The loud cry is being heard (especially by the Obama Administration) ... TAX THE RICH! Will that solve our problem? Consider this: if we were to DOUBLE the current tax collections on all personal AND business income, we still wouldn't have enough to balance the annual budget. Taxing the rich is just another one of those "class envy" tactics that is being used by the administration in order to shift attention away from our real problem. What is that "problem?" Ronald Reagan said it best: "Government does not solve problems. Government IS the problem." Thomas Jefferson also had a gem on this subject: “The government that governs least is the government that governs best.” Blaiming the rich is a clever, political tactic that is being used to shift the blame from where it really belongs; on the GOVERNMENT itself.
Tax the Rich to Balance the Budget
By RayAmerica Follow Sat, 14 May 2011, 8:44am 2,245 views 52 comments
Watch (0) Share
Quote
Permalink Like Dislike « First « Previous Viewing Comments 13-52 of 52 Last » See most liked comments
|
RayAmerica is moderator of this thread. |
Follow
Befriend (3)
15 threads
5,644 comments
RayAmerica says
Once again, history proves otherwise. Ray--is it hard to continually make arguments that directly fly in the face of all available historical data? Does it bother you in the slightest?
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
tatupu70 says
You don't believe the "little guy" is hammered when it comes to taxes? Check out the list on this thread and then tell me we are not being victimized by all the taxes we are paying:
http://patrick.net/forum/?p=689255
Follow
Befriend
285 threads
1,760 comments
Ray, can you tell us where the jobs are from Bush's 2001 tax cuts? It's been 10 years and we are still waiting!
Follow
Befriend
35 threads
5,700 comments
Bellingham, WA
What people like you don’t understand is the amount of investment, business activity, etc. you will discourage if you enact punishing capital gains taxes.
We raised taxes in 1990 and 1993. We invented the internet right after, contrary to the Republicans' dire predictions that these tax rises would ruin the economy.
We lowered taxes in 2001 and 2003. We blew up our economy.
We cut taxes more in 2009. Unemployment is still 9%.
What you fail to understand that the primary employment of capital in the US is either foreign investment or naked domestic rent-seeking in real estate, energy, and other forms of specuvesting.
It’s always easy to single out an example that all will love to hate, as in your “hedge fund manager.” Oil companies is another. Yet, while we’re on that subject, who makes more per gallon of gas, oil companies or governments with all their taxes?
The Federal gasoline tax is 18.4c per gallon. Taking 30 gallons per barrel that is $6/bbl federal tax.
$60 per barrel would be enough given supply/demand now, so the oil companies are making around $50/bbl pure profit.
Additionally, your anti-tax jihadi bullshit ignores the fact that we get public goods for much of the taxes we pay to government. I made the list above.
Follow
Befriend (3)
15 threads
5,644 comments
RayAmerica says
So, are you calling hedge fund managers "little guys"?
Follow
Befriend
35 threads
5,700 comments
Bellingham, WA
RayAmerica says
"Victimized?" We've got a $6.1T government to pay for.
Stop with the victimization bullshit. To be intellectually honest we have to find spending cuts, and if we can't cut then we need to raise taxes.
It's really that simple.
Follow
Befriend
285 threads
1,760 comments
Number of workers employed in the private sector in January 2001: 111,634,000
Number of workers employed in the private sector in January 2009: 110,981,000
Net loss of jobs under Bush: 653,000
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
tatupu70 says
Not hardly. You seem offended. Are you a hedge fund manager?
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
Troy says
I've been advocating spending cuts all along. But the fact is, as I stated in the thread, if you double all income tax collections, it isn't enough to balance the budget.
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
HousingWatcher says
Interesting. When Obama releases job figures, does he include jobs in the public sector sucah as Census Jobs, and all other government jobs? If you are going to compare apples, use apples, not oranges.
Follow
Befriend
285 threads
1,760 comments
Spending cuts alone will NOT balance the budget Ray. When I asked you the other day to list spending cuts, you did not come anywhere close to balancing the budget.
Follow
Befriend (3)
15 threads
5,644 comments
RayAmerica says
No. Maybe I misunderstood your post. What did you mean when you said this?
RayAmerica says
Just as a reminder--we were talking about raising capital gains taxes...
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
That's because you were asking for a quick solution when there is none. It took many years to get to where we are now and it will take many years of spending cuts to get us where we need to be.
Follow
Befriend
285 threads
1,760 comments
Under your proposed spending cuts Ray, it would take us countless decades to balance the budget.
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
tatupu70 says
What I meant was the hedge fund manager is the exception, not the rule. Let's take an example of the small investor. Obviously, if you have money saved, leaving it in a money market or CD, etc. isn't making you much in interest. It isn't even keeping up with the rate of inflation. So you are pretty much forced (that is, if you want your money to grow) into other ventures such as the stock market. Let's say the small investor invests $50,000 in a particular stock. He is putting his entire $50,000 at risk. Let's say further that he sells the stock for a $10,000 profit within 11 months of his purchase. He will pay the government $1,500 in capital gains taxes, and yet, if he would have lost the entire investment, he would only be allowed to claim only $3,000 as a loss. Just one example of how the "little guy" gets hammered by capital gains taxes. Many other examples can be cited.
Follow
Befriend (13)
103 threads
3,764 comments
HousingWatcher says
I'll give a lot of credit to someones blog.
I live in LA County, there are some gang areas where I'm afraid to go to. Places where those tattooed thugs walk around like they own the place. Not blind, I'm able to see real problems which president chooses to ignore just to pander to get votes.
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
HousingWatcher says
I read this in a fortune cookie once: "The journey of a thousand miles begins with the first step."
Follow
Befriend
285 threads
1,760 comments
Politifact confirmed the crime rates:
http://www.politifact.com/texas/statements/2011/may/10/silvestre-reyes/silvestre-reyes-says-ohios-most-populous-cities-ha/
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
Housing ... what exactly does Boehner have to do with the crime rate within his district? And what exactly does this have to do with taxing the evil rich?
Follow
Befriend (3)
15 threads
5,644 comments
RayAmerica says
This guys makes 20% return in 11 months and he's getting hammered?
Regardless, capital gains taxes are very low now and that cut was a straight up giveaway to the rich. Most little guys don't invest 50K for the short term.
Follow
Befriend
285 threads
1,760 comments
$50,000 in a single stock Ray? For a small investor? You do know that is a very unlikely scenario. In the REAL WORLD, that small investor would diversify.
And his capital gains would be far less than what he would pay in INCOME tax. I love capital gains tax. I would LOVE to pay it on 100% of my income instead of income tax.
Follow
Befriend
41 threads
907 comments
Ross, CA
To balance the budge we need to cut spending AND raise taxes. I know this pisses off people like the OP, but it is the truth. BOTH need to happen. Also, when we cut spending, we need to keep our priorities straight. We're competing with other countries now, so education and infrastructure are vital. Wars in Afghanistan, Iraq etc., not so much.
Follow
Befriend
285 threads
1,760 comments
We also need to devalue the dollar. Nobody wants to hear that, but it is the truth. Otherwise, you will have 70% tax rates and no govt. services. A devalued dollar will encourage more exports and domestic manufacturing, which will create good paying jobs. A strong dollar kills jobs.
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
HousingWatcher says
"Our policy has been and always will be, as long as at least I’m in this job, that a strong dollar is in our interest as a country,” Treasury Secretary Timothy Geithner said in a forum at the Council on Foreign Relations. “We will never embrace a strategy of trying to weaken our currency to try to gain economic advantage.”
Are you saying the Obama Administration is out to kill jobs?
Follow
Befriend
285 threads
1,760 comments
In some sense yes. Obama has proposed a lot of free market policies that will destroy jobs. Free trade agreements. Amnesty for illegals. More work visas.
Follow
Befriend
35 threads
5,700 comments
Bellingham, WA
"The U.S. needs a weak dollar to spur growth, but it needs to attract foreign investment," she said, "so it needs to pay lip service to the strong dollar policy to reassure foreign investors."
http://www.marketwatch.com/story/us-strong-dollar-policy-is-a-fairy-tale-that-sends-a-message
"strong dollar" is one of those though-terminating cliches that people use.
“A strong dollar represents a strong economy and a strong country,” former Minnesota governor Tim Pawlenty, a leading candidate for the Republican presidential nomination, said in a recent Fox News interview critical of the Obama administration’s dollar policies.
http://www.washingtonpost.com/business/economy/dollar-diplomacy-public-policy-calls-for-strong-currency-but-strategy-may-not/2011/05/03/AFDGya2F_story.html
Follow
Befriend (13)
103 threads
3,764 comments
HousingWatcher says
Devaluing dollar isn't going to create you jobs. Just means everyone will not be able to afford the same stuff they do now. You weaken the dollar, other nations will weaken their currency, or even worse beat us to a world reserve status and we'll be screwed.
Weakening dollar to gain jobs is a 0 sum game, there is no positive effect out of it just more poverty. And what are you going to do when next business cycle busts, more deflation.... until we are a third world country.
I don't think deflating is a sensible idea, it's somewhere along the lines of paying people to dig ditches and paying other groups to cover those ditches back up like they did during the great depression.
Follow
Befriend
35 threads
5,700 comments
Bellingham, WA
ChrisLA says
you really don't understand what devaluation means. The dollar is strong or weak compared to the other major currencies.
Right now the Chinese yuan is about 6X weak as it should be on a purchasing power basis. Combined with a mercantilistic trading strategy this is how they've built up a $3T cashpile thus far.
The only things that can balance this are either trade tariffs or a weaker dollar against the yuan.
In 1985 we devalued the dollar ~50% against the major currencies with the Plaza Accord.
In parallel with this the dollar was inflated 50% too, what $1 could buy in 1982 decreased to 70c by 1990:
http://research.stlouisfed.org/fred2/graph/?g=tU
There was a global oil supply glut and trade with China was miniscule so we got away with it.
or even worse beat us to a world reserve status and we’ll be screwed.
reserve status isn't all it's cracked up to be. You may have noticed that our economy is spinning out of control now, and has been since 1995 or so. If we're so fat and uncompetitive that we need reserve status to save us then we should lose it already since we don't deserve the privilege.
The main problem is we've not been able to face unpleasant facts about our trade imbalances, deficit spending, and debt take-on problems.
We're still an immensely productive people but we let too much go to waste through conspicuous consumption of energy, unchecked rent-seeking at the top in real estate and finance, a horrendously inefficient public health sector (more rent-seeking), and an immense national security and civil security expenditure that is eating away at the fiscal foundation of this entire economy.
Had Bush RAISED taxes to pay for his wars in 2001-2003 (like LBJ tried to do in 1968) we'd not be in half the problem we have now.
Weakening dollar to gain jobs is a 0 sum game, there is no positive effect out of it just more poverty.
Factory work is the lowest it's been since Truman:
http://research.stlouisfed.org/fred2/series/USGOOD
if we want factory work to come back here we need a weaker dollar, against both the Euro and the Yuan. (And just think what that chart would look like if we weren't pumping $900B/yr through the defense sector!)
It is not a zero sum game, though weakening the dollar magnifies the buying power of our trading partners in other areas, eg. they will be able to buy more of our agricultural output for the same amount of their money, which will necessarily reduce the supply of food in our own economy and be inflationary. Plus also the oil problem, a weaker dollar means $10 gas eventually, even aside from Peak Oil issues.
I don't have the answers really and I don't really understand macroeconomics. This is just my imperfect opinion and I'm sure with further study I'd see things wrong with it.
One of the main problems with this sort of discussion is people thinking they more know than they do. "We need a strong dollar!" is a very good example of this. Sounds good, but the ramifications are really bad.
Follow
Befriend (48)
274 threads
12,572 comments
47 male
Lafayette, CA
Premium
All I see is Ray giving reason after reason after reason why the 1990's never happened because the tax code made it all impossible.
Gotta love people who don't read history.
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
iwog says
Just the tax code made it all possible? Nothing else? Thanks for the "history" lesson. It must be great living in such a simple world. In Iwog's world, everything is simple. Example: the government has an enormous national debt. No problem. Just print enough paper money, and POOF .... no more national debt. See? Wasn't that easy?
Follow
Befriend (48)
274 threads
12,572 comments
47 male
Lafayette, CA
Premium
RayAmerica says
You don't get it both ways Ray. You keep saying raising taxes will cause "A".
When someone pointed out that "A" didn't happen at all the last time we raised taxes, you find excuses why "A" didn't apply THAT time, but will apply NEXT TIME.
This is beyond ridiculous and most people understand why.
Follow
Befriend
35 threads
5,700 comments
Bellingham, WA
Of all the solutions, printing $10T of new dollars and handing them out to our present creditors is probably the best solution I can think of. Here's your money back! Have fun!
We probably couldn't sell another bond for a while, but all those dollars would in fact have to come back into our economy one way or another, producing tax revenue to close the deficit.
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
It must be great to be a liberal and think the world operates according to whatever the imagination can conjure up ... and all without consequences. Troy, you should write a letter to Obama and give him your idea. I'm sure in times like these, he could use a good laugh. Of course, you'll have to give a little credit to the Duck.
Follow
Befriend
35 threads
5,700 comments
Bellingham, WA
RayAmerica says
All actions have consequences. I'd like to see taxes raised, and especially the mortgage interest deduction removed. That will certainly tank the housing market and result in every bank with existing home loans on their books to fail.
I'd also like to cut military spending $500B/yr, down to $400B. It is estimated every $100,000 of military spending supports one job -- it should, shouldn't it -- so $500B means FIVE MILLION jobs gone! This country would simply explode in rioting if five million middle-class jobs disappeared overnight like that, and even a long drawn-out pulldown is also recessionary, like what we saw with BRAC back in the 1990s (BRAC was dealing with only ~$10B in cuts, believe it or not).
I've thought through the $10T inflation thing, and I don't see drawbacks as bad as the above.
German-made cars would be more expensive. We'd certainly have $10 gas. Stuff from China would cost twice what it does now. We'd be out of debt as the treasury bonds matured and were cashed out.
I notice you didn't list any actual negative repercussions in your response. I doubt you really have the faculties to understand this stuff, frankly.
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
Troy says
LOL
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
Troy says
This is hilarious. You claim that I'm the one without the "faculties" to understand this problem. OK ... that's your opinion and believe me, I have no problem with that. However, if your above take on the ramifications of your proposal isn't one of the most simplistic observations I've ever read on this site, I don't know what is. It ranks right up there with Iwog's insane "give every American $50,000 and our economic problems are solved, etc."
You claim "German cars would be more expensive." Brilliant. Try EVERY import would skyrocket, including oil (which is traded in U.S. Dollars). Your $10 a gallon gas would be the bargain of the century. Everything that is grown, manufactured and transported using fuel would also skyrocket in price. The cost of all government functions that are dependent upon fuel and manufactured material would also rise dramatically, which would in turn force dramatic increases in taxes. Wages for everyone would have to increase in order to keep up with the inflated cost of living, but in the long run, would not be able to. All pensions, savings, investments, etc. that are denominated in dollars would collapse in value. The scenes of the Weimar Republic would be repeated. Long lines of people wanting to buy ANYTHING before the price went up in the afternoon would cause prices to inflate at an even faster rate. The international investment community would drop their dollar investments immediately, causing further collapse of the currency's value.
As far as your "we'd all be out of debt" ... it's total fantasy. Monetizing the debt on a scale that you suggest is beyond ridiculous. Just as the Weimar Republic wasn't able to pull that one off, we won't be able to either. People like you have zero concept when it comes to understanding how currencies function in the world market. Paper currencies must have the confidence from the world market for it to be accepted and utilized in trade and in investment vehicles. If you don't believe that, look at what has happened to Zimbabwe's currency. Mugabe debased the currency, thinking he could get away with it. The international community refused his currency and Zimbabwe's trade has completely collapsed, along with the rest of Zimbabwe's economy. Entire books have been written on the history of failed fiat currencies due entirely to their debasing of the currency. I suggest you take the time to read up on the subject before you attack someone like me that has taken the time to study the subject.
Follow
Befriend (9)
120 threads
2,591 comments
Burbank, CA
Inflate our way out of this mess? Sure thing:
http://money.cnn.com/2010/03/10/news/economy/inflation_debt/index.htm
and ...
http://georgewashington2.blogspot.com/2010/03/if-we-cant-inflate-our-way-out-of-debt.html
Follow
Befriend
35 threads
5,700 comments
Bellingham, WA
yeah, I finally got an intelligent response out of Ray. What do I win?
Follow
Befriend
285 threads
1,760 comments
"I notice you didn’t list any actual negative repercussions in your response."
Did you not read your own post? You just listed one of them: $10 a gallon on gas. What do you think expensive gas does to the cost of food?
Follow
Befriend
35 threads
5,700 comments
Bellingham, WA
The one difference between monetizing the debt as it comes due and Weimar/Zimbabwe is that the latter were basic price/wage spirals -- the printed money was injected directly into wage-earners, who demand more and more printed money.
Here & now, things are different. It's the rich who have too much money. They have so much money they went and bought $10T of treasury debt since they didn't have anything else better to do with their money. Giving the $10T back to the world's wealthy will not necessarily greatly inflate wages or the cost of living of J6P.
Try EVERY import would skyrocket, including oil (which is traded in U.S. Dollars).
This would work as a tariff on oil imports, yes. Something we need to do, since our trade imbalance in oil is so great, two-thirds of the $50B trade imbalance as of March. $10 gas would reduce domestic waste and since we are the dominant consumer of world output this would result in more supply and be a countervailing effect to some extent.
Everything that is grown, manufactured and transported using fuel would also skyrocket in price.
Ag is 2% of GDP. Fuel costs are not the dominant line item of any industry, not even NASCAR.
Prices going up is neither here nor there if wages don't go up with them. Higher prices in one area will result in cutbacks in other.
I don't mean to say this wouldn't be disruptive, but the point is that EVERY solution we face is also disruptive. Just raising taxes back to Clinton levels on everyone would also have immense shocks we'd have to live through, and that only solves about 25% of the deficit problem.