, no.

but it was their moderating influence which ALLOWED Clinton to be successful. Aiya...

Yes, it was. Because they had control of Congress, and had gained control by running on the "Contract With America," they worked to keep Clinton conservative. With Bush, they did a 180 and went for big government. Now with Obama, they are back to conservatism.

Clinton tried getting government healthcare passed, also a "big" I think $30 billion stimulus or something at the time, then when the Republicans won control of Congress in 1994, Peter Jennings said the American people had "thrown a fit" and Clinton pivoted to the center, although he was iffy about that at first. Clinton vetoed welfare reform multiple times before signing it and at first did not want to complete NAFTA. But he moved to the center eventually and the Democrats did not like this.

 

[WhoWee]

What that then mostly points out I would say is not that Republican policies result in deficits so much as the Republicans rarely adhere to their claims of fiscal conservatism.

Although I do not believe if Clinton had been able to govern as he'd wished initially that we ever would have seen any shrinking deficit under him.

With President Bush, the housing bubble initially helped close the deficit up to 2007 and almost resulted in a surplus, but then the crash caused revenues to drop, then in 2008 the financial system bailouts were needed.

I don't know if I agree with the last part of the graph that claims that deficit spending has come down under President Obama. He signed an $800+ billion stimulus bill and a $1 trillion+ healthcare bill (albeit it hasn't gone into play yet).

Does anyone remember Carter's (seemingly endless) TV appearances where he spoke of the need to address Soviet military capabilities? Carter knew we needed to increase defense spending - perhaps his Left base didn't approve? Then, I seem to recall Reagan saying something like 'don't worry - I know what to do' and then he spent more than Carter ever thought possible. We can argue whether the Soviet Union would have collapsed regardless - but we'll never know.

Economically speaking, I think Bush Sr. and then Clinton enjoyed the fruits of their predecessors. I also agree that Clinton would have spent a great deal on social programs early in his term if permitted.

I was never a fan of Bush Jr. Clearly 9/11 has the moment in time that defined his Presidency. It greatly impacted the economy and (his decisions) set us on a course of deficit spending. Without 9/11, I think Bush would have focused more on social programs, including health care and immigration, but deficits would have grown much slower.

As for Obama, the graph seems to demonstrate future projections? Based on Obama's claim that Stimulus would hold the unemployment rate below 9% - I'll take the projections with a grain of salt.

On the other hand, the President AFTER Obama (not named - anyone want to guess) seems to have things under control - just saying.

 

[WhoWee]

Btw, why doesn't our Poll have "Let the tax cuts expire" as a choice?

 

[OmCheeto]

Btw, why doesn't our Poll have "Let the tax cuts expire" as a choice?

We covered that on pages one and two of this thread.

The closest you can get to that is choice #3: Extend some of the Bush tax cuts temporarily

Which is exactly what will happen, IMHO.

 

[WhoWee]

I guess the option couldn't be added after the polling began?

 

[OmCheeto]

You've provided a fascinating glimpse into the process of resolving cognitive dissonance: The Repubs don't stick to their principles, but it was their moderating influence which ALLOWED Clinton to be successful. Aiya...

Wow. Cognitive dissonance. I could never use that in a sentence. Let's see if I understand the concept (thank you wiki!) enough to construct something dissonant:

http://query.nytimes.com/gst/fullpage.html?res=9901E5DC143FF936A15753C1A962958260"
By MICHAEL WINES,
October 25, 1994

Mr. Clinton mocked critics of his strategy, starting with Republicans. "When the deficit reduction plan passed," he said, referring to the $450 billion of tax increases and spending cuts enacted in 1993, "there was speech after speech saying, 'Gosh, if we do this, the economy will collapse, the deficit will explode, middle-class taxpayers will be bankrupted, this will be the end of the world.' " None of that happened, the President noted.

I don't recall the world ending between 1993 and 2009. But I do have a bad memory, so it may have happened.

So what did we have for the last 9 years? Tax cuts and spending increases? And what just happened?

Wait. Let me guess. "See! It was Clinton's fault. It all came true. It was just delayed by the democrats for 15 years."

 

[nismaratwork]

Wow. Cognitive dissonance. I could never use that in a sentence. Let's see if I understand the concept (thank you wiki!) enough to construct something dissonant:


I don't recall the world ending between 1993 and 2009. But I do have a bad memory, so it may have happened.

So what did we have for the last 9 years? Tax cuts and spending increases? And what just happened?

Wait. Let me guess. "See! It was Clinton's fault. It all came true. It was just delayed by the democrats for 15 years."

Ow... my think-box! Yes, I do believe you have a firm grasp on the concept now. As a tiny aside, one of my favorite examples of cognitive dissonance is the behaviour of doomsday cults.

http://skepdic.com/cognitivedissonance.html]For[/PLAIN] example, Marian Keech was the leader of a UFO cult in the 1950s. She claimed to get messages from extraterrestrials, known as The Guardians, through automatic writing. Like the Heaven's Gate folks forty years later, Keech and her followers, known as The Seekers or The Brotherhood of the Seven Rays, were waiting to be picked up by flying saucers. In Keech's prophecy, her group of eleven was to be saved just before the Earth was to be destroyed by a massive flood on December 21, 1954. When it became evident that there would be no flood and the Guardians weren't stopping by to pick them up, Keech became elated.
She said she'd just received a telepathic message from the Guardians saying that her group of believers had spread so much light with their unflagging faith that God had spared the world from the cataclysm (Levine 2003: 206). More important, the Seekers didn't abandon her. Most became more devoted after the failed prophecy. (Only two left the cult when the world didn't end.) "Most disciples not only stayed but, having made that decision, were now even more convinced than before that Keech had been right all along...Being wrong turned them into true believers (ibid.)." Some people will go to bizarre lengths to avoid inconsistency between their cherished beliefs and the facts. But why do people interpret the same evidence in contrary ways?

The book from which this is drawn, is a classic by Leon Festinger, Henry Riecken, and Stanley Schachter

http://en.wikipedia.org/wiki/When_Prophecy_Fails

http://en.wikipedia.org/wiki/When_Prophecy_Fails]Sequence[/PLAIN] of events
Festinger and his colleagues infiltrated Mrs. Keech's group and reported the following sequence of events:[3]

Prior to December 20. The group shuns publicity. Interviews are given only grudgingly. Access to Keech's house is only provided to those who can convince the group that they are true believers. The group evolves a belief system—provided by the automatic writing from the planet Clarion—to explain the details of the cataclysm, the reason for its occurrence, and the manner in which the group would be saved from the disaster.
December 20. The group expects a visitor from outer space to call upon them at midnight and to escort them to a waiting spacecraft . As instructed, the group goes to great lengths to remove all metallic items from their persons. As midnight approaches, zippers, bra straps, and other objects are discarded. The group waits.

12:05 A.M., December 21. No visitor. Someone in the group notices that another clock in the room shows 11:55. The group agrees that it is not yet midnight.

12:10 A.M. The second clock strikes midnight. Still no visitor. The group sits in stunned silence. The cataclysm itself is no more than seven hours away.

4:00 A.M. The group has been sitting in stunned silence. A few attempts at finding explanations have failed. Keech begins to cry.

4:45 A.M. Another message by automatic writing is sent to Keech. It states, in effect, that the God of Earth has decided to spare the planet from destruction. The cataclysm has been called off: "The little group, sitting all night long, had spread so much light that God had saved the world from destruction."
Afternoon, December 21. Newspapers are called; interviews are sought. In a reversal of its previous distaste for publicity, the group begins an urgent campaign to spread its message to as broad an audience as possible.

 

[mheslep]

Unless you have a wildly-successful small business and fall in the top 2-3% of net profits,

Not by profit, 2-3% is by business head count.

 

[OmCheeto]

Ow... my think-box! Yes, I do believe you have a firm grasp on the concept now. As a tiny aside, one of my favorite examples of cognitive dissonance is the behaviour of doomsday cults.

hmmm... I wonder if fox news and it's followers could be considered a doomsday cult?

But back to the subject of taxes. I'd like to see a wealth tax imposed. Perhaps 1% on everyone with a net worth of $50,000 or more. Though by my calculations*, that would generate less than $100 billion a years, or about 3% of a $3 trillion dollar budget.

Might make the general public happier though. God knows things go to hell when we're not happy. Think of all the smiles on 300,000,000 faces when Bill Gates has to pay $540 million in taxes rather than the paltry $5 million he's rumored to pay.



http://finance.yahoo.com/banking-budgeting/article/103815/Where-Do-You-Stand-on-America%27s-Wealth-Spectrum"
110,000,000 households
$86,000 average wealth

 

[mheslep]

But back to the subject of taxes. I'd like to see a wealth tax imposed. ...

Its been tried. Guess what happened?

[...]Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.

http://online.wsj.com/article/SB124329282377252471.html

But there is also little doubt that some rich people moved out or filed their taxes in other states with lower burdens. One-in-eight millionaires who filed a Maryland tax return in 2007 filed no return in 2008. Some died, but the others presumably changed their state of residence. (Hint to the class warfare crowd: A lot of rich people have two homes.)

http://online.wsj.com/article/SB10001424052748703976804575114241782001262.html

Maryland Was Depending On Taxing Millionaires, But They're Disappearing
May 14, 2009
One of Maryland's budget-balancing tactics - asking millionaires to pay more money to the state - appears to be backfiring as the number of the highest-earning taxpayers dwindles with the flagging economy.

A year ago, Maryland became one of the first states in the nation to create a higher tax bracket for millionaires as part of a broader package of maneuvers intended to help balance the state's finances and make the tax code more progressive.

But as the state comptroller's office sifts through this year's returns, it is finding that the number of Marylanders with more than $1 million in taxable income who filed by the end of April has fallen by one-third, to about 2,000. Taxes collected from those returns as of last month have declined by roughly $100 million.

http://articles.baltimoresun.com/2009-05-14/news/0905130138_1_higher-tax-bracket-individual-income-franchot

 

[nismaratwork]

Its been tried. Guess what happened?


http://online.wsj.com/article/SB124329282377252471.html


http://online.wsj.com/article/SB10001424052748703976804575114241782001262.html


http://articles.baltimoresun.com/2009-05-14/news/0905130138_1_higher-tax-bracket-individual-income-franchot

OK, so make it federal (and on something a bit higher than 50K). If people decide to become expats en masse, then I guess Trump was right (for the first time in his life).

 

[OmCheeto]

OK, so make it federal (and on something a bit higher than 50K). If people decide to become expats en masse, then I guess Trump was right (for the first time in his life).

Yes, it would have to be a federal tax. And it's not an income tax on the wealthy, it's a wealth tax.
Say your house is valued at $100,000 and you have $100,000 in the stock market.
You would have to pay an extra $2000 per year. ($200,000 * 1%)

And speaking of Trump, this was actually his idea a few years ago, when our debt was only half of what it is now.

In 1999, Donald Trump proposed a once off 14.25% wealth tax on the net worth of individuals and trusts worth $10 million or more. Trump claimed that this would generate $5.7 trillion in new taxes, which could be used to eliminate the national debt.

A wealth tax is generally conceived of as a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock (rather than flow), including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and unincorporated businesses; and corporate stock, financial securities, and personal trusts.

 

[Gokul43201]

Although I do not believe if Clinton had been able to govern as he'd wished initially that we ever would have seen any shrinking deficit under him.

Clinton initially had a Dem Congress ... in the Senate and the House ... for two years (1993 & 1994) ... and he was cutting deficits during that time ... at about the same rate that he continued to cut deficits under a Republican Congress.

http://en.wikipedia.org/wiki/103rd_United_States_Congress

http://www.usgovernmentrevenue.com/...tack=1&size=m&title=&state=US&color=c&local=s

 

[nismaratwork]

Yes, it would have to be a federal tax. And it's not an income tax on the wealthy, it's a wealth tax.
Say your house is valued at $100,000 and you have $100,000 in the stock market.
You would have to pay an extra $2000 per year. ($200,000 * 1%)

And speaking of Trump, this was actually his idea a few years ago, when our debt was only half of what it is now.

Yes well, his idea NOW is that taxing the rich will cause them to leave the COUNTRY.

 

[nismaratwork]

Clinton initially had a Dem Congress ... in the Senate and the House ... for two years (1993 & 1994) ... and he was cutting deficits during that time ... at about the same rate that he continued to cut deficits under a Republican Congress.

http://en.wikipedia.org/wiki/103rd_United_States_Congress

http://www.usgovernmentrevenue.com/...tack=1&size=m&title=&state=US&color=c&local=s

I'm not kidding about the whole "cognitive dissonance" issue... just wait for the response, which I'm guessing presents other reasons centered around health care and other matters which return credit to the relevant party. Graphs are notoriously ineffective in challenging faith, and this kind of thing is a kind of faith.

Convinced me though... not that I needed it. If I ever need to shove this in someone's face it'll come in handy. Thanks Gokiul.

 

[mheslep]

One will search in vain for any mention of 'Clinton', 'Gingrich', or 'H.W. Bush' in the graph above, which is simply and appropriately labeled 'Federal Deficit' of the US Government.

 

[turbo]

One will search in vain for any mention of 'Clinton', 'Gingrich', or 'H.W. Bush' in the graph above, which is simply and appropriately labeled 'Federal Deficit' of the US Government.

Is the graph false because one axis is not labeled in a way that conforms to your political views? We should be able to look at the time-line and wonder why the deficit trended that way, shouldn't we? What is your alternative explanation?

Despite the very self-aggrandizing posturing of the Republicans of the last few decades, they have adopted dangerous and radical fiscal policies that have plunged our country into debt. I cannot support the Democrats because they have supported many of those initiatives and have failed to stop the Republican raids on our treasury. Both parties are to blame for the crap that we have to wade through, though the GOP is clamoring most loudly for "more of the same" W policies.

 

[Gokul43201]

One will search in vain for any mention of 'Clinton', 'Gingrich', or 'H.W. Bush' in the graph above, which is simply and appropriately labeled 'Federal Deficit' of the US Government.

Saving this quote for a rainy day!

 

[OmCheeto]

One will search in vain for any mention of 'Clinton', 'Gingrich', or 'H.W. Bush' in the graph above, which is simply and appropriately labeled 'Federal Deficit' of the US Government.

I'm afraid I don't understand the graph. There was never a year in that time span when deficit spending went negative. It therefore makes no sense that it could be negative compared to GDP. The graph is the right shape, but the national debt has gone up every year since I was born.

This is why I went to the http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm" to create my graphs.

Ha! Between the age of 1 and 2, the national debt went up $2.6 billion. hmmm... currently: $1.9 trillion/365 days/24 hours yields $2.6 billion dollars in added debt every 12 hours.

Wow. No wonder everyone is mad at Obama. He's spending like a drunken whore in a sailor house.

Historical Debt Outstanding (since OmCheeto was born)
Deficit spending can be derived easily by comparing 2 adjacent year debt values.
09/30/2009 11,909,829,003,511.75
09/30/2008 10,024,724,896,912.49
09/30/2007 9,007,653,372,262.48
09/30/2006 8,506,973,899,215.23
09/30/2005 7,932,709,661,723.50
09/30/2004 7,379,052,696,330.32
09/30/2003 6,783,231,062,743.62
09/30/2002 6,228,235,965,597.16
09/30/2001 5,807,463,412,200.06
09/30/2000 5,674,178,209,886.86
09/30/1999 5,656,270,901,615.43
09/30/1998 5,526,193,008,897.62
09/30/1997 5,413,146,011,397.34
09/30/1996 5,224,810,939,135.73
09/29/1995 4,973,982,900,709.39
09/30/1994 4,692,749,910,013.32
09/30/1993 4,411,488,883,139.38
09/30/1992 4,064,620,655,521.66
09/30/1991 3,665,303,351,697.03
09/28/1990 3,233,313,451,777.25
09/29/1989 2,857,430,960,187.32
09/30/1988 2,602,337,712,041.16
09/30/1987 2,350,276,890,953.00
09/30/1986 2,125,302,616,658.42
09/30/1985 1,823,103,000,000.00
09/30/1984 1,572,266,000,000.00
09/30/1983 1,377,210,000,000.00
09/30/1982 1,142,034,000,000.00
09/30/1981 997,855,000,000.00
09/30/1980 907,701,000,000.00
09/30/1979 826,519,000,000.00
09/30/1978 771,544,000,000.00
09/30/1977 698,840,000,000.00
06/30/1976 620,433,000,000.00
06/30/1975 533,189,000,000.00
06/30/1974 475,059,815,731.55
06/30/1973 458,141,605,312.09
06/30/1972 427,260,460,940.50
06/30/1971 398,129,744,455.54
06/30/1970 370,918,706,949.93
06/30/1969 353,720,253,841.41
06/30/1968 347,578,406,425.88
06/30/1967 326,220,937,794.54
06/30/1966 319,907,087,795.48
06/30/1965 317,273,898,983.64
06/30/1964 311,712,899,257.30
06/30/1963 305,859,632,996.41
06/30/1962 298,200,822,720.87
06/30/1961 288,970,938,610.05
06/30/1960 286,330,760,848.37
06/30/1959 284,705,907,078.22