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Politics

I haven't made a political post in a long, long time.

I'd make one now, except just thinking about it depresses me. I was not happy about the results of the midterm, needless to say... and I am even less happy, if possible, about this "compromise" that Obama has made with the GOP on taxes. From where I sit, it smells more like capitulation than compromise. Give a lot, get almost nothing.

Obama is the most intelligent president we've had since Jimmy Carter... and, sad to say, he is looking more and more like Jimmy every day. A good man, but not a good leader. At least not so far. He doesn't seem to have the stomach for a fight. We need another FDR, another JFK, another LBJ. NOT Jimmy II. (And, yes, I know, Obama has accomplished some important stuff. But so did Jimmy. Camp David accords, remember?)

Yeats was writing about his own time in "The Second Coming," I know, but sometimes I think he was prescient:

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

And could that rough beast whose hour has come round at least be... Sarah Palin?

No, please. Tell me that's just a bad dream. Somebody wake me up.

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Comments

dalimar2
Dec. 15th, 2010 11:49 pm (UTC)
Actually
The compromise was the smartest thing Obama has done since he was in office.

There is a fixed amount of money out there, if you're in favor of higher taxes you inherently must believe that that money would do more good in the hands of the government rather than in the hands of private individuals and businesses. If you really believe government spends money efficiently I have a $10,000 toilet seat to show you. Even if you believe Obama's own math his stimulus bill spent hundreds of thousands of dollars PER job it created or saved. That is if you believe his math.

Furthermore, when these tax cuts were first enacted the federal government actually had an INCREASE in tax receipts, they made more money, despite lower rates, because the lower tax rates spurred economic growth.

The 700 billion cost of this package, as such, is static accounting. It assumes that the money will go out and be stuffed under a mattress and not used in the economy. We know that won't happen, and in the end these extensions (don't call them cuts, they're not) will probably pay for themselves through higher economic growth.

If you don't want to help out millionaires and billionaires, well. I die a little inside everytime Obama says that. My taxes would have gone up, I am not a millionaire. I have a 10 year old chevy, and my wife drives a 5 year old saturn. Our house is 2200 square feet. We do have both HBO and Showtime, and an HD TV, are we that luxurious? That kind of talk, "billionaires and millionaires" is pure hyperbole.

The fact is, the top 5% of earners in this country pay 80% of the federal tax burden. So, if that isn't "fair" enough for you, what is the fair share? 100%?

The bottom 40% of people pay 0 net income taxes. Did you know that? I worry about what happens if that gets to 50%, what if 50% of people in a country do not pay to support the government? (yes, they would still pay sales and property taxes to support local and state governments). If you pay no money to support the federal budget, why would you bother electing a politician who controls spending? I worry about that trend.

If you just don't like the inequalities that our meritocracy has produced, you can't tax the rich into pauperhood or somehow help the poor by harassing business owners. The metaphor would be beating someone with a stick while screaming "Hire someone, expand your business, buy equipment." You can't force equality in our system of government or in a free economy. If you want forced equality, it exists in some pretty bad places I'm sure you're glad you don't live in.



One thing not mentioned often is the dividend and capital gains tax rates. Had a deal not been reached it would have literally crashed the stock market, which affects everyone with a pension, a retirement account, as well as most nonprofit foundations, school endowments, etc. The image of a stock market investor as only the rich is old fashioned.

If the taxes would have been allowed to rise everyone who had a gain in a stock or any other asset would basically get a 10% bonus for selling it in the next couple weeks. All that selling pressure would have tanked things pretty hard.

Additionally, you know in your heart of hearts that when you tax something you get less of it. Thats why liberals like gas taxes and carbon taxes and fatty food taxes even now. So what happens when you tax investment? You get less of it.

Do we really want less investment in our economy? Will that create jobs?

IMO the only bad thing is the unemployment benefit extension. 3 years is not a temporary measure. It is welfare masquerading as a job program, the system is abused and gamed every day. Even Paul Krugman, the nobel prize winning economist (and liberal) of the New York Times has written that such long unemployment benefits create a disincentive for people to find work.

Sorry I wrote a book, I'm tired of my non-millionaire self being demagoged for thinking lower taxes will boost the economy (note, even Obama says they will).

I will agree with you on one thing. Sarah Palin is poison, I hope she sticks to TV and stays out of washington.
malegrim
Dec. 16th, 2010 12:28 am (UTC)
Re: Actually
"Furthermore, when these tax cuts were first enacted the federal government actually had an INCREASE in tax receipts, they made more money, despite lower rates, because the lower tax rates spurred economic growth."

In what bizarre reality are you living? The cuts may have spurred a small amount of growth, but they were still a massive net negative on the budget--they're the main reason the Clinton-era surplus turned into the huge deficits of the Bush years, even before the economy imploded.
dalimar2
Dec. 16th, 2010 01:40 am (UTC)
Re: Actually
I live in reality.

Clinton surpluses (and really? Why are they called "Clinton" surpluses? Why not "Secular Growth in Computers and Technology Driven Production surpluses") turned into deficits because of:

A. Dotcom recession (yes, Bush took over with a recession too)

B. 9/11 recession (not anyone's fault, unless you are a truther)

C. Bush spending on Medicare Part D and 2 Wars.

If you don't believe me, ask the government.

http://www.cbo.gov/budget/data/historical.pdf

2003, the year in which the tax cuts were created, had federal revenues of 1.782 trillion. 2004 had revenues of 1.880 trillion, and they kept going up.

Surely if you're right and I'm wrong the government would have made LESS money after cutting taxes?

Let us also not forget that we were in a recession at the time, and the cuts spurred us out of it.

Even Obama admits that this is good for economic growth.
malegrim
Dec. 16th, 2010 10:06 am (UTC)
Re: Actually
So, everything good is due to the tax cuts and everything bad is due to (something else), huh? Funny how that works.

I agree that the state of the economy has a big effect on government tax revenue. But you can't have it both ways. If the tax cuts were the only important factor, then the drop in revenue from 2001 to 2002 (look at your own data) shows that they cost more money than they generated via stimulus. On the other hand, if you admit that other factors than just the tax cuts have an impact on the state of the economy and the revenue picture, then you can't claim to know everything just by looking at the revenue chart.

Research done by the Congressional Budget Office makes it quite clear that the Bush tax cuts cost the government money: http://www.cbpp.org/cms/?fa=view&id=966

Tax cuts do provide economic stimulus, but every economist who doesn't work for a right-wing think tank agrees that it's a weak stimulus compared to direct spending--you get a lot less economic bang for your government buck. More importantly, STIMULUS IS FOR FIGHTING RECESSIONS. When the recession ends, so should the stimulus. I'd be a lot more sanguine about the present round of cuts if I didn't know damn well that Republicans will try to make them permanent again two years from now.
Re: Actually - dalimar2 - Dec. 16th, 2010 08:41 pm (UTC) - Expand
Re: Actually - malegrim - Dec. 16th, 2010 09:15 pm (UTC) - Expand
lordbrand
Dec. 16th, 2010 03:08 am (UTC)
Re: Actually
the Clinton-era surplus may have had just a *bit* to do with the Internet bubble...

But agree that the Bush tax rates did not self-fund through created growth - but hard to tell against the train wreck the economy was becoming in 2001 and then recently. Perhaps it would have been worse without them. No idea. Haven't seen many economists claiming they could tell either.
m0beus
Dec. 16th, 2010 02:23 am (UTC)
Re: Actually
In my opinion, there is a great deal of intellectual dishonesty in this rant:

I have yet to see any credible source that states that revenues increased due to the Bush Tax Cuts. If you have such a source, I suggest you link it. As far as I can tell, we went from a balanced budget under Clinton to a record deficit in Bush's first year. Not all Bush's fault -bubble burst, 9/11- but revenues did not increase.

Bush did not impose, ask for, or suggest, a special tax when his country went to war. He is, to my knowledge, the only president who did not increase taxes when his country embarked on a long-term large-scale military campaign. This fact is consistently ignored by people who claim low taxes as a birthright. (the fact that Obama has been similarly spineless has not impressed me, though he is at least trying to draw down our committments)

The bottom 40% pay taxes into Social Security and Medcaid. These taxes are withdrawn only from the first 106K or so of income, so all of those bottom 40% pay it on their entire income, while high rollers pay it on a fraction. Do you realize that a person earning $2M per year pays NO SS tax on 95% of his income, while a person working 2 jobs for $50K gets taxed all ALL of his?

Corporations refusing to hire/loan so others can hire are currently sitting on tremendous cash hoards given them by the Government's grace. Washinton could have let the banks fall, and the bankers join the unemployed you callously dismiss (would that change your thinking I wonder?). In my opinion government has a right to demand that the money it gave away be used to help its citizens.

Extraordinary times call for extraordinary measures. This is an economic disaster, and extended unemployment in light of the greatest financial meltdown in 80 years does not seem like overkill.

Tax cuts may well boost the economy in the short term. You know what hurts the economy in the long term? Government insolvency. You will no doubt say spending should be cut. Well, I can tell you that we can cut 100% of discretionary spending and not erase the defecit long-term. So please tell me, in light of no tax increases what gets slashed: Social Security, Medicare, or National Defense?
blackrevenant
Dec. 16th, 2010 04:37 pm (UTC)
Re: Actually
So far as what gets cut, I would say that we should start with programs that aren't provided for in the Constitution. Of the three you mentioned, Social Security and Medicare would be the ones to go.

Of course, defense spending should be cut as well, but at least the Constitution provides for the use of taxpayer money for national defense.
m0beus
Dec. 16th, 2010 07:43 pm (UTC)
Re: Actually
I never quite got this line of argument. The Sixteenth Amendment lets Congress tax income from whatever source derived, so the tax side of SS seems fine. And Article I, Sec. 8 Clause 1 of the Constitution allows Congress to "provide for the common defense AND general welfare of the United States."

It seems like social safety nets designed to help desperately sick Americans, or impoverished elderly, do promote the general welfare of the United States. Or at least, it's a close enougth call to be left to Congress' judgment.

If you want to go with the "wait, they didn't really mean that" route, then you're in the interpretation game, and there are 70 years of Supreme Court cases saying that Social Security is a legitimate use of authority under the Commerce Clause. Medicaid, meanwhile, is done under the spending clause, in partnership with the states. A state is free to opt out, if it wants to, as far as I know. I don't think any have.
Re: Actually - blackrevenant - Dec. 16th, 2010 09:16 pm (UTC) - Expand
m0beus
Dec. 16th, 2010 02:34 am (UTC)
Re: Actually
And by the way: While I don't know why a household with annual income in exess of $250K per year wouldn't have a car more recent than 5 years old, I do do believe such a household would not be ruined by returning taxes to their Clinton-era levels.

Even with the surplus in people's minds, they STILL couldn't get the votes to make these tax cuts permanent in 2001. That's why they had to but it in as a budget measure with sunsets.
m0beus
Dec. 16th, 2010 04:10 am (UTC)
Re: Actually
And, while this may be overkill, to respond to another point: Congress acted, and thereby made taxes lower in 2011 than they would have been without its action. I will go ahead and call that a tax cut, thank you very much. The opposite of your point is true: If the low tax rates had been allowed to lapse on schedule, Congress would merely have adhered to the plan of taxation the 2001 Congress implemented.

Granted, they only implimented the sunsetting provisions because they didn't have the votes to get permanent ones. So what? A law's a law.
dalimar2
Dec. 16th, 2010 02:11 pm (UTC)
Re: Actually
Okay mobeus, no intellectual dishonesty here, here is your link:

http://www.cbo.gov/budget/data/historical.pdf

Bush cut taxes in 2003 in which the federal government had revenue of 1.782 trillion

In 2004, after the cuts, the feds had revenue of 1.88 trillion. Significantly lower tax rates, yet more revenue. Is this a credible source for you?

Remember, Bush did not cut taxes his first year. Some people think he did, he didn't.

http://en.wikipedia.org/wiki/Jobs_and_Growth_Tax_Relief_Reconciliation_Act_of_2003

That is the bill known as the "Bush Tax Cuts"

In 2001 Bush tried a stimulus, like Obama did in 2009, that gave a tax rebate advance to people making certain incomes among other things, it failed to help the economy, like Obama's in 2009. Don't confuse that law, with the tax act of 2003. It is ironic how similar the two presidents ended up being on this isn't it? Both tried a stimulus program first.

You can argue all day what "Woulda coulda shoulda" been if Bush hadn't cut taxes, and say we would have made more money anyways or something, tax cuts had nothing to do with it, except you'd be disagreeing with every economist on the planet that says more money in the economy increases economic growth, and, you STILL wouldn't be helping your point that Bush's cuts added to the deficit, because they didn't.

I think sometimes if these were the Gore Cuts of 2003 and otherwise exactly the same there wouldn't be such animosity. I think hatred of George Bush carries over to everything he touched. I'm sure his increase in aid to Africa would likely also be lamblasted somehow.

You are right Mobeus that everyone who works pays FICA taxes, however that does not dispute my point that the bottom 40% pays no income tax and does not support the federal government. Entitlement programs are outside of the regular budget. Social Security isn't really a tax, it is a forced retirement savings program. The reason it is capped at a certain income is that it is capped in benefits as well. That is the way FDR designed it. Medicare taxes, by the way, is uncapped.

You are right, a person who makes 2 million in regular income will not pay SS on 95% of it. But he will pay over $800,000 in taxes, so don't act like he isn't paying "his fair share."

Additionally consider the small business owner mobeus. Who has to pay both the employee and employer's share of FICA. Thus doubling the tax rate to about 15%, or just consider the income limit doubled. So a small business owner who makes $250k a year actually is going to pay SS FICA taxes on $212k of income, and medicare on potentially all of it, twice. Ouch. And he ends up in the highest tax bracket, and most deductions (child, studen loan interest, etc) phase out for him too. Making his effective rate pretty high.

I'm sure if the tax law was written for the $2 million a year people you mention it would have far less opposition, too bad it isn't.

You said "Corporations refusing to hire/loan so others can hire are currently sitting on tremendous cash hoards given them by the Government's grace" which I find offensive. Money a business or individual earns is only theirs by government grace? That explains your attitude as a tax raised. All money earned in the US is the property of the government, and letting the person who earned it keep more of it is government spending that must be justified, and if that entity is "rich" or a business it is a gift or a giveaway. I hold the position that what I earn is mine, and anything I give to the government is a giveaway. Not the other way around.

dalimar2
Dec. 16th, 2010 02:11 pm (UTC)
Re: Actually
Well, I can tell you that we can cut 100% of discretionary spending and not erase the defecit long-term. So please tell me, in light of no tax increases what gets slashed: Social Security, Medicare, or National Defense?

All three mobeus. SS needs the age increased, and it needs to be means tested. It is kinda a bad incentive to do so (it would punish people who are responsible and save for retirement on their own) but it should be done. I also think a portion should be privatized, and by that I mean put into an account with your name on it which the government can never take money from. Defense spending needs to be cut, especially nation building spending. I'm not so much for cutting spending on advanced weaponry, because that provides a lot of jobs, a lot of offshoot benefits (the Internet, etc) and as such kills multiple birds with 1 stone. Medicare and the whole healthcare system needs common sense market based reforms that will slow the rate of medical inflation. (Obamacare does not do this).
dalimar2
Dec. 16th, 2010 03:39 pm (UTC)
Re: Actually
oh and mobeus the reason why businesses are sitting on cash is because of uncertainty created by Obama's policies. You can't foster an antibusiness environment and spew angry antibusiness rhetoric from the pulpit and expect businesses not to react defensively.

Imagine you're a business owner. You don't know what you will pay in taxes next year, you don't know what your employee healthcare costs will be. You don't know what your financial reporting requirements will be. If you are in an industry at all related to fossil fuels or that uses more than a small amount of energy, you don't know what those costs will be. Meanwhile the economy looks shakey still, because Obama's policies have failed thus far to make a significant impact on the unemployment rate.

Why would you spend any money expanding or hiring someone new? Especially when many expansions can be multi-year efforts. Businesses need certainty. Plus, with the economy being anemic, a business who doesn't want to end up in bankruptcy will save up, like ants or Starks when winter is coming.

I bet you Obama moves to the middle and starting with this compromise and the South Korea trade agreement continues with more progrowth probusiness policies and we will finally start seeing the economy come back strong, then businesses will start spending. You heard it here first.
Re: Actually - m0beus - Dec. 16th, 2010 08:50 pm (UTC) - Expand
Re: Actually - dalimar2 - Dec. 16th, 2010 10:18 pm (UTC) - Expand
Re: Actually - m0beus - Dec. 17th, 2010 12:08 am (UTC) - Expand
rharris528
Dec. 16th, 2010 04:32 pm (UTC)
Re: Actually
Couple of points to mention here, yes the top 5% of earners pay the vast majority of the federal tax burden, but what you are failing to note is that the top 5% are controlling the vast majority of the income.
You also claim tat tax revenues have gone up since the Bush tax cuts, which is true, but misleading. The tax cuts occurred after the recession had already began, so when you compare those numbers to later years, you do see an increase in revenue. However, to really look at a revenue comparison, you should look at the per capita federal revenue from the clinton era (this is the tax system that would be re-instated by ending the Bush tax cuts). We made much more then, and the top earners were just fine with the way things were.
Next, you make a point for me with your own demographics. Cutting the taxes for the rich is supposed to create a trickle down effect that allows for for spending in the economy. Credit/loans makes the economy work by multiplying the dollar spent. You are obviously in the upper tax brackets, but you say that you drive an old car and don't spend a lot on things you don't need. That's probably one reason you are well-off, kudos. But that is the problem, if the extra money given to you is not put to use, YOU are the only one benefiting, and teh benefit is negligible. We need to think in terms of the whole if we are to get out of this recession.
The rich have benefited the most from the system, I feel that they should pay back in to help the country.
Finally, here's the idea behind economic growth: the GDP should gradually and steadily climb. GDP= C (consumer spending) + I (investment) + G (government spending) + NI (imports/exports). Republicans don't want the government spending, but if consumer spending is in decline, the growth has to come from somewhere. As for you point on investment, countries around the world would still prefer to invest in our economy than in others, even considering the recent economic slump. Domestic investors aren't stupid, they'll do the same. So we are back to an attempt in raising consumer spending, but as I previously pointed out, if you want someone to buy something, give the money to someone who needs to buy something,not the people who can choose to save the money or maybe spend it. That's the idea behind a progressive tax, take the money from those who have benefited the most and who won't be spending, and re-distribute the wealth to those who need to SPEND NOW.
dalimar2
Dec. 16th, 2010 08:36 pm (UTC)
Re: Actually
You also claim tat tax revenues have gone up since the Bush tax cuts, which is true, but misleading. The tax cuts occurred after the recession had already began, so when you compare those numbers to later years, you do see an increase in revenue. However, to really look at a revenue comparison, you should look at the per capita federal revenue from the clinton era (this is the tax system that would be re-instated by ending the Bush tax cuts). We made much more then, and the top earners were just fine with the way things were.

I'm not sure I follow your line of thought here. Yes, Bush did not cut taxes prior to the recession starting, he could not see the future so did not try to preemptively stimulate the economy. This is relevant how?

And why is it you attribute economic growth during the mid-late 90s to slightly higher tax rates? Surely our growth was from the explosion of the computer industry and technology attributed gains in productivity? Saying "Taxes were higher then, the economy was good then, therefor higher taxes cause a good economy" is a cum hoc fallacy.

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

Maybe our economy grew in spite of, not because of, higher taxes?

Next, you make a point for me with your own demographics. Cutting the taxes for the rich is supposed to create a trickle down effect that allows for for spending in the economy. Credit/loans makes the economy work by multiplying the dollar spent. You are obviously in the upper tax brackets, but you say that you drive an old car and don't spend a lot on things you don't need. That's probably one reason you are well-off, kudos. But that is the problem, if the extra money given to you is not put to use, YOU are the only one benefiting, and teh benefit is negligible. We need to think in terms of the whole if we are to get out of this recession.

I never said I don't spend money, I said I wasn't a millionaire and I have a 5 year old car. I invest and save a lot, not saving by stuffing it into the mattress, but saving by investing in businesses. Which allows businesses to grow, to hire people, and to create jobs. That is a positive in the economy.

When was the last time a poor person hired you? You can't put the entire federal tax burden on small business owners, successful entrepreneurs, and high end professionals. (80% of the burner is currently on the top 5%, again).

If you give money to poorer people they will go and spend it on groceries or something made in China from Walmart. If you give money to small business owners they will spend money by reinvesting in their business, growing the economy, and creating jobs.

Furthermore, you're punishing success. Successful people did not get that way by luck. In a way you're making a bet, do you want to bet on the horse who has already won races, or the one who has been coming in last? That may sound cold but the fact is someone who has experience starting and running successful businesses is probably more likely to be able to grow or start a new business with additional funds. Then you get more jobs.

I guess the argument hinges upon what you see the goal of tax policy to be.

Should the goal of tax policy be to encourage equality? Or should it be to encourage economic growth? I think economic growth is the goal that will help people the most, many other nations have tried to redistribute wealth to create equality, and they fell apart.

Do you realize our tax code is now such a mess than the marginal rate on incremental income in some cases exceeds 100%? So if you made a certain amount, say 75,000, and got a raise making 85,000, the tax increase from that raise would exceed $10,000, meaning you're better off rejecting the raise.

You say the rich have benefited the most, I say the rich have provided the most benefit. People who have started businesses, created job, developed inventions, people who live responsibly, within their means, and save, people who invest in other businesses to help them grow (aka venture capitalists). Where would our country be without these people?

As opposed to people who are on the government dole most of their lives?

Who is John Galt?
Re: Actually - sevgiinsani - Dec. 17th, 2010 07:22 pm (UTC) - Expand

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