Obama on the debt limit

[Stephen Eisel]

Sadly, like everything from the left wing or the right wing, it's just rhetoric.

The government can't control their spending because we continously elect either 1) incompitent representatives 2) representatives who easily cave to special interests 3) representatives who mean well but don't have the economic background to make good decisions.

Sadly, I must admit that I agree with you on these 3 points..

[Dustin James]

Rich people aren't evil. And they are far from being squeezed dry.

You are right, taxes alone won't do it. But spending cuts alone won't do it either. You need a combination.

Thanks for the thoughtful post Thealexa:

I stand corrected, it's not 50% don't pay tax, it's 46%. This URL has some good info on who is taxed.http://www.taxpolicycenter.org/publications/url.cfm?ID=1001547

As for the rich, there are many definitions but let's just say millionaires. President Obama has previously characterized people who earn $250,000 or more as "rich," but that would include vast numbers of individuals who run small businesses using their personal accounts, making them look "rich" on paper, but they actually have payrolls to make.

So you have said it can't get done with just cutting spending, that it has to be both taxes and cutting. However the choice is taxing the base of people with jobs now (after millions of jobs have evaporated in the last few years) instead of increasing the jobs and leaving the taxes alone. More jobs, automatically means more tax revenues, but is almost never stated that way because it's too logical. And of course the other choice is to stop the run away spending and worse - wasteful spending.

Rich People:
The Internal Revenue Service found 8,274 people that are defined as rich: having incomes of $10 million per year or more (they should give me some because I don't have it and they do) These millionaires made a combined total income of $240 Billion in 2009. That's it - that's all of it.

So with all this combined earnings, even if the government confiscated 100% of all their money ($240 billion) it doesn't come anywhere close to covering the deficit of $1.5 trillion. We would barely have enough money to cover government spending for 24 days (currently about $10 billion a day)

Another 227,000 people earned $1 million or more in 2009.  These Millionaires averaged taxes of 24.4% of their income -- up from 23.1% in 2008." The reduced rate would be the Bush tax cuts. Obama's tax increases hadn't started yet. 

So as you say the rhetoric is flying and the old class warfare of rich vs poor, have's-and-have-not's gets thrust out there, but these numbers prove it's BS - and this president, with all his academic credentials, knows it's BS. It SOUNDS good to the working class or down-trodden, but with most people making under $50k paying little or no taxes, it's a total diversion from the real issue - which is where are all those jobs Mr. President that you were "laser focused" on in 2009? Is it still Bush's fault now? Taxing the rich will do almost nothing to bring down this deficit - it will simply pull money out of the private sector and put it into the government.

The real issue is policy. This administration has no understanding of job creation. It is pro-government and anti-business, proven by it's actions or lack of them. It talks about construction jobs, why? because they are easy to talk about. The problem with construction projects is that they end when the job is finished, unlike manufacturing, energy and other ongoing work. Big Businesses have lot's of cash, but they are afraid to commit with policies and public confidence worn down by this administration.

Another source, albeit a conservative think tank where the number speak for themselves: http://www.heritage.org/research/reports/2010/06/federal-spending-by-the-numbers-2010

If nothing else there are some sobering economic facts for independent assessment.

[Will Brown]

I certainly agree that most of this is rhetoric, calculated to inflame the masses to reelect the politicians.

First, there has always been economic disparity; no society, other than some remote tribes, has ever succeeded in eliminating this. In those that have tried the hardest (the USSR, for example) the nominal equality has been a sham; the political elite have always retained their limos and their dachas; at the same time, the workers have become less industrious, and the society eventually falls. One of the best aspects of our country has been that some people, usually by hard work and intelligence, have been able to move from modest beginnings into the wealthy class. That is a powerful incentive that we are losing as more and more of us are looking to the government to take care of us. I don't think is is a coincidence that as we have moved more and more toward government support. the gap between rich and poor has widened. Opportunity is still there, but we have a growing underclass that has no incentive.

It is a misnomer to say tax the rich; since we eliminated the estate tax, there has been no tax on being rich, per se. A person with a hundred million dollars doesn't really need to invest it. He can stuff it in his mattress and pull out a little when he needs to buy something. Since he would have no income, he would pay no tax. I could live for quite a few years with no income in that situation.

So what they are really yelling about is taxing high income earners. That isn't always as fair as it seems. A physician would almost certainly be a high income earner, but they are often saddled with a mountain of debt incurred in becoming a physician, and I don't think that debt is deductible. High income earners with a lot of discretionary income almost always invest it. If we levy what they feel is an unfair tax burden, they can invest in munis, avoiding taxation on their returns. If they do this, there is less money available for the free market economy, and fewer jobs at the very time we need more jobs. Or they can relocate their talents to a less taxing place.

Certainly the tax code could be improved, but many of the improvements could end up harming more than those with high income. The deduction for mortgage interest, for example, encouraged people to overpay for homes and take out second and third mortgages; then we were so surprised when the bubble burst. Too many parts of the code were passed not to raise taxes, or even to be fairer, but to encourage certain behaviour. That should be cleaned up. A simpler tax code would save taxpayers millions of dollars that now go to marginally qualified tax preparers. But just raising taxes when our economy is so frail doesn't appear to be a responsible act.

[Stephen Eisel]

http://www.jewishworldreview.com/cols/will102899.asp

According to a study done for the Joint Economic Committee, the tax destroyed 330 jobs in jewelry manufacturing, 1,470 in the aircraft industry and 7,600 in the boating industry. The job losses cost the government a total of $24.2 million in unemployment benefits and lost income tax revenues. So the net effect of the taxes was a loss of $7.6 million in fiscal 1991, which means the government projection was off by $38.6 million.

It has been calculated that if the federal government imposed--in the name of fairness, of course--a 100 percent tax on all the earnings, from the first penny, of all millionaires, which is to say if the government confiscated all their earnings, the sum would suffice to run the government for just six weeks. The problem with that calculation is that it reflects "static analysis." That is, it does not allow for behavioral changes the tax would provoke: No one would earn the one-millionth dollar, thereby triggering the confiscation, so the revenue yield from the 100 percent rate on millionaires would be zero.

But back to reality. "Practical politics," Henry Adams famously said, "consists in ignoring facts." But facts are famously stubborn things, particularly when they involve unpleasantness for one's constituents. In 1993 Congress repealed the excise taxes on boats, aircraft, jewelry and furs. It also indexed, phased down and scheduled the expiration of the tax on cars.

Now comes Kennedy with "The Boat Building Investment Act," which he calls "exactly the opposite of a luxury tax." Indeed it is.

Its centerpiece is a 20 percent tax credit for purchasers of American-made luxury yachts more than 50 feet long. So the purchaser of a $1 million yacht would get a $200,000 credit against his federal income taxes.

However, this would not be an unlimited benefit for the upper crust. The credit would be capped at $2 million, so the government would help only with the first $10 million that a purchaser spends on a yacht.

[Ellen Cormier]

Will brown can you please site statistics where more and more people are turning to the government for assistance? Do you know how hard it is to get cash assistance and the hoops you have to jump through to keep it? the number of cash assistance or tanf recipients is 33% of what it was in 1996. 12.3 million versus 4.3 million despite the unemployment rate nearly double what it was in 1996. Probably about 2/3s of those recipients are children.

I'd love to see an upper middle class person who looses their job go and try to get a lousy 500$ a month in exchange for 30 hours a week volunteering or receiving "job training"/reeducation/slave labor and then have to take a bus an hour each way to get there.

Quit blaming the poor for asinine business practices by gigantic corporations.

[Roy Pitchford]

http://money.cnn.com/2011/08/04/pf/food_stamps_record_high/index.htm?iid=HP_River
Food stamp use rises to record 45.8 million

http://www.usatoday.com/news/nation/2011-04-26-government-payments-economy-medicare.htm
Americans depend more on federal aid than ever

[Ellen Cormier]

Roy,

Unemployment is close to 10% with many many more underemployed.

Most food stamp recipients are children with at least one parent working.

Can you imagine the foreclosure crisis if unemployed families were not able to get food stamps?

Or the collapse that would happen if that money was suddenly taken out of the economy?

The economy nets about $1.75 for every dollar spent on food stamps.

You can't take away food stamps without addressing their impact as a source of corporate welfare.

[Stephen Eisel]

No, because that would screw up my GPA, which is quite lovely right now.

This is a pretty bad analogy since professors teach you the material and then grade it. I never remember getting lessons from the government about how to make money.

Thought that you may enjoy this article

http://www.foxnews.com/us/2011/08/17/co ... ort-grade/

Oliver Darcy, a recent college graduate, proposes that students with good grades contribute their GPA to their academically sluggish friends. He argues that this is how the federal government takes wealth from the country’s high wage earners and distributes it to the low income earners.

“They all earn their GPA,” said Darcy in an interview with "Fox and Friends." “So we asked them if they’d be interested in redistributing the GPA points that they earned to students who may be having trouble getting a high GPA.”

Darcy, who films his encounters with teachers and fellow students, doesn’t have much luck selling this theory.

[Thealexa Becker]

Your GPA comparison is not a good one. Why? Because I would NEVER share my grades with anyone, but if I made millions of dollars, I would not mind paying a higher marginal tax rate.

"Oh but Thealexa, that's a contradiction!"

No it isn't. Grades are an artificial creation specifically for the academic system in order to rank your capabilities as a student so that you can advance to higher levels of education. They are reflective of your performance in a class, but not all grades mean the same thing. An A+ in English 101 means nothing compared to and A+ in Differential Geometry. Grades are subjective and fickle sometimes depending on your professors. You can even elect to take a class and not get a grade, just for enrichment. Sometimes there are even classes where everyone gets a great grade.

To get slightly mathematical on this issue, you have not proved that your comparison is correct. I can provide counter examples to your suggestion, meaning that although it seems like a really novel and incindiary way of presenting this issue so that more people will agree with you, it isn't always the case.

Maybe some narrowminded people want to see GPA's as equivalent to taxes. But I bet that Warren Buffett would agree with me.

By the way, that man went to the Wharton School of Business and you can bet your life savings that he cared about grades, and now he advocating for higher tax rates. Explain that one. Or how about this, get a better comparison.

Or, talk about the issue at hand. And the fact that while the rich keep getting richer, there are 1 in 4 children in America that go hungry. That's third world country level of embarrassing.

I challenge all of the people who are either very wealthy or who (as people on the deck here seem to) have a moralistic objection to higher taxes to find a solution to this issue of the working poor living these unbearably sad lives. Right now, the only solutions are food stamps, changing tax policies, or welfare programs.

If you have better ideas that aren't just "work harder" then I would love to hear them.

[Stephen Eisel]

Or, talk about the issue at hand. And the fact that while the rich keep getting richer, there are 1 in 4 children in America that go hungry. That's third world country level of embarrassing.

So taxing the rich is going to stop children from going hungry? or not "taxing the rich enough" has caused 1 in 4 children to go hungry? How about not creating children that we cannot feed. How about taking responsibility for ones own actions? or just getting to the root of the problem of why 1 in 4 children are going hungry.. Taxing the rich and creating more dependency on the government is not going to solve our problems. The rich getting richer saying is nothing more than a classism mantra.


http://www.forbes.com/forbes/2011/0808/ ... icher.html

A study from Capgemini and Bank of America Merrill Lynch showed that the world's population of high-networth individuals (HNWI), with $1 million or more in investable assets, jumped 8.3% over the last year to a total of 10.9 million people. That number is up from the 2007 tally of 10.1 million tycoons.

Not only are there more rich, but they're also richer. Their financial wealth jumped 9.7% over the last year to $42.7 trillion. Meanwhile, the U.S. GDP grew 1.9% in the first quarter of 2011, according to the U.S. Department of Commerce.

[Stephen Eisel]

Your GPA comparison is not a good one. Why? Because I would NEVER share my grades with anyone, but if I made millions of dollars, I would not mind paying a higher marginal tax rate.

Now that is a funny statement

[Stephen Eisel]

But I bet that Warren Buffett would agree with me.

And how many times has Warren Buffet sent a check to the US Treasury Department, adjusting for a voluntarily higher tax rate? just asking

[Roy Pitchford]

Or, talk about the issue at hand. And the fact that while the rich keep getting richer, there are 1 in 4 children in America that go hungry. That's third world country level of embarrassing.

So taxing the rich is going to stop children from going hungry? or not "taxing the rich enough" has caused 1 in 4 children to go hungry? How about not creating children that we cannot feed. How about taking responsibility for ones own actions? or just getting to the root of the problem of why 1 in 4 children are going hungry.. Taxing the rich and creating more dependency on the government is not going to solve our problems. The rich getting richer saying is nothing more than a classism mantra.

We were told four years ago that 17 million people went to bed hungry each night. Well, that was probably true. They were all on a diet.

What is the childhood obesity level in the United States? Hmm, strangely enough, its about 1 in 5.

By the way, a tangentially associated issue: What about global wealth and global hunger? You want that money redistributed?? I'll tell you a little secret. If the world's poor decide to go after the world's rich (and I think the UN has talked about it) the shoe will be on the other foot.
http://www.globalrichlist.com/
If you make $48,000 per year, congratulations, you're in the global wealthiest 1%. I'm in the wealthiest 4%.

Your GPA comparison is not a good one. Why? Because I would NEVER share my grades with anyone, but if I made millions of dollars, I would not mind paying a higher marginal tax rate.

Sounds to me like you consider yourself morally superior because, those other people are so greedy and you're not.

...we find that proportionate tax is best described in our Bible. Both the old and new testament describe tithing as the economic basis of our Judaic and Christian religions. We are told that we give the Lord a tenth and we are told that if the Lord prospers us ten times as much, we give ten times as much. But when you start computing Caesar's share under our present tax system you'll find that the man of average income, if he has prospered ten times as much, his personal income tax goes up 53 times as much. And does it really help the little man?

By the way, that man went to the Wharton School of Business and you can bet your life savings that he cared about grades, and now he advocating for higher tax rates. Explain that one. Or how about this, get a better comparison.

Easy. Buffett has made his money. He lives entirely off his dividends, which are taxed at an altogether different rate (a rate he's NOT advocating be changed, by the way). He does not stand to suffer one bit if income taxes are increased. But everyone poorer than him (which is most everyone in the country) will have a harder time bringing themselves up to his level if he convinces us all that taxes need to be raised on the rich.
It's a power play. He's trying to close the door behind him and keep others from becoming as powerful.

Sorry, but GPA is a very good way to make the comparison. You earn your GPA, just as you earn money. You need not go any farther than that.

Grades are an artificial creation specifically for the academic system in order to rank your capabilities as a student so that you can advance to higher levels of education.

.
You do know that the United States is based on a fiat currency right now, right? If we still operated on a gold/silver standard, maybe you'd have an argument.

[Thealexa Becker]

Roy,

Grades DO NOT equal taxes in my opinion and apparently nothing I say by way of a more accurate comparison or analysis is going to convince you. So I will play on your terms for the fun of it.

If I were earning an A with a 3% cushion to keep that grade (so like I have a 98% and need only a 95% to keep an A), I wouldn't care if the teacher took that 3% and gave it to someone else, as long as I kept my A. How's that? And how is that any different than asking the rich to pay a little bit more into the system without asking them to alter their standard of living?

Stephen,

Not creating children that we cannot feed...THAT is funny. How do you propose we stop THAT?

And WHAT exactly is the root of the problem if it isn't the unequal distribution of wealth?

You think the rich getting richer is a mantra, and yet you quoted it as a fact...Contradiction?

Not only are there more rich, but they're also richer. Their financial wealth jumped 9.7% over the last year to $42.7 trillion. Meanwhile, the U.S. GDP grew 1.9% in the first quarter of 2011, according to the U.S. Department of Commerce.

[Stephen Eisel]

You think the rich getting richer is a mantra, and yet you quoted it as a
fact...Contradiction?

No!
Not only are there more rich, but they're also richer a big difference from just the rich getting richer.. now there are more rich..