Taxes

[madness31]

At this point I assume everyone is aware the US government has a huge budget problem. Spending cuts are required to tackle this issue and these cuts will have to dramatically impact military spending as well as curb Medicare/Medicaid liabilities/spending and numerous other programs.

Revenue is also incredibly important to solving this problem. The problem with growing revenue is that it requires economic growth or atleast stability to pull that off. Raising taxes, a dirty word in Republican circles, typically has a negative impact on growth while lowering taxes has a positive impact on growth but doesn't necessarily increase revenue. The one place where tax rates don't have a negative impact on growth is when applied to those making $1M and above. Taken to extremes even this high income group can be impacted but a few percent will hardly impact their spending or investment.

Some will argue it is unfair to penalize a group of "productive" people while not forcing a similar burden on everyone else. The first item to consider is that raising taxes on the middle and low income classes will destroy economic growth and therefore decrease tax revenue and exacerbate the US budget problem.

The second consideration is that this is not an unfair "penalty" because the group in discussion is the same group that benefits disproportionately from easy money federal reserve policies. Their stock portfolios and other investments (excluding real estate, which is stuck in a multi-year down trend) increase rapidly when interest rates are held low and money is pumped into the system. Others see some of this portfolio benefit but not to the degree seen by this upper income bracket. Much of the benefit seen by the middle class is offset by rising prices for food and energy, which is also caused by the easy money fed policies. The poor of course see non of the benefit and all of the pain.

When considering the disproportionate benefit realized by the "rich" from government policies is it unfair to raise their taxes to assist with the budget solution? Judging by some of the lowest tax rates in history, the disproportionate amount of wealth held by the top 1% and how fast their wealth has grown in years when the average family saw declines, I would argue that it is a very reasonable policy.

For those interested in ending the Fed, I hear that argument, but that is a separate issue. This is more about creating solutions and discovering whether a tax increase on those paid $1M plus per year is unjust. This would be a small impact on the overall problem but every bit helps and it does add up. It also goes a long way to creating compromise between Republicans and Democrats.

[smileyy]

A common argument for high marginal tax rates is that they encourage re-investment rather than cashing out. I'm not opposed to giving it a try.

[Kahns Krazy]

I would propose that we simply cut off all publicly funded programs for the bottom 1% of wage earners.

When considering the disproportionate benefit realized by the "poor" from government policies is it unfair to lower their benefits to assist with the budget solution? Judging by some of the lowest tax rates in history, the disproportionate amount of cost generated by the bottom 1% and how fast their burden has grown in years when the average family saw declines, I would argue that it is a very reasonable policy.

[blobfan]

Forget raising taxes. That's the easy way out. Someone needs to go through the tax code and make the hard choices to clean things up and close loopholes. Raising taxes is just a stop-gap measure.

[Kahns Krazy]

Forget raising taxes. That's the easy way out. Someone needs to go through the tax code and make the hard choices to clean things up and close loopholes. Raising taxes is just a stop-gap measure.

"Closing loopholes" is the same as selectively raising taxes.

Some might argue that mortgage interest deductions are "loopholes", and should be closed. That would raise tax revenue, right?

[smileyy]

Some might argue that mortgage interest deductions are "loopholes", and should be closed. That would raise tax revenue, right?

They also have the interesting side-effect of artificially inflating the prices of houses.

[GuyFawkes38]

"Closing loopholes" is the same as selectively raising taxes.

Some might argue that mortgage interest deductions are "loopholes", and should be closed. That would raise tax revenue, right?

Nearly every policy expert supports abolishing the mortgage interest deduction. I'm all for it.

But politically, it would be a difficult task to get rid of.

There has been some talk of not increasing tax rates but capping tax deductions (for example, to 2% of total income). Politicians could proclaim that they have not raised tax rates and have not abolished any tax deductions (of course, regardless, taxes would increase substantially).

[Muskie]

I'd be ok with more taxes if the Federal and State goverments were using my current tax dollars efficiently. Until they can efficiently use the money they take from me, I see no reason for them to take more.

[madness31]

I agree with both eliminating tax loopholes/deductions as well as eliminating financial aid to everyone. I would suggest reviewing the minimum wage level if aid will be eliminated. Should aid be stopped abruptly and low income workers are no longer able to support their families it will likely result in increased crime and further deterioration in some neighborhoods. It would not be shocking to see slum like conditions similar to India if aid is stopped.

The elimination of aid would also result in a decrease in economic activity, especially if including unemployment payments. This would have to be phased in or the economic effects would be severe. There are numerous businesses that depend on this aid being provided. They would need time to adjust their business model.

What many fail to realize is financial aid to the lowest income brackets also benefit the upper 2% as well as the bottom. It without a doubt results in increased spending on goods and services and also enables employers to pay below a living wage or provide no insurance. It is only when tax rates begin to rise or government services are reduced that the top 2% stop receiving this benefit. The middle is shafted the entire time as their tax dollars support these programs while they receive no benefit (unemployment insurance excluded).

[bjf123]

Syndicated columnist and George Mason University economics professor Walter Williams had an interesting column (http://econfaculty.gmu.edu/wew/articles/11/EatTheRich) a few months ago in which he claimed that taxing all incomes over $250,000 at 100%, taxing all corporate profits at 100%, and taking 100% of the wealth from every US billionaire would not fund the current level of government spending for even one year. I'll trust that he's run the numbers and his claims are accurate. We don't have a revenue problem, we have a spending problem.

[bigdiggins]

Obama has mentioned in his speeches regarding taxing the rich the notion of "shared sacrifice". The problem with that is less than 50% of the people are paying all the taxes. That is not shared sacrifice. Half the folks have no skin in the game. If I need to pay more in taxes to solve the problem than so be it, but only if everyone is going to start actually sharing the sacrifice.

Also, if you're going to get rid of the mortage interest deduction they should also get rid of the child tax credit. It is a lifestyle decision to own a home, and it is a lifestyle decision to have children. My portion of the shared sacrifice should not be more than yours simply beacuse you chose to have a bunch of kids.

[madness31]

It is a spending problem but additional revenue won't hurt. The problem with shared sacrifice is that it will negatively impact the economy. That will negatively impact jobs which will further negatively impact the economy. It is a circular cycle.

As my initial post points out the "rich" are receiving huge benefits from easy money policies and tax increases would offset only a small fraction of this benefit. The middle class is not sharing proportionally in this benefit so why should they share proportionally in the "sacrifice"? More importantly why would you want to choke off economic growth for what you believe is fair? If "fair" results in a depression it will further exacerbate the problem and likely bankrupt the country. I'm assuming that is not the result you are looking for but unless you can explain how less money in the hands of the consumer, in an economy dependent on the consumer for 70% of spending isn't going to result in less spending then that seems to be the result of "fair".

[GuyFawkes38]

It sounds like a VAT will be likely (seems like a broad consensus of Democrats and Republicans like it).

Taxes will go up for the wealthy. But they will go up for everyone else too. They have to.

Maddness31, read this article:

http://prospect.org/csnc/blogs/tapped_archive?month=05&year=2011&base_name=dems_cant_just_rely_on_million

[Kahns Krazy]

They also have the interesting side-effect of artificially inflating the prices of houses.

I don't know about that. Interest is deductible as a business expense for landlords. Why would a mortgage interest deduction for home ownership artificially inflate prices?

[GuyFawkes38]

I don't know about that. Interest is deductible as a business expense for landlords. Why would a mortgage interest deduction for home ownership artificially inflate prices?

It's regressive. Wealthier people tend to live in more expensive homes/apartments. They benefit from it. Tax policy should ideally not be so regressive.

Bigger picture, Smiley's right. it's a major subsidy for the real estate industry. Why should they get this subsidy?

If the deduction ended, it would be more expensive to finance a home. Demand would go down, which would lower home prices.

[Kahns Krazy]

It's regressive. Wealthier people tend to live in more expensive homes/apartments. They benefit from it. Tax policy should ideally not be so regressive.

Bigger picture, Smiley's right. it's a major subsidy for the real estate industry. Why should they get this subsidy?

If the deduction ended, it would be more expensive to finance a home. Demand would go down, which would lower home prices.


Whaaaaa?

It's not a subsidy for the real estate industry, it's a public policy to bring the costs of home ownership in line with the rental real estate business.

If you take away the mortgage interest deduction, it would become relatively cheaper to rent than to own than it is today. Property would become more valuable to corporate rental interests. The total cost of home ownership would rise relative to today.

Moreover, if you enact a public policy change that changes the pricing structure of existing owned assets, you move a lot of personal wealth away from individuals and into property holding interests.

The mortgage interest deduction is a good idea. Encouraging home ownership is a good idea.

[bobbiemcgee]

Encouraging home ownership is a good idea.

Encouraging home ownership the last 5 years where I live would have lost you 50% of your investment. It's right for some with the correct timing. As we saw, many should have never owned a house. As a general rule - no way.

[GuyFawkes38]

Whaaaaa?

It's not a subsidy for the real estate industry, it's a public policy to bring the costs of home ownership in line with the rental real estate business.

If you take away the mortgage interest deduction, it would become relatively cheaper to rent than to own than it is today. Property would become more valuable to corporate rental interests. The total cost of home ownership would rise relative to today.

Moreover, if you enact a public policy change that changes the pricing structure of existing owned assets, you move a lot of personal wealth away from individuals and into property holding interests.

The mortgage interest deduction is a good idea. Encouraging home ownership is a good idea.

Corporate rental companies shouldn't be able to deduct interest either

I like this explanation:

http://economix.blogs.nytimes.com/2009/02/24/killing-or-maiming-a-sacred-cow-home-mortgage-deductions/?em

The article notes that the more inelastic the supply of homes is, the less savings home consumers receive, because subsidization increases the prices of homes.

If there's a limited number of home and you give everyone more cash to spend only on homes, does the consumer really benefit? As the article notes, it's really just a transfer from the buyer to the seller.

More than homeowners, the subsidy benefits real estate agents, home builders, and banks.

[LadyMuskie]

I'd be ok with more taxes if the Federal and State goverments were using my current tax dollars efficiently. Until they can efficiently use the money they take from me, I see no reason for them to take more.

Couldn't agree more! Until the governments I pay taxes to learn how to budget properly I am against giving them any more money to squander.

[HuskyMuskie]

http://www.youtube.com/watch?v=CP9_kkzfN-w

[LadyMuskie]

Encouraging home ownership the last 5 years where I live would have lost you 50% of your investment. It's right for some with the correct timing. As we saw, many should have never owned a house. As a general rule - no way.

I think that the problem isn't that some people should never have owned any house, it's that they shouldn't have owned the houses they bought because the banks gave them more money than they could possibly afford to pay back and they didn't stop and say "Hey. I can't afford a $3000 a month payment when I only make $70,000 a year". I know when we started our house hunt we were offered $100,000 more from the bank than we were comfortable borrowing. We were smart enough to know that we couldn't afford a mortgage payment that high and were disciplined enough to stay on budget when we bought our house. But, many people didn't do that, and it wasn't just the poor. There are new neighborhoods with $250,000 houses all over littered with foreclosure signs and for sale signs. It's not just low income people or neighborhoods.

The reason home ownership is good is because it encourages people to take a greater interest in their community, schools, and economy. If people are living in a constant habitat, they are more likely to be contributing members of their immediate society, as opposed to those who rent and move every year. There is a more at stake for a homeowner and greater reason for him to take care of the property and the community in which the property resides. This is why schools in neighborhoods where there are more homeowners and fewer renters are better. This is why the government offers the mortgage interest deduction. It's worth it to encourage people to own a home in order for the government to reap the benefits of responsible home owners.

[DART87]

Encouraging home ownership is a good idea!

The mortgage tax deduction does more to encourage debt (and bank profits) than it does to directly encourage home ownership. It is a bank subsidy.

If encouraging home ownership is the goal of the program, why should someone who has their home nearly or completely paid off get nothing in tax breaks while someone else who has their property highly leveraged get thousands in breaks?

If the govt wants to use tax breaks to encourage home ownership...eliminate the mortgage interest tax break and create a deduction for single family home ownership.

[GuyFawkes38]

I've heard the mortgage interest deduction referred to as welfare for the wealthy.

It's regressive. The government is giving larger deductions to wealthier people in this program. It encourages people to take on more debt.

That's not a "safety net". At least section 8 is more of a true safety net.

[Kahns Krazy]

I've heard the mortgage interest deduction referred to as welfare for the wealthy.

It's regressive. The government is giving larger deductions to wealthier people in this program. It encourages people to take on more debt.

That's not a "safety net". At least section 8 is more of a true safety net.

Larger deductions to wealthier people does not necessarily mean regressive. With 43% of Americans paying no federal income tax, you will not be able to convince me that any non-refundable deduction is regressive. Wealthier people pay more taxes in terms of percentage and gross dollars. That is not regressive.

Do some critical thinking for yourself sometime instead of just parroting what you read once in the NYTimes opinion pages.

[GuyFawkes38]

Larger deductions to wealthier people does not necessarily mean regressive. With 43% of Americans paying no federal income tax, you will not be able to convince me that any non-refundable deduction is regressive. Wealthier people pay more taxes in terms of percentage and gross dollars. That is not regressive.

Do some critical thinking for yourself sometime instead of just parroting what you read once in the NYTimes opinion pages.

Do you dispute these numbers:


Problem #3: The deduction is wildly regressive. The tax savings for households earning more than $250,000 is 10 times the tax savings for households earning between $40,000 and $75,000 a year, according to recent research by James Poterba and Todd Sinai. If there ever was a case for small-government egalitarianism, then this is it. Eliminating the home mortgage deduction and replacing it with an across-the-board tax cut would equalize after-tax incomes without a single new government program.

The program flattens tax rates. That's the definition of regressive. The 40k-70k earner very well might not be paying much or at all in taxes. But without the mortgage interest deduction, the tax code would be more progressive. It's a regressive deduction.

The IMF considers the mortgage deduction regressive.

http://blogs.wsj.com/developments/2011/04/06/imf-calls-mortgage-interest-deduction-regressive/

Notice the end of that article:


The deduction is generally disliked by economists, who say it mostly encourages wealthier Americans to take on more debt. The deduction applies only to the roughly one-third of taxpayers who itemize their returns, typically those with higher incomes.

This is one issue in which both liberal and conservative economist agree.

Milton Friedman considered it regressive. He's not a commie.

[madness31]

Encouraging home ownership was not the problem that caused the financial meltdown. It was simply a lack of lending standards by financial institutions combined with outright fraud and easy money from the Fed. The government definitely played their role with the minimal downpayments required by the quassi government agencies. That being said most financial institutions were waiving downpayments completely and some were even giving loans exceeding the value and cost of the home. Without a sizeable downpayment there is no reason for someone to stick with the loan when the price declines.

I'm strongly in favor of a tax code that has 0 deductions. Taxes should be pulled straight from paychecks based on income level and no filing should be required. Those that had gaps in employment or experienced extreme fluctuations could file at year end or maybe the government just processes final W-2's from corporations to make appropriate adjustments.

Businesses could still deduct expenses so the filing process for corporations and businesses wouldn't change other than the elimination of special subsidies and other tax loopholes. All corporations should be treated the same with a 20% income tax rate.

Regarding the article on individual tax rates needing to go higher for the middle class, it depends on how much spending is cut. If the government gets serious and cuts military spending and takes care of future liabilities for medicaid/medicare then fewer tax hikes will be necessary. As I mentioned previously tax hikes at certain income levels lead to less economic activity which negatively impacts government revenues. The impact could result in less total tax revenue if economic activity drops more than the rate increase. The $1M level I suggested could likely be lowered significantly without causing much of an economic impact but I do not have the data to determine the exact income level. I feel $1M is very safe but suspect it could be as low as $500K or even lower.

I know when my income went above $50K a year I could have easily paid a much higher income tax rate without changing my spending habits (actually I've always banked a huge percentage of my salary even at $30K) but I believe I am an aberation and not the norm. It is my belief from data I've seen and seeing those around me that most people anywhere near that income level spend everything they make other than possibly what they put into a retirement account. Anytime taxes go up on a class of people that basically spend everything they make, discretionary spending is forced lower or debt rises. This can lead to recessions which can actually lower government revenue even though rates went higher. The primary reason the US economy is growing is because Obama lowered the payroll tax (which is paid by everyone working) by 2% this year. The other big growth factor is exports. The decrease in payroll tax is set to expire at year end if I recall correctly. That will certainly negatively impact the economy next year.

[Porkopolis]

The general tanking of the job market has a lot to do with the crazy foreclosure rate, too. My wife and I are a prime example. We were approved for a 250K loan but only borrowed 165K. With our income it should have been easy enough to make our mortgage payments even if one of us lost our job. Well, guess what? I lost my job and my wife took a significant pay cut.

We had to move to Cincinnati from Columbus for both of us to find jobs again and rented out the house, thinking our problems were solved at least temporarily. They were until the renter stopped paying and squatted on the property. He also did tens of thousands of dollars worth of damage to the property and committed identity theft against me, throttling my credit rating until I go things sorted. By the time we were able to evict him and fend off his malicious housing discrimination lawsuit we had fallen behind and entered foreclosure. Luckily we were able to sell the house--at a substantial loss--before the foreclosure was finalized. Many in our neighborhood were not so lucky. Last time I was in Columbus I drove through and every house on the street was for sale, including our old home.

[Kahns Krazy]

Do you dispute these numbers:


Quote:
Problem #3: The deduction is wildly regressive. The tax savings for households earning more than $250,000 is 10 times the tax savings for households earning between $40,000 and $75,000 a year, according to recent research by James Poterba and Todd Sinai. If there ever was a case for small-government egalitarianism, then this is it. Eliminating the home mortgage deduction and replacing it with an across-the-board tax cut would equalize after-tax incomes without a single new government program.




I don't necessarily dispute the numbers since I can't see the data or methodology, but I do see a data set cherry picked to produce a desired result. I can't even tell from this statement if they are comparing home owners to homeowners, or just income bands in total.

It is absolutely ridiculous to compare households making $40,000 - $75,000 to those making $250k. A family of four making $40k gets a federal tax refund right off the bat. They pay less than zero tax before any itemized deductions. A mortgage interest deduction can not result in any "tax savings" for this family, because there is no tax.

A family of four making $75k has a maximum tax liability of $4,516 before any deductions or credits of any kind other than the child tax credit.

A family of 4 making $250k starts with a tax liability of $51,701, strictly on the tax tables.

So you're comparing a population that ranges from a negative effective rate to a maximum of a 6% tax rate to a population that starts at a 20.6%. Do I dispute that the value of the mortgage interest deduction is higher to those people? Of course not. Does that make it regressive? Nope.



I guess it depends on you define the term "regressive"


No, it doesn't. You can't just take one portion of the tax code and label it as "regressive". In order for taxes to be regressive, someone at a lower income rate would need to be paying a higher percentage of their earnings in taxes than someone at a higer income. That just doesn't happen in the federal income tax world, even if someone in the NYTimes says it does.

Do they not teach critical thinking anymore?

[Kahns Krazy]

The program flattens tax rates. That's the definition of regressive. .

Wait, I missed this part. I didn't realize you were making up your own definitions. So a tax structure that taxes a 75k earner at 6% and a 250k earner at 20% is regressive because you could tax the 250k earner at a higher rate?

[xu95]

The easiest solution is just to get rid of the IRS and have a national sales tax. It isn't fair to tax someone more just because they have been able to make more.

xu95

[Snipe]

I am a big fan of the Fair Tax (http://www.fairtax.org).

It is a progressive consumption tax, which also abolishes the IRS.

Taxation is our problem though, spending is. We simply can't afford the empire or the welfare state.

[GuyFawkes38]

I don't necessarily dispute the numbers since I can't see the data or methodology, but I do see a data set cherry picked to produce a desired result. I can't even tell from this statement if they are comparing home owners to homeowners, or just income bands in total.


Whether your a homeowner or not is irrelevant. I'm sure the numbers don't take that into account.


Wait, I missed this part. I didn't realize you were making up your own definitions. So a tax structure that taxes a 75k earner at 6% and a 250k earner at 20% is regressive because you could tax the 250k earner at a higher rate?

I'm not quite sure what your definition of a regressive program is. It's apparently different from the IMF's and most economists.

Yes, the mortgage interest deduction flattens effective tax rates. Without it, effective tax rates would be more progressive for the income range noted in the article.

Like you said, even with the mortgage interest deduction, we still have a progressive tax structure (yes, I'll admit it, it's highly progressive).

You may think that the 250K earner is already paying a larger proportion of his income than the 70k earner, so he should receive more of a benefit from the deduction. That's fine.

But you can't argue that the mortgage interest deduction isn't a regressive program.

[bobbiemcgee]

Encouraging home ownership was not the problem that caused the financial meltdown. It was simply a lack of lending standards by financial institutions combined with outright fraud and easy money from the Fed. The government definitely played their role with the minimal downpayments required by the quassi government agencies. That being said most financial institutions were waiving downpayments completely and some were even giving loans exceeding the value and cost of the home. Without a sizeable downpayment there is no reason for someone to stick with the loan when the price declines.



So you're saying no personal responsibility was involved? The guvment did it to me? I can easily afford that 3000 PITI payment on a 4500 a month salary with zero down? So what if the house I just bought was $450,000 when it was 295,000 last year? I'll just sell it to some other sucker for 600,000?

The guvment didn't sign the ownership papers but were certainly in the scam with the new owners, Bankers, Appraisers and Loan Officers, everyone of them getting a piece on the way by. As it turns out, the guvment may have well as signed. And yes the owners benefitted by months and even years of rent-free living.

[Kahns Krazy]

Whether your a homeowner or not is irrelevant. I'm sure the numbers don't take that into account.



I'm not quite sure what your definition of a regressive program is. It's apparently different from the IMF's and most economists.

Yes, the mortgage interest deduction flattens tax rates. Without it, tax rates would be more progressive for the income range noted in the story.

Like you said, even with the mortgage interest deduction, we still have a progressive tax structure (yes, I'll admit it, it's highly progressive).

You may think it's unfair. That fine. But you can't argue that the mortgage interest deduction isn't regressive.


I can, and I have. There is no such thing as progressive or regressive deductions. It's taxes that are progressive or regressive. Our federal income taxes are progressive. Less progressive is not regressive, it's less progressive.

In order for your argument to be valid, you need would need to start with a federal tax obligation. That is not how our federal income taxes work. You start by figuring out what your taxable income is, then your tax is based on that amount. The deductions are all figured in before you even establish a tax liability. You can't arbitrarily pick an order to apply deductions from gross income and label them as progressive or regressive.

A big part of the reason that the net effect of the mortgage deduction is larger for higher income households is the size of the standard deduction. If you change or eliminate the standard deduction, it would impact the net effect of the existing mortgage interest deduction. It doesn't exist in a vacuum, and you can't judge it in a vacuum.

[GuyFawkes38]

I think our argument stems from defining regressive.

A VAT tax is considered to be a regressive tax.

If the US decided to add a 5% VAT tax, the 250k earner will still likely pay a larger proportion of their income than the 40k earner.

But that doesn't take away the regressive nature of the VAT tax. The proportion of income that the 250k earner pays in taxes will be closer to the proportion that the 40k earner pays. The VAT will flatten the effective rates.

A deduction is not a tax. But it works in a similar way. The home mortgage deduction brings the effective tax rate of the 250k earner closer to the 40k earner. It's regressive in nature, even though the system, as a whole, remains progressive.

[Kahns Krazy]

I think our argument stems from defining regressive.

A VAT tax is considered to be a regressive tax.

If the US decided to add a 5% VAT tax, the 250k earner will still likely pay a larger proportion of their income than the 40k earner..

What is your source on that? Are you really arguing that the savings rate is higher for a $40k earner than a $250k earner?

A VAT tax is considered regressive because people consume at a higher proportion of their income at lower levels. If I make $40k and spend $38k, I will pay $1900 in a 5% VAT (4.75% effective tax rate). If I make $250k and spend $200k, I will pay $10,000 in VAT, or 4%. That is a regressive tax.

Nothing about a federal tax structure that has the following tax rates : $40k (0%), $75k(6%), $250k (20%) can be considered regressive. Even if there were somehow a deduction that made it possible for a regressive scenario, there are mechanisms in place to prevent that from actually happening (AMT, loss carry-forwards, phase outs, etc).

As many people have pointed out, it has nothing to do with not taxing the rich enough in this country. It has far more to do with not taxing too many people at all, and out of control spending.

[GuyFawkes38]

Your arguing that it's impossible for a tax deduction to be regressive.

But if the mortgage tax deduction brings the effective tax rate of the 250k earner closer to the 40k earner, it behaves in a regressive matter like a VAT tax, or by simply lowering the income tax rates to make them less progressive.

Yes, the 250k still pays a much larger proportion of his income than the 40k earner. Regardless, without the mortgage income deduction, the 250k earner would pay even a larger proportion of his income than the 40k earner.

According to this article (http://www.brookings.edu/opinions/2011/0328_mortgage_interest_deduction_pozen.aspx), the mortgage deduction costs nearly a 100 billion a year. It's distortionary, regressive and expensive.

[xu95]

I'm not sure why people think it's fair for someone's tax rate to be higher just because they make more.

[Kahns Krazy]

Your arguing that it's impossible for a tax deduction to be regressive.

But if the mortgage tax deduction brings the effective tax rate of the 250k earner closer to the 40k earner, it behaves in a regressive matter like a VAT tax, or by simply lowering the income tax rates to make them less progressive.

Yes, the 250k still pays a much larger proportion of his income than the 40k earner. Regardless, without the mortgage income deduction, the 250k earner would pay even a larger proportion of his income than the 40k earner.

According to this article (http://www.brookings.edu/opinions/2011/0328_mortgage_interest_deduction_pozen.aspx), the mortgage deduction costs nearly a 100 billion a year. It's distortionary, regressive and expensive.


On its own, the deduction only serves to reduce taxable income. That's all it does. If the tax rates were equal at every income rate, it would not be "regressive" as you call it. Only because of the progressive tax rates and the existance of the standard deduction does the net effect of the deduction change a higher earner's rate more than a lower.

Also, deductions from gross income do not "cost" anything. The federal tax revenue is derived from taxable income. There is no such thing as a federal tax liability on your gross income in a way that somehow "costs" anything to reduce. Taxes are the revenue side. It's not like there was $100 billion in cash laying around already, and the federal government had to write checks to someone.

[Kahns Krazy]

Your arguing that it's impossible for a tax deduction to be regressive.
.

Yes. I am. There is no such thing. A tax can be regressive. A component of the calculation of a tax can not. There is no "renters tax".

Try this:

Google "regressive tax" and see what kind of hits you get. Here are the websites for the top results:
en.wikipedia.org/wiki/Regressive_tax
www.investopedia.com
www.irs.gov/app/understandingTaxes/.../whys_thm03_les02.
www.britannica.com/EBchecked/topic/496192/regressive-tax - Cached - Similar
ase.tufts.edu/gdae/pubs/wp/03-10-tax_incidence.pdf - Similar
financial-dictionary.thefreedictionary.com/Regressive+Tax - Cached - Similar
www.investorwords.com/4138/regressive_tax.html - Cached - Similar

Google "Regressive deduction" and you get a lot of blogs, opinion pages and sites with agendas.

Regressive deductions aren't a thing. It's a made up term to portray a particular deduction in a negative light by someone with a reason for doing so.

[madness31]

So you're saying no personal responsibility was involved? The guvment did it to me? I can easily afford that 3000 PITI payment on a 4500 a month salary with zero down? So what if the house I just bought was $450,000 when it was 295,000 last year? I'll just sell it to some other sucker for 600,000?

The guvment didn't sign the ownership papers but were certainly in the scam with the new owners, Bankers, Appraisers and Loan Officers, everyone of them getting a piece on the way by. As it turns out, the guvment may have well as signed. And yes the owners benefitted by months and even years of rent-free living.

Actually I didn't comment on personal responsibility at all. No doubt people could have and should have made more responsible decisions. Some however are not capable of making those decisions because they do not have the intelligence nor the education to do so.

I would argue personal responsibility is less important in the case of the financial meltdown because corporations have a fiduciary duty for risk management. They ignored that responsibility and went after the big payday. This is the danger of the current bonus system in the financial arena. Executives, managers, traders, etc are all incentivised to maximize profit without regard to risk. If their gambles pay-off the payday is huge and if not someone else pays the price. Just claim everyone was doing it, there was no way to know it would go bad, etc and you are in the clear. Excluding the fraud by the loan originators or the loan applicants the people using leverage and changing downpayment rules were all intelligent enough to realize this would eventually end in pain. They ignored that purely for greed. If any of these people didn't understand that principle, then they were not qualified to be in a leadership position and definitely didn't deserve the enormous pay packages received.

Personal responsibility is a lost principle in this country. It is a shame. I've been arguing against unemployment insurance and social security because they both minimize personal responsibility. I'm in favor of a public safety net for healthcare because it is impossible to plan for health issues and the enormous cost of treatment but retirement and job loss are things people should plan for (it is possible to say no to the child/husband/wife and save money). I also believe a lack of public healthcare is a detriment to business creation, especially for those with preexisting conditions.

[GuyFawkes38]

The point still stands regardless of what it's called.

A deduction that's designed to increase homeownership is saving cash for the country's wealthiest people.

From this yahoo article (http://finance.yahoo.com/real-estate/article/109334/mortgage-deduction-americas-costliest-tax-break?mod=realestate):


Of those who had mortgages in 2008, roughly 72% claimed the mortgage deduction. But those who benefited most were higher-income households, according to the Joint Committee on Taxation.

Almost half of the returns claiming the deduction were from filers with incomes over $100,000, and roughly 75% in foregone revenue that year went to them

Bush believed this deduction should be capped. The Obama debt commission calls for its removal.

I think it's going to happen.

[Snipe]

On its own, the deduction only serves to reduce taxable income. That's all it does. If the tax rates were equal at every income rate, it would not be "regressive" as you call it. Only because of the progressive tax rates and the existance of the standard deduction does the net effect of the deduction change a higher earner's rate more than a lower.

Also, deductions from gross income do not "cost" anything. The federal tax revenue is derived from taxable income. There is no such thing as a federal tax liability on your gross income in a way that somehow "costs" anything to reduce. Taxes are the revenue side. It's not like there was $100 billion in cash laying around already, and the federal government had to write checks to someone.

Ever hear of Obama saying he wants to “REDUCE SPENDING THROUGH THE TAX CODE”. It is hilariously Orwellian. People want to reduce government spending, so he has decided he wants to "reduce spending through the tax code". What that really means is that he wants to increase taxes. It has nothing to do with spending. To Obama though, we spend money through the tax code, and he wants to reduce those expenditures. He has talked about taking away some of the benefits for charitable contributions and taxing them. He has talked about taking away the home mortgage deduction. Other people have talked about excessive spending through the tax code for 401Ks, which mature every year tax free.

Barack Obama promised that he would go through the budget "line by line" to reduce spending. He assured libertarians and independents that he would reduce the size of government. The only thing he has really proposed to reduce is "Spending through the tax code", which is really just raising your taxes. Meanwhile government spending has continued unabated.

[X-band '01]

Social Security and Medicare Tax Rates (http://www.ssa.gov/oact/progdata/taxRates.html)

Maximum SS Limit (http://www.ssa.gov/oact/COLA/cbb.html#Series)

For example, the SS rate in 2011 is 6.2% for employers and 4.2% for employees on all income up to $106,800. Once you get beyond that income, your Social Security tax rate is 0%. That by definition is a regressive tax, my friends.

I also looked at one of Kahn's links - they also refer to "sin taxes" on things like tobacco and alcohol. I suppose that's regressive in a socioeconomic sense, meaning that lower-income people are more likely to pay taxes on the above than more affluent people would. Was it Cleveland that wound up passing similar "sin taxes" to fund their stadiums/arenas in the mid-90s?

[Snipe]

I think Social Security is a progressive program. The rich pay more in taxes and the poor get more in benefits as compared to their contributions. Once they reform it, it will look even more like just a straight welfare program.

[Kahns Krazy]

The point still stands regardless of what it's called.

A deduction that's designed to increase homeownership is saving cash for the country's wealthiest people.

From this yahoo article (http://finance.yahoo.com/real-estate/article/109334/mortgage-deduction-americas-costliest-tax-break?mod=realestate):



Almost half of the returns claiming the deduction were from filers with incomes over $100,000, and roughly 75% in foregone revenue that year went to them
Bush believed this deduction should be capped. The Obama debt commission calls for its removal.

I think it's going to happen.

Foregone revenue? It's part of the tax code, and has been since the creation of income taxes in this country. When the tax rate is set at 33% of taxable income, do you consider the other 67% that isn't tax as "foregone revenue"? The one time $8,000 home buyer credit was closer to foregone revenue than an original deduction to taxable income.

This is just silly. Our tax code is not written to realize anything close to the nominal tax rate. Deductions are legitimate tools to influence public behavior. There is nothing "regressive" or evil about the mortgage interest deduction. You read something about a mortgage interest deduction being "regressive" and you repeated it here without really thinking about it. Your refusal to admit that you're just wrong about any part of the federal income tax code being anything approaching regressive is bordering on _LHish.

[Kahns Krazy]

Social Security and Medicare Tax Rates (http://www.ssa.gov/oact/progdata/taxRates.html)

Maximum SS Limit (http://www.ssa.gov/oact/COLA/cbb.html#Series)

For example, the SS rate in 2011 is 6.2% for employers and 4.2% for employees on all income up to $106,800. Once you get beyond that income, your Social Security tax rate is 0%. That by definition is a regressive tax, my friends.

I also looked at one of Kahn's links - they also refer to "sin taxes" on things like tobacco and alcohol. I suppose that's regressive in a socioeconomic sense, meaning that lower-income people are more likely to pay taxes on the above than more affluent people would. Was it Cleveland that wound up passing similar "sin taxes" to fund their stadiums/arenas in the mid-90s?

Social security is it's own animal. In theory, there is a specific benefit tied to your contributions. It is not a tax in the same sense as other taxes. In another thread, I showed that under current law, and individual can expect to receive more in SS benefits over their lifetime than they pay in. In practice, your contributions still go into the general fund, so it sort of still is a tax.

Overall, social security is a progressive contribution (tax) program.

[GuyFawkes38]

I guess we can agree to disagree.

Just want to lastly add that the mortgage deduction was created nearly a hundred years ago to increase homeownership.

Is it really worth the opportunity cost of, yes, "foregone revenue" to fund someone's 2nd or 3rd home? At the very least, shouldn't the mortgage deduction be tweaked to provide a deduction for one's primary home and not one's summer home?

Credit card interest payments used to be deductible. Is that good policy?

Why should we reward consumers to be over-leveraged, whether it comes buying homes or cars or whatever?

[Kahns Krazy]

I guess we can agree to disagree.

Just want to lastly add that the mortgage deduction was created nearly a hundred years ago to increase homeownership.

Is it really worth the opportunity cost of, yes, "foregone revenue" to fund someone's 2nd or 3rd home? At the very least, shouldn't the mortgage deduction be tweaked to provide a deduction for one's primary home and not one's summer home?

Credit card interest payments used to be deductible. Is that good policy?

Why should we reward consumers to be over-leveraged, whether it comes buying homes or cars or whatever?

Since you insist on documenting your ignorance on the subject, I'll go ahead and point out that a third home is not eligible for the mortgage interest deduction. There is also already a cap on the total mortgage value eligible for the deduction of $1 million. With mortgage rates at 5% or less, we are talking about a maximum individual deduction of $50,000. With a current top tax bracket of 35%, the absolute maximum reduction in tax due is $17,500.

Basically, to realise any material increase in tax revenues, you are talking about a substantial tax increase to the middle class.

[GuyFawkes38]

Since you insist on documenting your ignorance on the subject, I'll go ahead and point out that a third home is not eligible for the mortgage interest deduction. There is also already a cap on the total mortgage value eligible for the deduction of $1 million. With mortgage rates at 5% or less, we are talking about a maximum individual deduction of $50,000. With a current top tax bracket of 35%, the absolute maximum reduction in tax due is $17,500.

Basically, to realise any material increase in tax revenues, you are talking about a substantial tax increase to the middle class.

My fault on the third home. I'm all for increasing middle class taxes. It has to happen.

Kahns, you might think I'm an idiot for being an opponent of the mortgage deduction. But as the WSJ article that I linked to noted, most economist believe it should be abolished or capped (economists are generally against deductions because they believe they cause distortions).

There's a consensus building. Perhaps it won't be abolished, but I think it will be capped much lower. The government could grab billions in revenue. It's too tempting.

As Snipe noted, in general, deductions will be restricted in the next 10 years. It's a more appealing sell than increasing tax rates.

[Snipe]

Foregone revenue? It's part of the tax code, and has been since the creation of income taxes in this country. When the tax rate is set at 33% of taxable income, do you consider the other 67% that isn't tax as "foregone revenue"? The one time $8,000 home buyer credit was closer to foregone revenue than an original deduction to taxable income.

This is just silly. Our tax code is not written to realize anything close to the nominal tax rate. Deductions are legitimate tools to influence public behavior. There is nothing "regressive" or evil about the mortgage interest deduction. You read something about a mortgage interest deduction being "regressive" and you repeated it here without really thinking about it. Your refusal to admit that you're just wrong about any part of the federal income tax code being anything approaching regressive is bordering on _LHish.

That is my point too! "Reduce spending through the tax code" seems to expect that ALL PERSONAL INCOME IS GOVERNMENT REVENUE, and letting you have some of it back is "spending through the tax code". What they are basically saying with that argument is that they are entitled to everything that you have, and you are lucky to keep what they let you.

I can't believe that someone can say raising taxes is simply "reducing spending through the tax code" and people let that fly. What a vigilant media we have.

I am all for getting rid of deductions and special interest tax deals, but let's be honest about it. And we need to be honest about the unintended consequences as well. Without interest free government bonds people won't buy our massive debt without higher interest rates. Without mortgage deductions housing could suffer and at the margins home ownership could well be affected.

We also need to weigh different interests to see what we want more of. If deficit spending is to be stopped, every special interest is competing with something else. If you are going to take away my mortgage deduction, are you going to do anything about the 75% of Mexican immigrant families on welfare? I would rather have them go first, but we never have these debates. We are cutting pensions to teachers and firemen, and we are talking about eliminating the mortgage interest deduction, but it would be uncouth to talk about the government expenditures on Mexican welfare queens. We need to cut everything, Medicare and Social Security included. But cut the Mexicans first to show people you are serious.

I don't believe that it will ever get done. I don't believe our government can stop spending. I think the whole system is going to have to collapse, and I believe that is a distinct possibility. We are so far out of whack on spending that you can't have a serious conversation about it without a major protest.

Are the rich going to pay for Medicare? Really? I thought they were going to pay for Social Security? What is wrong with teachers and fireman's pensions? Nothing that the rich couldn't solve. But wait a minute, can the rich really pay for everything, as well as pay for the 75% of Mexican immigrant families that are on welfare who have babies at great rates who then go on welfare?

We don't have enough money to pay for it all. You could take all the money of the Forbes 400 and it wouldn't fund our government long.

"The problem with socialism is that sooner or later you run out of other people's money" ~ Margaret Thatcher

Except that money really doesn't belong to other people, it is just simply "Government Spending Through The Tax Code". The only reason we have a nation debt isn't runaway government spending, it is because our government spent an additional 15 trillion dollars through the tax code. We should have a surplus, and they should be able to spend even more with no debt limit.

Welcome to the totalitarian state. Enjoy it while it lasts. If you know your history it won't last very long...


The deliberations of the Constitutional Convention of 1787 were held in strict secrecy. Consequently, anxious citizens gathered outside Independence Hall when the proceedings ended in order to learn what had been produced behind closed doors. The answer was provided immediately. A Mrs. Powel of Philadelphia asked Benjamin Franklin, "Well, Doctor, what have we got, a republic or a monarchy?" With no hesitation whatsoever, Franklin responded, "A republic, if you can keep it."

God Bless The Remnant!

[Kahns Krazy]

My fault on the third home. I'm all for increasing middle class taxes. It has to happen.

Kahns, you might think I'm an idiot for being an opponent of the mortgage deduction. But as the WSJ article that I linked to noted, most economist believe it should be abolished or capped (economists are generally against deductions because they believe they cause distortions).

There's a consensus building. Perhaps it won't be abolished, but I think it will be capped much lower. The government could grab billions in revenue. It's too tempting.

As Snipe noted, in general, deductions will be restricted in the next 10 years. It's a more appealing sell than increasing tax rates.

The mortgage interest deduction is already capped, so you win there. Reducing the cap won't do shit in terms of tax revenues. Cut it from $1m to $300k, and you might raise about $6 billion in brand new federal tax revenue (2 tenths of one percent of the current budget). Of course, as you have noted, you will also cut the market price for those types of homes. Here in ohio, a reduction in the value of high end homes will shift a higher percentage of the tax burden to people who own homes valued under $300,000.

You probably don't even get that much revenue, because once you take the deduction away, mortgage debt becomes far less attractive, and those who can afford to will pull money from other locations to pay down that debt. Now you still don't have that tax revenue, but you have succeeded in cutting consumer spending in other areas, and raised the tax burden for the middle class.


I'm for dramatic spending cuts. I'm also for raising taxes on everyone, not just the top 20% of earners. It is somewhat amazing to me that a family of four making $40,000 not only pays zero federal income tax, they actually get some of my money in the form of a check. The number of people and households that pay zero or less than zero in federal taxes is positively mind boggling.

[Kahns Krazy]

I don't believe that it will ever get done. I don't believe our government can stop spending. I think the whole system is going to have to collapse, and I believe that is a distinct possibility. We are so far out of whack on spending that you can't have a serious conversation about it without a major protest.
!

Five years ago, I would have said no freaking way. I'm slowly resigning myself to the idea that it's nearly inevitible because of our government system. At all levels, our elected officials are paid too much to make difficult decisions. They have a personal incentive to "kick the can down the road" and make it someone else's problem so they can keep their cushy job.

[GuyFawkes38]

I'm for dramatic spending cuts. I'm also for raising taxes on everyone, not just the top 20% of earners. It is somewhat amazing to me that a family of four making $40,000 not only pays zero federal income tax, they actually get some of my money in the form of a check. The number of people and households that pay zero or less than zero in federal taxes is positively mind boggling.

I think a VAT would be good for the reasons you note above.

[Kahns Krazy]

I think a VAT would be good for the reasons you note above.


Why create a new taxing mechanism when you already have one? Here's some things I would change immediately.

There should be no such thing as a negative federal tax liability. I don't care if you're unemployed with 100 kids. We already have an enormous network of social services to support you. You do not also need a check from the revenue service. The revenue service does not have the expertise to administer any assistance anyway.

I don't understand personal exemptions. We alredy have a progressive tax rate structure. Why do we then need personal exemptions on top of that? If the tax brackets aren't right, fix them. Ditto the standard deduction.

Why are we in the business of subsidizing breeding? A single person with basic income of $40,000 has a federal tax liability of $4,183. A family of four making that same $40,000 gets a small check from the IRS to reward their breeding.

[Snipe]

Five years ago, I would have said no freaking way. I'm slowly resigning myself to the idea that it's nearly inevitible because of our government system. At all levels, our elected officials are paid too much to make difficult decisions. They have a personal incentive to "kick the can down the road" and make it someone else's problem so they can keep their cushy job.

Looks like I will need some extra room in the Bunker!

Everyone gets so ticked off whenever anyone suggests cutting anything. We need to cut a trillion dollars from the budget. People aren't going to like it. Propose reform and you are throwing granny off the cliff, kicking kids out of school or starving children.

And the answer to every problem is to tax the rich. I think we need to tax the poor. Get some skin in the game. When half the people don't pay federal income taxes, why should they care what the government spends. Why not have more?

Bush suggested entitlement reform and they destroyed him. Paul Ryan is advancing the discussion for entitlement reform and they are trying to use it to destroy the whole party. With every year we weight the worse the situation gets and the harder it is to reform. A reason exists why they call them the "third rail" of American politics.

You can't entertain a serious discussion of our long term problems because every public statement or action will be turned into a commercial for short term political gain. It is always easier to kick the can down the road, but "things that can't go on forever, don't".

[XUglow]

Some things just make my head spin. One congressman proposed implementing the same kind of fraud checking system that even the smallest insurance companies have to run to stay in business. OMB estimated the savings at $3T over 10 years. 1) Why isn't that in place already? 2) Why is he talking about it to the press and not implementing it now? 3) Would someone actually vote against putting such a system in place?

Conservatives should want to save the money. Liberals should want the money out of the hands of the crooks so more money could go to the people that actually need it. Isn't that what we call a "no brainer"?

[xu95]

I like how madness started this conversation and then left it.

xu95

[madness31]

95, back just for you.

I like Glow's suggestion. It is crazy how the Dems fight to install all these programs and the Republicans just fight against them and no one works to improve their efficiency or curb the fraud. Some programs should be cut completely and others like Military need reduced dramatically. Medicare/Medicaid need adjusted to reduce future liabilities but also desparately need fraud prevention.

I hear all the arguments for raising taxes on various groups due to unfair benefits awarded them. It is crazy to encourage people to have children, not work, etc. The problem with all these things is that increasing taxes on these people or reducing/stopping unemployment benifits, etc will cause economic activity to go lower. The lower economic activity will make the expense cuts and higher tax rates less impactful. The government budget may benefit slightly or might be worse off depending on how bad the economy gets. Fairness is great but is it worth causing a depression? A depression is very very possible and almost guaranteed if you raise taxes on the middle class and below. Cutting government programs is already killing job growth. The country is in a bad place and there is only one group of people that can shoulder the burden. This is not about fairness but survival.

In addition to the fraud and efficiency mentioned above for dealing with budget problems, it is also necessary to streamline regulation. Some regulations need eliminated and others changed. I believe some regulation is necessary but believe other regulation does far more harm than good. Smart regulation can dramatically aid in job creation. It must be easy to understand and comply with. Small businesses don't have armies of lawyers and administrators to deal with complex regulations.

[GuyFawkes38]

I just finished watching an interesting Charlie Rose show (yeah, it's been an exciting Friday night). He had four economist on (the only one I recognized was Paul Krugman).

The subject of tax reform came up. All four economist believed that deductions need to be dramatically reduced to increase revenue, including the home mortgage deduction (although Krugman was more apathetic, noting that it's an important deduction for the middle class and that tax reform, in general, isn't very important).

Should donations to charities or the interest on your mortgage really be deductible?

Deductions are stupid. Keep it simple. All income should be taxed.

I'm a big fan of a VAT. European countries do it. And I think the word "VAT" sounds really cool.

[Strange Brew]

I just finished watching an interesting Charlie Rose show (yeah, it's been an exciting Friday night). He had four economist on (the only one I recognized was Paul Krugman).

The subject of tax reform came up. All four economist believed that deductions need to be dramatically reduced to increase revenue, including the home mortgage deduction (although Krugman was more apathetic, noting that it's an important deduction for the middle class and that tax reform, in general, isn't very important).

Should donations to charities or the interest on your mortgage really be deductible?

Deductions are stupid. Keep it simple. All income should be taxed.

I'm a big fan of a VAT. European countries do it. And I think the word "VAT" sounds really cool.

First Krugman is a hack unless he's speaking on his New New Trade theory. Second (to madness) its far beyond time to still believe in the keynesian notion that gov't spending can solve a bust. Yes, the economy will be hurt if we end some gov't spending but the reality is that the demand created by handouts or stimuli (or QE2) is not real but is in fact what should be called "the big gov't bubble". It will burst because it is not natural (market driven) demand.

On the question of taxes. I'd be for a VAT if the Fed were to eliminate income taxes. They will not, so I am against the VAT (however, the mktg of that name is pretty sweet).

Further, taxes ARE going to go up for everyone (not just for the top 1%. Period). The Fed gov't has spent soooooo much money (TARP, Stimulus, Omnibus, etc, etc) that we are ALL going to have to pay. They will officially go up or the Fed Reserve will print enough money to cover the debt thus weakening every dollar in our pockets, lowering our purchasing power, which has the same result of a tax i.e. gov't mandates something that causes we the people to have less.

If this country does not get its fiscal house in order soon then there is no doubt that the collapse is going to be epic. Snipe, save some room for Mrs. Brew and I in the bunker, the times are definately about to get interesting.


Just for the record:

http://images0.cafepress.com/image/34619750_125x125.png

[madness31]

Brew, not sure why you think I believe Government spending can solve economic problems. That is not even close to my position. The govrnment is able to soften the blow and/or delay economic catastrophy. It is not possible to argue against that because it has happened over and over again throughout history. Whether it is through tax cuts that stimulate consumer spending or business creation, government spending that directly saves/creates jobs, or interest rate decreases the economy has shown a positive response to these measures.

You are correct that the positive impact is only temporary and at the extreme (where we find ourselves now) the positive impacts are muted and eventually stop completely. Tax cuts typically lead to economic growth but also often lead to bigger government deficits. Increased government spending has similar impacts. In the short-term they seem to work but looking at them over the longer-term you realize they are not sustainable. Government debt eventually swallows an economy. Taxes can't go below 0 and neither can interest rates.

Keynesianism is completely misunderstood and never implemented correctly. The key to the theory is to run a surplus in good times which means cutting back government spending and then stepping in during downturns to soften the blow and aid the economy in a turn-around. I suspect if this was implemented correctly the US would have another century or more of stable finances.

It still does create artificial demand and prevents the natural cycle from working so eventually I expect things would still collapse. The big issue is the Fed as it helps create bubbles and preventing them from deflating is dangerous.

I am very much against government intervention in the economy. The Fed must be eliminated. That being said I do not approve of making false claims about either organization. The Fed has been great at pumping up artificial demand in the past but now that rates have bottomed they can only destroy the value of the currency by directly increasing the money supply (QE2 created stock and commodity inflation). The Government has also been great at either cutting taxes and/or increasing spending to create demand but now that the debt has reached unmanageable levels it will begin detracting from economic growth.

Japan experienced multiple decades of going in and out of recessions after their real estate and stock market bubbles popped. The US is now stuck in that same pattern. Several European countries are in the same predicament.

The Austrians are generally correct but they get some of the details wrong, or atleast their followers do. Just as Keynsian followers get many of the details wrong about what the actual theory was I'm sure the same is true of Austrians. I can't imagine an Austrian economist would argue government spending, tax cuts, or decreased interest rates wouldn't have a positive short-term economic impact but their followers often make this mistake.

[waggy]

G'damn governments.

Meredith Whitney: State finances are worse than estimated (http://finance.fortune.cnn.com/2011/06/06/meredith-whitney-state-finances-are-worse-than-estimated/)


The third and biggest problem, pension costs, both increases current cash expenses and artificially understates what the states should be spending today. Even by putting the minimum into their pension funds, they're still crowding out spending for everything else because the costs are rising so fast. Hence, it ensures that future tax increases and spending cuts will be far greater than advertised. The states are systematically underfunding their pensions. Today, they cover 77% of their future liabilities versus 103% in 2000. If they fully paid their annual pension costs, the states would need to increase spending by over $700 billion a year, or over 40% of their current outlays.

And those figures don't include future spending on health care costs, falling into a little-known category called OPEB or Other Post Employment Benefits. Most states simply pay these OPEB costs directly from revenues. No actual income-generating funds, accumulated for the future, back them in most states. New Jersey, New York, Connecticut and Illinois are all pay-as-you go states with totally unfunded OPEB liabilities. As those costs inevitably swell, they will apply even more pressure to state budgets.

Vid at the end talks about state workers retiring early to make sure they get theirs.

[smileyy]

I'd be interested in seeing the effects of ending the mortgage interest tax deducion on the housing market. My suspicion is that it would be a net-zero effect for homebuyers, but would affect the rest of the industry, by lowering housing prices, perhaps substantially.

[GuyFawkes38]

I'd be interested in seeing the effects of ending the mortgage interest tax deducion on the housing market. My suspicion is that it would be a net-zero effect for homebuyers, but would affect the rest of the industry, by lowering housing prices, perhaps substantially.

definitely. An article I linked to earlier this thread made that argument (I think the NYT article). The more constrained a housing market is, the more the mortgage interest deduction is a transfer from the buyer to the seller.

If you give consumers cash to only buy a fixed number of homes on sale, it doesn't help the consumers. It increases the price of the fixed number of homes on sale, benefiting the sellers.

[Kahns Krazy]

So ending the home mortgage interest deduction would effectively reduce wealth from home owners and transfer it to non home owners? Why is this a good idea?

[GuyFawkes38]

So ending the home mortgage interest deduction would effectively reduce wealth from home owners and transfer it to non home owners? Why is this a good idea?

I think it's fair.

But yeah, ending the deduction would be a tough feat because homeowners have a lot of political capital. I imagine organizations like AARP strongly support the deduction.

[Kahns Krazy]

I think it's fair.

But yeah, ending the deduction would be a tough feat because homeowners have a lot of political capital. I imagine organizations like AARP strongly support the deduction.

You make it sound like there is something inherently inequitable about the mortgage interest deduction. I've pointed out several flaws in your logic, but you've never really explained your position. If it's just that you don't own a house yet and you want a cheaper house, that's fine, but fess up.

Eliminating a deduction does not somehow magically generate wealth. You're selectively increasing taxes on certain individuals.

[GuyFawkes38]

You make it sound like there is something inherently inequitable about the mortgage interest deduction. I've pointed out several flaws in your logic, but you've never really explained your position. If it's just that you don't own a house yet and you want a cheaper house, that's fine, but fess up.

Eliminating a deduction does not somehow magically generate wealth. You're selectively increasing taxes on certain individuals.

IMHO, deductions and credits should be abolished and tax rates lowered. All income should be taxed.

Kahns, you seem to suggest that there is no such thing as a bad or bogus deduction. You argue that they exist and therefore they are legitimate. Not long ago, one could deduct interest payments from their credit card debt. Is that a worthwhile deduction? Should it still be in place?

[Kahns Krazy]

IMHO, deductions and credits should be abolished and tax rates lowered. All income should be taxed.

Kahns, you seem to suggest that there is no such thing as a bad or bogus deduction. You argue that they exist and therefore they are legitimate. Not long ago, one could deduct interest payments from their credit card debt. Is that a worthwhile deduction? Should it still be in place?

I made no such suggestion. I've refuted your baseless arguments that the MID is regressive. I even pointed out a couple of other deductions that I question the value of. Don't try to distract from your weak-ass argument by changing my words.

[Kahns Krazy]

Not long ago, one could deduct interest payments from their credit card debt. Is that a worthwhile deduction? Should it still be in place?

I don't think unsecured consumer debt should be subsidized. In an era with tighter restrictions on income and debt ratios, I wouldn't be so against it. Encouraging some level of manageable debt spending is not a bad policy.

Overextension of credit has been the problem, not the tax deduction.

[madness31]

Somewhat relevant to this topic, I found the below information:

[Q: If we redefined GDP to EXCLUDE all government spending, because it is all "recycled" earnings of the private sector, how does the whole question of recovery vs. recession/depression look? I suspect this is one way to reconcile the fact that the financial community says we are in recovery, but Main Street says the opposite.

A: the answer is simple. Take out the feds -- who are redistributing wealth, not creating it -- and US GDP growth was about zero for the last decade.

There. That's a trend. Here we are in the 21st century. With all that technology. And all that money. And all those sophisticated Wall Street geniuses allocating capital like nobody's business. And what do we get? Growth at about the same rate as during the Middle Ages.]

To me this indicates just how difficult it will be to grow the economy while cutting government spending. Recent employment reports have further supported this theory as the private sector has added jobs while the public sector has been cutting. The net effect is very slow job growth.

If you add middle class tax increases to the equation, the decreased demand will further hurt job growth.

No doubt government spending must be cut and measures need to be taken to shore-up government finances but the end result is going to be a slow growth to declining economy. This is not a Partisan issue as the inserted data about the past decade indicates.

[bobbiemcgee]

Public sector isn't cutting that much. Anybody remotely close to retirement is getting out to collect their pension. Early retirement up 96% in Wisconsin. Go figure.

[madness31]

Bobbie, you are correct that the public sector isn't cutting in mass yet but the employment reports show job losses at the government level each of the last several months. Given the fiscal year end, bigger cuts could be coming in July and after. Regardless of how fast the cuts come, the government is still a drag on employment. When you consider that government employment has increased year after year for decades and is suddenly cutting jobs, even a slow decline in employment will be felt.

[GuyFawkes38]

Interesting story on the home mortgage interest deduction (listen to the story....the written explanation is weak). We need some really smart people to frame the discourse on the issue to get rid of it.

http://www.npr.org/blogs/money/2012/10/19/163243687/watch-our-fake-presidential-candidates-first-real-ad

This is not a bad add.
http://youtu.be/1VtnjRdfo1Y

[waggy]

Losing the mortgage interest deduction would be the final straw for me. Just sayin.

[LA Muskie]

The mortgage interest deduction is a subsidy. It should be gone. But now is not the time to yank it. Doing so now would crater the housing market, and make the depression of the last 5 years seem like boom years.

[Kahns Krazy]

The mortgage interest deduction is a subsidy. It should be gone. But now is not the time to yank it. Doing so now would crater the housing market, and make the depression of the last 5 years seem like boom years.

I don't know how to respond other than to call this stupid. Home ownership creates more stable neighborhoods, increases property values which increase tax revenues, and is directly correlated with lower crime rates, reducing the overal social services liability of the state. There is a public interest in creating stable neighborhoods. That is why there is a mortgage interest deduction.

Moreover, never in the history of this country has the income spent on mortgage interest been taxable. What is the logic behind making it taxable now?

[Strange Brew]

I don't know how to respond other than to call this stupid. Home ownership creates more stable neighborhoods, increases property values which increase tax revenues, and is directly correlated with lower crime rates, reducing the overal social services liability of the state. There is a public interest in creating stable neighborhoods. That is why there is a mortgage interest deduction.

Moreover, never in the history of this country has the income spent on mortgage interest been taxable. What is the logic behind making it taxable now?

haha true Kahns, love that private property attacking silly argument. The gov't taking less from a property owner is not a subsidy........Jeez, that's as stupid as saying that tax cuts equal gov't spending.

[chico]

The mortgage interest deduction is a subsidy.

Couldn't we say that about most tax deductions we get to take? Dependent children? Charitable giving?

[ArizonaXUGrad]

BJF123 - Syndicated columnist and George Mason University economics professor Walter Williams had an interesting column a few months ago in which he claimed that taxing all incomes over $250,000 at 100%, taxing all corporate profits at 100%, and taking 100% of the wealth from every US billionaire would not fund the current level of government spending for even one year. I'll trust that he's run the numbers and his claims are accurate. We don't have a revenue problem, we have a spending problem.

I would quote but for whatever reason the site isn't working today through my browser.

I am pretty sure I already proved this economist wrong.

Total Budget for 2011 was $3.6T
2011 - Total wealth of all Billionaires was $1.3T
Best I could fine was $200k+ from the IRS for 2009 was $1.9T - they didn't have 2011 and didn't have $250k and up.
I did some quick addition adding up just the Fortune 100 companies a few days in my first post and I think it came up to about $500B. If you back off tad for that extra $50k and add in Corporate profits for the lower 400 in the Fortune 500 I think you easily hit $3.6T.

If this guy can't use google and a ten key I am not going to buy into anything he says.

[boozehound]

BJF123 - Syndicated columnist and George Mason University economics professor Walter Williams had an interesting column a few months ago in which he claimed that taxing all incomes over $250,000 at 100%, taxing all corporate profits at 100%, and taking 100% of the wealth from every US billionaire would not fund the current level of government spending for even one year. I'll trust that he's run the numbers and his claims are accurate. We don't have a revenue problem, we have a spending problem.

I would quote but for whatever reason the site isn't working today through my browser.

I am pretty sure I already proved this economist wrong.

Total Budget for 2011 was $3.6T
2011 - Total wealth of all Billionaires was $1.3T
Best I could fine was $200k+ from the IRS for 2009 was $1.9T - they didn't have 2011 and didn't have $250k and up.
I did some quick addition adding up just the Fortune 100 companies a few days in my first post and I think it came up to about $500B. If you back off tad for that extra $50k and add in Corporate profits for the lower 400 in the Fortune 500 I think you easily hit $3.6T.

If this guy can't use google and a ten key I am not going to buy into anything he says.

That may be, but it doesn't change the fact that the core point is correct: We have a spending problem much more than we have a revenue problem. The degree of taxation that would have to occur to even come close to balancing the budget without major spending cuts would absolutely destroy the economy. Spending is completely out of control.

[bjf123]

There's a link to his column in my post back on the first page. Mr. Williams lays out his math. Seems to make sense to me.


Sent from my iPhone using Tapatalk

[ArizonaXUGrad]

That may be, but it doesn't change the fact that the core point is correct: We have a spending problem much more than we have a revenue problem. The degree of taxation that would have to occur to even come close to balancing the budget without major spending cuts would absolutely destroy the economy. Spending is completely out of control.

I also already came up with a great and easy plan to cut 67% of the budget deficit.

Cut 25% of defense
Double the effective tax rate of the top 1% (everyone making over about $390k) This is not a terrible increase for them and is still just 2/3rds of the upper rate from the 1950s.
Attack all Medicare/Medicaid fraud which is estimated at 10%.

I did the math and that amounted to about $870B. The deficit per year is $1.3T. $430B is still left to cut but that is a whole lot easier to get to than $1.3T and my cuts have yet to affect those that need our help most.

What absolutely infuriates me about this country is the overall greed of some of the people in it. How, yes we need to cut government spending and increase it's revenues, but how some of the most vocal immediately move to cutting the programs that helps our most needy first instead of cutting the most obvious.

[GoMuskies]

What absolutely infuriates me about this country is the overall greed of some of the people in it. How, yes we need to cut government spending and increase it's revenues, but how some of the most vocal immediately move to cutting the programs that helps our most needy first instead of cutting the most obvious.

That's all sounds very noble. But if you take away the incentive for the country's most productive people to continue being productive, you have to see how that is going to be a big problem for the needy, too, right?

[chico]

I also already came up with a great and easy plan to cut 67% of the budget deficit.

Cut 25% of defense
Double the effective tax rate of the top 1% (everyone making over about $390k) This is not a terrible increase for them and is still just 2/3rds of the upper rate from the 1950s.
Attack all Medicare/Medicaid fraud which is estimated at 10%.

I did the math and that amounted to about $870B. The deficit per year is $1.3T. $430B is still left to cut but that is a whole lot easier to get to than $1.3T and my cuts have yet to affect those that need our help most.

What absolutely infuriates me about this country is the overall greed of some of the people in it. How, yes we need to cut government spending and increase it's revenues, but how some of the most vocal immediately move to cutting the programs that helps our most needy first instead of cutting the most obvious.

I'm sure you realize that cutting defense 25% will create many more needy people.

My point is not to leave defense alone, but rather that everything, and I mean everything, should be on the table. I don't have any magic formula for saying what should and should not be cut, and I'm not going to throw out arbitrary numbers. But there should be some sort of criteria who knows, maybe something like look at how much the program helps those who really need help vs. how much the program hurts those who cannot afford to be hurt.

[Kahns Krazy]

BJF123 - Syndicated columnist and George Mason University economics professor Walter Williams had an interesting column a few months ago in which he claimed that taxing all incomes over $250,000 at 100%, taxing all corporate profits at 100%, and taking 100% of the wealth from every US billionaire would not fund the current level of government spending for even one year. I'll trust that he's run the numbers and his claims are accurate. We don't have a revenue problem, we have a spending problem.

I would quote but for whatever reason the site isn't working today through my browser.

I am pretty sure I already proved this economist wrong.

Total Budget for 2011 was $3.6T
2011 - Total wealth of all Billionaires was $1.3T
Best I could fine was $200k+ from the IRS for 2009 was $1.9T - they didn't have 2011 and didn't have $250k and up.
I did some quick addition adding up just the Fortune 100 companies a few days in my first post and I think it came up to about $500B. If you back off tad for that extra $50k and add in Corporate profits for the lower 400 in the Fortune 500 I think you easily hit $3.6T.

If this guy can't use google and a ten key I am not going to buy into anything he says.

There may be a huge gap between 'taxing all incomes over $250,000' and the IRS > $200,000 number. I think the IRS number is households, not individuals. The $1.9T number may easily be over twice what Walter was referring to.

[ArizonaXUGrad]

I'm sure you realize that cutting defense 25% will create many more needy people.

My point is not to leave defense alone, but rather that everything, and I mean everything, should be on the table. I don't have any magic formula for saying what should and should not be cut, and I'm not going to throw out arbitrary numbers. But there should be some sort of criteria who knows, maybe something like look at how much the program helps those who really need help vs. how much the program hurts those who cannot afford to be hurt.

I bet you could cut 25% out of the military budget by merely cutting wasteful programs. I bet you could reduce personnel by merely not filling retired positions.

[ArizonaXUGrad]

There may be a huge gap between 'taxing all incomes over $250,000' and the IRS > $200,000 number. I think the IRS number is households, not individuals. The $1.9T number may easily be over twice what Walter was referring to.

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

There are only 1.3M households with income levels between 200k and 250k per the 2005 Census data. I bet that number is a lot lower. Assuming they make exactly $250k that is $331B (realistically less). That $1.9T figure just became $1.6T and merely makes my margin of error a bit tighter when adding the true profits from all fortune 500 companies.

I am really criticizing the economist...google is his friend and he should use it.

[waggy]

I am really criticizing the economist...google is his friend and he should use it.

The point he makes, that it's not possible for the gooberment to tax their way out of this mess, is 1000% accurate. You are dense.

I think the first people to have their money taken should be those who are so eager to take others...

[GuyFawkes38]

Moreover, never in the history of this country has the income spent on mortgage interest been taxable. What is the logic behind making it taxable now?

well, the government needs to collect more revenue somehow.

I don't think the deduction will ever be thrown out. That would be too unpopular. Sounds like deductions will be capped, which would limit the ability to take advantage of the mortgage interest deduction.

[chico]

I bet you could cut 25% out of the military budget by merely cutting wasteful programs. I bet you could reduce personnel by merely not filling retired positions.

I'd probably take that bet. There is waste, but a quarter of the budget is waste and early retirement? You need some actual data to back your assertion. Simply throwing numbers out there makes no sense.

[RealDeal]

http://www.youtube.com/watch?v=HQiELpyBIrM&feature=share

[ArizonaXUGrad]

The point he makes, that it's not possible for the gooberment to tax their way out of this mess, is 1000% accurate. You are dense.

I think the first people to have their money taken should be those who are so eager to take others...

Since we are name calling I will call you the pot calling the kettle black. Read my posts, I outlined a clear $870B quick and easy plan to cut spending and raise taxes that puts out within $430B of a balanced budget. That is closer than anyone including the candidates and people on this board have gotten.

Show me plans people, show me dollars, if not GTFO.

[ArizonaXUGrad]

I'd probably take that bet. There is waste, but a quarter of the budget is waste and early retirement? You need some actual data to back your assertion. Simply throwing numbers out there makes no sense.

Once we ditch Afghanistan we will stop spending about $70B a year on that. How many times does Congress hear about $20M contracts with vendors that end up costing $40M or more, no bid contracts like Halliburton, the money is there to be cut and saved. We can stop allowing the government to be used as a corporate cash cow. I just read an article how the oil and gas industry cleaned up with $400B+ in subsidies. This when oil and gas is cleaning up.

My point is that if you focus on cutting wasteful defense, raising the taxes on the top 1% to levels that are still just 2/3rds the highest level in the last 60 years for them, and cut Medicare/Medicaid waste and fraud, you have just gotten us close to 70% of the way there. Cut out some of those dirty energy subsidies and sure some of those clean energy ones and we might just close that deficit after all. All that without touching the ways this country cares for it's citizens that need it most.

What absolutely grates me is when people focus on entitlements as the "first" thing to cut instead of cutting the costs of those that can and raising the taxes of those that can pay.

Honestly, if I am in the top 1% and get my taxes doubled I would still be jumping for joy at being in the top 1%.

[GoMuskies]

What absolutely grates me is when people focus on entitlements as the "first" thing to cut instead of cutting the costs of those that can and raising the taxes of those that can pay.

Honestly, if I am in the top 1% and get my taxes doubled I would still be jumping for joy at being in the top 1%.

Again, you have to agree that it's dangerous to mess too much with the incentives of the most productive members of society to keep being productive, right? No one is saying (or at least very few people are saying) some increase in taxes on the top 1% isn't part of the solution. It's just not close to being enough, and it cannot be too extreme.

We don't want the top 1% jumping for joy. We want them to get to work on trying to get into the .5%.

[ArizonaXUGrad]

Again, you have to agree that it's dangerous to mess too much with the incentives of the most productive members of society to keep being productive, right? No one is saying (or at least very few people are saying) some increase in taxes on the top 1% isn't part of the solution. It's just not close to being enough, and it cannot be too extreme.

We don't want the top 1% jumping for joy. We want them to get to work on trying to get into the .5%.

They will do that anyway, do you really think that if the top 1% gets their taxes doubled they will just give up and become homeless?

[Kahns Krazy]

I bet you could cut 25% out of the military budget by merely cutting wasteful programs. I bet you could reduce personnel by merely not filling retired positions.

Where does the money in "wasteful programs" go? Are we digging a hole and burying it? Isn't not filling retired positions a net job loss? Where are those people going to find jobs?

[GoMuskies]

They will do that anyway, do you really think that if the top 1% gets their taxes doubled they will just give up and become homeless?

Of course not. They're in no danger of becoming homeless. But if they don't have any incentive to make MORE money, some of their poorer workers/potential workers certainly may find themselves homeless.

[kmcrawfo]

Since we are name calling I will call you the pot calling the kettle black. Read my posts, I outlined a clear $870B quick and easy plan to cut spending and raise taxes that puts out within $430B of a balanced budget. That is closer than anyone including the candidates and people on this board have gotten.

Show me plans people, show me dollars, if not GTFO.

There should be no tax increases until the government shows responsibility with the $$$ they already have. This country has primarily a spending problem. It can be debated if there is a revenue problem or not.

Let's say you make $30,000 per year, but spend $60,000 per year. Do you have a spending problem or a revenue problem. Both... Maybe. However, the primary problem for such a person is they are spending beyond their means. They need to get rid of their cell phone, stop going out to eat, drop cable TV etc. Then, after the spending cuts, if there is still a gap in expense vs. revenue that person needs to fix their revenue problem and go out and start delivering pizzas at night, etc.

The problem is our government has no accountability. The government only has 3 roles:
1. Provide hard infrastructure for society (roads, bridges, certain buildings, fire department,etc.)
2. Provide lawful oversight and thus prevent anarchy (police, legal system, etc.)
3. Protect its citizens (military)

Beyond those 3 primary roles, all other items are not roles the government should primarily be providing. Other services are the equivalent of the cell phone, eating out, etc. If there is not enough money, they need to be cut. There is plenty enough money/taxes for items 1/2/3.

Once the government shows responsibility to clean of there mess of waste/fraud/abuse/etc, I will be willing to provide more revenue to it. Until then, they can GTFO.

That is the solution. Cut, cut, cut. Cut entitlements as they are the biggest leach on society. Then, after we are lean if more funds are really needed, taxes should increase.

[xu95]

The point he makes, that it's not possible for the gooberment to tax their way out of this mess, is 1000% accurate. You are dense.

I think the first people to have their money taken should be those who are so eager to take others...

The problem is the people saying a certain tax group should be taxed more are saying it because they will never get into that tax group.

[kmcrawfo]

Of course not. They're in no danger of becoming homeless. But if they don't have any incentive to make MORE money, some of their poorer workers/potential workers certainly may find themselves homeless.

There is a point where a progressive tax system removes the incentive to work and earn. For me a bump of around 7-8 more percent from what I currently pay would remove the incentive as the increased burden of managing the additional resources/employees at that level would be greater than the rewards obtained. So... If my income in excess of $1,000,000 progressively taxed at a rate 7-8% higher then the income below $1,000,000. I would simply cut back on staff and work less until I hit that cap.

You are right the 1% will be fine at a "cap" of $1,000,000. The losers are the staff/employees who don't get hired and the gov't gets less of an tax revenue due to that 1% individual not working to bring in the extra money because it is taxed too highly.

Ronald Reagan once told a story that when we has an actor and tax rates were so high. Actors would say to only make 1-2 movies per year because the revenue from the 3rd movie was taxed at 90% at that time. He said why on earth would I go through all that work to only take home 10% (before other taxes). That principle still hold true.

[ArizonaXUGrad]

There is a point where a progressive tax system removes the incentive to work and earn. For me a bump of around 7-8 more percent from what I currently pay would remove the incentive as the increased burden of managing the additional resources/employees at that level would be greater than the rewards obtained. So... If my income in excess of $1,000,000 progressively taxed at a rate 7-8% higher then the income below $1,000,000. I would simply cut back on staff and work less until I hit that cap.

You are right the 1% will be fine at a "cap" of $1,000,000. The losers are the staff/employees who don't get hired and the gov't gets less of an tax revenue due to that 1% individual not working to bring in the extra money because it is taxed too highly.

Ronald Reagan once told a story that when we has an actor and tax rates were so high. Actors would say to only make 1-2 movies per year because the revenue from the 3rd movie was taxed at 90% at that time. He said why on earth would I go through all that work to only take home 10% (before other taxes). That principle still hold true.

The Nation's debt level also drastically increased during his presidency so take what he says with a grain of salt.

[waggy]

Since we are name calling I will call you the pot calling the kettle black. Read my posts, I outlined a clear $870B quick and easy plan to cut spending and raise taxes that puts out within $430B of a balanced budget. That is closer than anyone including the candidates and people on this board have gotten.

Show me plans people, show me dollars, if not GTFO.

You couldn't even prove that Walter Williams was definitely wrong. Never mind that his projection of stealing was completely outrageous.


BJF123 - Syndicated columnist and George Mason University economics professor Walter Williams had an interesting column a few months ago in which he claimed that taxing all incomes over $250,000 at 100%, taxing all corporate profits at 100%, and taking 100% of the wealth from every US billionaire would not fund the current level of government spending for even one year. I'll trust that he's run the numbers and his claims are accurate. We don't have a revenue problem, we have a spending problem.

I would quote but for whatever reason the site isn't working today through my browser.

I am pretty sure I already proved this economist wrong.

Total Budget for 2011 was $3.6T
2011 - Total wealth of all Billionaires was $1.3T
Best I could fine was $200k+ from the IRS for 2009 was $1.9T - they didn't have 2011 and didn't have $250k and up.
I did some quick addition adding up just the Fortune 100 companies a few days in my first post and I think it came up to about $500B. If you back off tad for that extra $50k and add in Corporate profits for the lower 400 in the Fortune 500 I think you easily hit $3.6T.

If this guy can't use google and a ten key I am not going to buy into anything he says.

Below you throw more shit at the wall hoping something sticks. But even with your little fantasyland stealing all the money in the country projection YOU'RE STILL RUNNING A DEFICIT. This is where I would normally, fittingly, actually call you a name.


I also already came up with a great and easy plan to cut 67% of the budget deficit.

Cut 25% of defense
Double the effective tax rate of the top 1% (everyone making over about $390k) This is not a terrible increase for them and is still just 2/3rds of the upper rate from the 1950s.
Attack all Medicare/Medicaid fraud which is estimated at 10%.

I did the math and that amounted to about $870B. The deficit per year is $1.3T. $430B is still left to cut but that is a whole lot easier to get to than $1.3T and my cuts have yet to affect those that need our help most.

What absolutely infuriates me about this country is the overall greed of some of the people in it. How, yes we need to cut government spending and increase it's revenues, but how some of the most vocal immediately move to cutting the programs that helps our most needy first instead of cutting the most obvious.

[ArizonaXUGrad]

You couldn't even prove that Walter Williams was definitely wrong. Never mind that his projection of stealing was completely outrageous.



Below you throw more shit at the wall hoping something sticks. But even with your little fantasyland stealing all the money in the country projection YOU'RE STILL RUNNING A DEFICIT. This is where I would normally, fittingly, actually call you a name.

All of my data was pulled from Wikipedia, the IRS, the Tax Policy Center, and Forbes list of Fortune 500 companies and their corresponding profits. Williams is definitely wrong as it adds right up to within an immaterial enough difference to not have to add this up to the penny. Shocking as it might seem, economists are often wrong.

How is advocating cuts in military, cutting wasteful medicare/medicaid fraud which is widely accepted at 10% and doubling the tax rate for the top 1% which comes straight from IRS data "throwing shit at a wall"?

I am clearly outlining numbers that get us down to $430B within a balanced budget which is far better than any candidate has done in the past 12 years much less you. It does so without touching entitlements. That gets us close, now you have go in and cut out pork, unnecessary corporate subsidies, possible retirement age raise, then you can go in and cut entitlements as necessary to create a real surplus that can be applied to debt. If this involves a middle-class tax increase then great, but this needs to be done in an order that makes sense for the "majority" of Americans not just a few.

[GoMuskies]

In your analysis of increased revenue, how did you account for the reduced income of the 1% if you doubled their tax rate (which is apparently not a terrible increase for them)?

[X-band '01]

There should be no tax increases until the government shows responsibility with the $$$ they already have. This country has primarily a spending problem. It can be debated if there is a revenue problem or not.

Let's say you make $30,000 per year, but spend $60,000 per year. Do you have a spending problem or a revenue problem. Both... Maybe. However, the primary problem for such a person is they are spending beyond their means. They need to get rid of their Obama phone, stop going out to eat, drop cable TV etc. Then, after the spending cuts, if there is still a gap in expense vs. revenue that person needs to fix their revenue problem and go out and start delivering pizzas at night, etc.

The problem is our government has no accountability. The government only has 3 roles:
1. Provide hard infrastructure for society (roads, bridges, certain buildings, fire department,etc.)
2. Provide lawful oversight and thus prevent anarchy (police, legal system, etc.)
3. Protect its citizens (military)

Beyond those 3 primary roles, all other items are not roles the government should primarily be providing. Other services are the equivalent of the cell phone, eating out, etc. If there is not enough money, they need to be cut. There is plenty enough money/taxes for items 1/2/3.

Once the government shows responsibility to clean of there mess of waste/fraud/abuse/etc, I will be willing to provide more revenue to it. Until then, they can GTFO.

That is the solution. Cut, cut, cut. Cut entitlements as they are the biggest leach on society. Then, after we are lean if more funds are really needed, taxes should increase.

Made one small correction for you, but I absolutely agree with this line of thinking. My biggest fear of taxes being increased (while it's appearing to be more and more of a necessay evil for ALL income brackets down the road) is that Congress will see it as a green light to keep spending like drunken sailors and continue to charge the national American Express card.

[waggy]

All of my data was pulled from Wikipedia, the IRS, the Tax Policy Center, and Forbes list of Fortune 500 companies and their corresponding profits. Williams is definitely wrong as it adds right up to within an immaterial enough difference to not have to add this up to the penny.

The premise was preposterous at its outset. Curious that we don't have to add this to the penny, yet his calc wasn't accurate by your estimation.


How is advocating cuts in military, cutting wasteful medicare/medicaid fraud which is widely accepted at 10% and doubling the tax rate for the top 1% which comes straight from IRS data "throwing shit at a wall"?

Meant to quote this post instead.


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

There are only 1.3M households with income levels between 200k and 250k per the 2005 Census data. I bet that number is a lot lower. Assuming they make exactly $250k that is $331B (realistically less). That $1.9T figure just became $1.6T and merely makes my margin of error a bit tighter when adding the true profits from all fortune 500 companies.

YOU'RE STILL RUNNING A DEFICIT, MR. FANTASYLAND.


I am clearly outlining numbers that get us down to $430B within a balanced budget which is far better than any candidate has done in the past 12 years much less you. It does so without touching entitlements. That gets us close, now you have go in and cut out pork, unnecessary corporate subsidies, possible retirement age raise, then you can go in and cut entitlements as necessary to create a real surplus that can be applied to debt. If this involves a middle-class tax increase then great, but this needs to be done in an order that makes sense for the "majority" of Americans not just a few.

Raise the retirement age! Middle class tax incease!

[bjf123]

The Nation's debt level also drastically increased during his presidency so take what he says with a grain of salt.

If i remember the numbers correctly, that's because for every $1.00 of additional revenue his tax cuts generated, the Democratically controlled Congress spent something like an additional $1.53. When the Republicans control Congress, they're just as bad.

You keep saying Williams' math is wrong. What specifically is incorrect?

As for cutting defense spending by 25% and eliminating the Medicare fraud and abuse, that's easier said than done. I spent a few years as defense subcontractor working on a pilot program to identify and recover overpayments and other payment errors made by a particular area of spending, nothing weapons or personnel related. I can tell you from first hand experience that they are more concerned with protecting the bureaucracy than they are with saving taxpayer funds. We would find overpayments and then be told not to go after collecting them because it might upset the vendor (who got paid too much), it might make the department that should have caught the original error look bad, or even if we did collect the funds, they didn't know what to do with them because they were from a prior budget year and those dollars don't exist in the current budget year. Very frustrating.

My brother-in-law spent his entire career working for a non defense federal agency. He retired a number of years ago and the stories he tells of the waste and insane policies are maddening. There is absolutely no incentive to save money. In fact, it is looked down upon if you don't spend every dime allocated to your department. He would be told to go out and buy equipment, supplies, etc at the end of the fiscal year even though he didn't need any if it. The correct decision would be to save the taxpayer money, but that's not how government works.


Sent from my iPhone using Tapatalk

[ArizonaXUGrad]

The premise was preposterous at its outset. Curious that we don't have to add this to the penny, yet his calc wasn't accurate by your estimation.



Meant to quote this post instead.



YOU'RE STILL RUNNING A DEFICIT, MR. FANTASYLAND.



Raise the retirement age! Middle class tax incease!

I am rescinding all my posts regarding raising the raising of the retirement age.

Second, yes I am $430B short after my quick and easy method. Cutting $1.3T or whatever it was since I have forgotten is not easy. If you are at the point of being forced to make the hard decisions at $1.3T to cut you will never get there, but if you are at $430B and are making hard choices you have a shot.

[ArizonaXUGrad]

If i remember the numbers correctly, that's because for every $1.00 of additional revenue his tax cuts generated, the Democratically controlled Congress spent something like an additional $1.53. When the Republicans control Congress, they're just as bad.

You keep saying Williams' math is wrong. What specifically is incorrect?

As for cutting defense spending by 25% and eliminating the Medicare fraud and abuse, that's easier said than done. I spent a few years as defense subcontractor working on a pilot program to identify and recover overpayments and other payment errors made by a particular area of spending, nothing weapons or personnel related. I can tell you from first hand experience that they are more concerned with protecting the bureaucracy than they are with saving taxpayer funds. We would find overpayments and then be told not to go after collecting them because it might upset the vendor (who got paid too much), it might make the department that should have caught the original error look bad, or even if we did collect the funds, they didn't know what to do with them because they were from a prior budget year and those dollars don't exist in the current budget year. Very frustrating.

My brother-in-law spent his entire career working for a non defense federal agency. He retired a number of years ago and the stories he tells of the waste and insane policies are maddening. There is absolutely no incentive to save money. In fact, it is looked down upon if you don't spend every dime allocated to your department. He would be told to go out and buy equipment, supplies, etc at the end of the fiscal year even though he didn't need any if it. The correct decision would be to save the taxpayer money, but that's not how government works.


Sent from my iPhone using Tapatalk

I thought the guy said you could tax at 100% of Fortune 500 corps, tax 100% the top 1%, and all the wealth of each billionaire and not come close to paying the expenditures of the government for one year. I said not only do you come close but most likely it would pay it for one year.

I am not saying its right, I am just saying the guy made a bold statement that is undoubtedly false.

I had a pass this weekend with the wife out with her mom one day and friends the next and instead of beering it up with my friends I watched crappy horror movies, documentaries, and read some resource material regarding this very topic amongst other things.

One was about Milton Friedman and his economic beliefs. I was shocked how they just don't stand up anymore. He really pounds the idea that the average American worker makes more than it ever has in history but fails to consider that it is actually less inflation adjusted dollars now than just 20 years ago.

I also caught two documentaries on the Koch brothers and their company. I had no idea their dad made his seed money for his American corporation in the Soviet Union working for Stalin. That was pretty intense. I also didn't realize how many think tanks they fund, how they dictate the principles of said think tanks, and how their talking points are read near word for word by all those they fund including both politicians and employees of those think tanks.

I also had no idea they provided the initial seed money for several political groups that eventually funded the tea party. I had an "oh sh&t" moment thinking where the hell have I been all this time. I now find it amusing when I hear Tea Party people talk about how they aren't Corporate funded.

[Kahns Krazy]

All of my data was pulled from Wikipedia, the IRS, the Tax Policy Center, and Forbes list of Fortune 500 companies and their corresponding profits. Williams is definitely wrong as it adds right up to within an immaterial enough difference to not have to add this up to the penny. Shocking as it might seem, economists are often wrong.

How is advocating cuts in military, cutting wasteful medicare/medicaid fraud which is widely accepted at 10% and doubling the tax rate for the top 1% which comes straight from IRS data "throwing shit at a wall"?

I am clearly outlining numbers that get us down to $430B within a balanced budget which is far better than any candidate has done in the past 12 years much less you. It does so without touching entitlements. That gets us close, now you have go in and cut out pork, unnecessary corporate subsidies, possible retirement age raise, then you can go in and cut entitlements as necessary to create a real surplus that can be applied to debt. If this involves a middle-class tax increase then great, but this needs to be done in an order that makes sense for the "majority" of Americans not just a few.

I would be all for doubling the tax rate for the top 1% if we also slashed the benefits for the bottom 1%. If you are in the bottom 1%, you are not eligible for an obama phone, any cash tax credit, any self directed voucher program, etc. If you are in the bottom 1% you live in a publicly owned boarding house and you eat the government cheese. No food stamps to sell, nothing. You will have the basic human needs met for you, but you will not get a dime to put in your pocket until you make some effort to get out of the bottom 1%.

Once we open the dialogue about how ridiculous our benefit package is to the laziest of the lazy, then I'll be happy to consider penalties against the most successful of the hard working. Until then, arbitrariliy taking property away from one class of citizen seems decidedly un-American.

[XUglow]

...do you really think that if the top 1% gets their taxes doubled they will just give up and become homeless?

Homeless? The government doesn't tax wealth. They tax income. For a small business, income may be cash, but it also may be inventory. The government, however, wants payment in cash regardless of how you acquired your income.

If net income taxes were doubled, it would stress small business owners beyond belief. I cannot imagine how you would handle your working capital with that kind of tax burden. If you are going to pull that much money out of a business every year to pay taxes, you won't have much of a business. I imagine that many owners would have to close shop. So, yes, the correct answer is that many of them would just give up.

[ArizonaXUGrad]

Homeless? The government doesn't tax wealth. They tax income. For a small business, income may be cash, but it also may be inventory. The government, however, wants payment in cash regardless of how you acquired your income.

If net income taxes were doubled, it would stress small business owners beyond belief. I cannot imagine how you would handle your working capital with that kind of tax burden. If you are going to pull that much money out of a business every year to pay taxes, you won't have much of a business. I imagine that many owners would have to close shop. So, yes, the correct answer is that many of them would just give up.

All businesses are taxed at the end of the year separately on how much inventory they have on hand. It's taxed at a separate rate and paid at the state level not federal I believe.

Also, small businesses pay taxes on profits not revenue and often times those profits are calculated after you have paid a reasonable salary to yourself (if incorporated). If a it's a partnership, that is a whole different story. As long as business expenses are 'ordinary and necessary' to your business they are deductible. If your small business owner wants to expand or hire new employees that new expense is going to be deductible on his/her next return. Doubling the tax won't have that kind of affect on their business.

It will, however, double taxes on small business owners who have profits over $390k and will only affect income that is going to their bank account and not affect anything in business reinvestment or expansion.

[ArizonaXUGrad]

I would be all for doubling the tax rate for the top 1% if we also slashed the benefits for the bottom 1%. If you are in the bottom 1%, you are not eligible for an obama phone, any cash tax credit, any self directed voucher program, etc. If you are in the bottom 1% you live in a publicly owned boarding house and you eat the government cheese. No food stamps to sell, nothing. You will have the basic human needs met for you, but you will not get a dime to put in your pocket until you make some effort to get out of the bottom 1%.

Once we open the dialogue about how ridiculous our benefit package is to the laziest of the lazy, then I'll be happy to consider penalties against the most successful of the hard working. Until then, arbitrariliy taking property away from one class of citizen seems decidedly un-American.

The problem here is that not all of the bottom 1% is lazy. Some and probably most have just had extreme bad luck, health problems, job loss, death in the family and corresponding loss of income. What do you say to those people? Do you just say good luck and kick them to the curb and hope they find a soup kitchen?

What I am offering here is instead of cutting the help of those that need it we should tax the income from those that don't need it as much. So what if the upper 1% can't live in that 3500 sq.ft. mc'mansion and has to downsize to a 2500 sq.ft. house. If that is me and it means 10 people get food stamps and healthcare then I am all for it. The top 1% isn't going broke with this, they just won't be able to get that 5th car or 6th bedroom or whatever other luxury.

[XUglow]

It will, however, double taxes on small business owners who have profits over $390k and will only affect income that is going to their bank account and not affect anything in business reinvestment or expansion.

LOL. Wow. Double Wow.

If my inventory goes from $500K to $890K, and my bank account is flat, that is $390K in increased assets. That is income. How do you not know that? Assets are assets when you are dealing with an S-Corp.

[bjf123]

I thought the guy said you could tax at 100% of Fortune 500 corps, tax 100% the top 1%, and all the wealth of each billionaire and not come close to paying the expenditures of the government for one year. I said not only do you come close but most likely it would pay it for one year.

I am not saying its right, I am just saying the guy made a bold statement that is undoubtedly false.
If you'll read his article again, you'll see he spells out the annual government spending and then calculates the additional revenue from taxing the Fortune 500 at 100%, taxing at 100% all personal incomes over $250,000, and taking all the wealth of the US billionaires. Those amounts total less than the federal annual federal spending. His point being we have a spending problem, not a revenue problem.


All businesses are taxed at the end of the year separately on how much inventory they have on hand. It's taxed at a separate rate and paid at the state level not federal I believe.

Also, small businesses pay taxes on profits not revenue and often times those profits are calculated after you have paid a reasonable salary to yourself (if incorporated).

Actually, Ohio did away with the tax on inventory (personal property tax) a few years ago and replaced it with the Commercial Activity Tax. This tax is based on receipts and not profits. Doesn't matter how much money you're losing, you still owe this tax.

[ArizonaXUGrad]

If you'll read his article again, you'll see he spells out the annual government spending and then calculates the additional revenue from taxing the Fortune 500 at 100%, taxing at 100% all personal incomes over $250,000, and taking all the wealth of the US billionaires. Those amounts total less than the federal annual federal spending. His point being we have a spending problem, not a revenue problem.



Actually, Ohio did away with the tax on inventory (personal property tax) a few years ago and replaced it with the Commercial Activity Tax. This tax is based on receipts and not profits. Doesn't matter how much money you're losing, you still owe this tax.

We are talking federal not state so this CAT item is not relevant. Second, Williams point is good that we do overspend. Since 9/11 how can one justify the nearly doubling of our defense+discretionary defense budget. It's even higher for inflation adjusted dollars. Entitlements is not the first stop...defense is, then taxing the upper echelon, then attacking Government wasteful spending and those who commit fraud, then hit entitlements to balance everything.

I am saying entitlements shouldn't be touched, I am saying we should hit it last.

[bjf123]

I only brought up the Ohio CAT as an FYI because you mentioned that "All businesses are taxed at the end of the year separately on how much inventory they have on hand. It's taxed at a separate rate and paid at the state level not federal I believe." Just saying that's no longer the case. There are taxes out there based on receipts and not profits.

I think we all agree that spending needs to be cut. It's just a question of where and how much. However, I think if you look at defense vs. entitlements, you'll find that we're spending a lot more on entitlements. This chart (http://www.heritage.org/federalbudget/defense-entitlement-spending) shows that medicare, medicaid, and social security spending is more than double defense spending, even including Iraq and Afghanistan in the defense totals. Personally, I'd favor an across the board cut on all government spending. You can find special interest groups who will argue that you can't cut THEIR area because it's too important. Medicare? You want to kill our senior citizens. EPA? We'll all die from polluted air and water! Agriculture? Our food will be poisoned with chemicals. Education? What about the children? Defense? The terrorists will win! Yada, yada, yada. Cut them all and be done with it. I'd even be in favor of an across the board increase in tax rates of the same percent spending is cut. That way, everyone has some skin in the game.

[Kahns Krazy]

The problem here is that not all of the bottom 1% is lazy. Some and probably most have just had extreme bad luck, health problems, job loss, death in the family and corresponding loss of income. What do you say to those people? Do you just say good luck and kick them to the curb and hope they find a soup kitchen?

What I am offering here is instead of cutting the help of those that need it we should tax the income from those that don't need it as much. So what if the upper 1% can't live in that 3500 sq.ft. mc'mansion and has to downsize to a 2500 sq.ft. house. If that is me and it means 10 people get food stamps and healthcare then I am all for it. The top 1% isn't going broke with this, they just won't be able to get that 5th car or 6th bedroom or whatever other luxury.

I find it interesting that "those that don't need it as much" never applies to the person saying it. I have no idea what you do or make, but generalizing from the overall XU graduate profile, it's more than a lot of people that "need it more" according to you. What kind of car do you drive? Do you buy your clothes new? Are you on food stamps?

How much have you voluntarily given to assist the federal government in providing to those that need it more than you?

Here's a link right here. https://www.pay.gov/paygov/forms/formInstance.html?agencyFormId=23779454 You can do it online. Unless you can prove to me that you would be forced into homelessness by voluntarily contributing an amount equal to your prior year tax bill, why aren't you doubling your own tax bill? Clearly, there are people that need it more than you, right? Post a copy of your donation receipt, and I'll listen to your crackpot ideas about who else should be paying more than they currently do.

I have zero tolerance for people that are happy to spend other people's money, just not their own.

[JTG]

I find it interesting that "those that don't need it as much" never applies to the person saying it. I have no idea what you do or make, but generalizing from the overall XU graduate profile, it's more than a lot of people that "need it more" according to you. What kind of car do you drive? Do you buy your clothes new? Are you on food stamps?

How much have you voluntarily given to assist the federal government in providing to those that need it more than you?

Here's a link right here. https://www.pay.gov/paygov/forms/formInstance.html?agencyFormId=23779454 You can do it online. Unless you can prove to me that you would be forced into homelessness by voluntarily contributing an amount equal to your prior year tax bill, why aren't you doubling your own tax bill? Clearly, there are people that need it more than you, right? Post a copy of your donation receipt, and I'll listen to your crackpot ideas about who else should be paying more than they currently do.

I have zero tolerance for people that are happy to spend other people's money, just not their own.

Touche', I was thinking the exact same thing when I was reading Arizona's post.

[GoMuskies]

I am willing to spend as much of Kans Krazy's money as is necessary to get things back on the right track.

[xu95]

I find it interesting that "those that don't need it as much" never applies to the person saying it. I have no idea what you do or make, but generalizing from the overall XU graduate profile, it's more than a lot of people that "need it more" according to you. What kind of car do you drive? Do you buy your clothes new? Are you on food stamps?

How much have you voluntarily given to assist the federal government in providing to those that need it more than you?

Here's a link right here. https://www.pay.gov/paygov/forms/formInstance.html?agencyFormId=23779454 You can do it online. Unless you can prove to me that you would be forced into homelessness by voluntarily contributing an amount equal to your prior year tax bill, why aren't you doubling your own tax bill? Clearly, there are people that need it more than you, right? Post a copy of your donation receipt, and I'll listen to your crackpot ideas about who else should be paying more than they currently do.

I have zero tolerance for people that are happy to spend other people's money, just not their own.

Reps to you my friend.

[bjf123]

I find it interesting that "those that don't need it as much" never applies to the person saying it. I have no idea what you do or make, but generalizing from the overall XU graduate profile, it's more than a lot of people that "need it more" according to you. What kind of car do you drive? Do you buy your clothes new? Are you on food stamps?

How much have you voluntarily given to assist the federal government in providing to those that need it more than you?

Here's a link right here. https://www.pay.gov/paygov/forms/formInstance.html?agencyFormId=23779454 You can do it online. Unless you can prove to me that you would be forced into homelessness by voluntarily contributing an amount equal to your prior year tax bill, why aren't you doubling your own tax bill? Clearly, there are people that need it more than you, right? Post a copy of your donation receipt, and I'll listen to your crackpot ideas about who else should be paying more than they currently do.

I have zero tolerance for people that are happy to spend other people's money, just not their own.
I wonder how much the Hollywood / Media / Music crowd has given to help pay down the debt? I'm sure Bruce Springsteen, Katie Couric, Barbra Streisand, Tom Cruise, The Dixie Chicks, etc. could each afford a million bucks. Just think how much the debt could be paid down if everyone in these industries voluntarily gave an extra million! I'm going to go out on a limb here and say they haven't paid a dime more in taxes than their high powered CPAs and tax attorneys have determined is the absolute legal minimum.

[kmcrawfo]

LOL. Wow. Double Wow.

If my inventory goes from $500K to $890K, and my bank account is flat, that is $390K in increased assets. That is income. How do you not know that? Assets are assets when you are dealing with an S-Corp.

Arizona seems like a nice guy and is trying to have a good, civil discussion. He unfortunately does not understand how LLC, S-corps, and other small businesses actually operate from a revenue and tax structure.

Arizona, most of your premises of how these businesses are taxed and the impact of the tax increase you are proposing are simply off-the-map wrong.

Anyone who owns such a business and actually pays the already high taxes can tell you that. Too much to go into for this forum....

[kmcrawfo]

I have zero tolerance for people that are happy to spend other people's money, just not their own.

Isn't that the truth.... In general, people who have lots of money have it because they worked their tails off to earn it. What right does anyone other than themselves have to their wealth?

[ArizonaXUGrad]

I find it interesting that "those that don't need it as much" never applies to the person saying it. I have no idea what you do or make, but generalizing from the overall XU graduate profile, it's more than a lot of people that "need it more" according to you. What kind of car do you drive? Do you buy your clothes new? Are you on food stamps?

How much have you voluntarily given to assist the federal government in providing to those that need it more than you?

Here's a link right here. https://www.pay.gov/paygov/forms/formInstance.html?agencyFormId=23779454 You can do it online. Unless you can prove to me that you would be forced into homelessness by voluntarily contributing an amount equal to your prior year tax bill, why aren't you doubling your own tax bill? Clearly, there are people that need it more than you, right? Post a copy of your donation receipt, and I'll listen to your crackpot ideas about who else should be paying more than they currently do.

I have zero tolerance for people that are happy to spend other people's money, just not their own.

My wife and I have a household income of $125k. We donate to each of our respective universities, our old but still good clothes/appliances/furniture to Salvation Army, St. Mary's Food Bank, we pull Angels off of the tree each year, we donate to people doing cancer runs, I do good cause races, and I donate my time to trail building/maintenance projects and this Christmas I will be cleaning and repairing donated bikes for the Boy's and Girl's Club of Az. since they got a full 1000 rigs this year. My wife runs the Angel tree group in her office.

I would say between her and I, we probably donate money on the average and our time above average than most other folks. We aren't rich financially, but do our best to help those we can with both time and our funds. We choose our charities carefully ensuring each has the best dollar return ratio.

You can poke at me all you want, but I know I do my part and more especially with the funds and time that I have. Then again we don't have kids yet.

If I made $1M a year I would jump for joy whether the government doubled my effective tax rate or not. Then again, I probably wouldn't move or drive anything other than my Tacoma. I live the same now as I did when I made half as much. Literally in the same house I bought when I made just $35k.

I understand your need to attack me personally but before you do remember you don't know me or my giving nature to not only my friends and family but to those organizations who help people I don't know at all.

[kmcrawfo]

If I made $1M a year I would jump for joy whether the government doubled my effective tax rate or not.

l.

You can't make that statement unless you actually get to that point. You are already in the top 10% of all income earners, which is great. Right now, are you eargerly wanting to double your tax contribution? Why should you expect anyone else to? I am sure the bottom 50% considers you rich and thinks it would be fair for you to pay more. I don't think you should, or anyone else until gov't spending is curtailed big time. They all people must put some skin in the game.

In order to get to making $1 million per year you must appreciate how extraordinarily hard you would have to work, how much financial and personal hardship/risk you would have to invest, and the blood/sweat/tears, etc. I assure you that if you made it to that point you would be much less quick to make a comment such as this. It is damn hard to make $1 million dollars per year doing anything. If you are making this amount you are doing something novel, valuable, or you built something that other hold value in, etc.

If you increase your taxes by 10% you would pay probably around another $2000-3000 (guessing). I would pay another $40,000 to $50,000. Is my $45,000 somehow less valuable to me than your $3000 is to you? It is my $45k just as the $3k is your money. Beyond that, with your proposal you are asking me to not pay an additional $45k. You are actually asking me to pay around $100,000 per year in taxes. Can you honestly tell me that you would jump for joy to write a check for $100,000 and mail it to Uncle Sam when you worked you tail off to earn it. Furthermore, you expect me to chip in $100,000 while you pay NOTHING more.

Until you actually write a check for quarterly corporate income taxes or for personal taxes in these amounts you can not state that you would "be jumping for joy" to write it. Trust me... You wouldn't be. I jump for joy when I contribute to my church, the local boy/girls club, lymphoma society, etc. The gov't taking my money. Different story.

No one has a right to my money; nor, does anyone have a right to your $$$. It is as simple as that.

[Kahns Krazy]

My wife and I have a household income of $125k. We donate to each of our blah blah blah blah.


So your answer is that you have contributed exactly $0 to the federal government's fund. You think that you know how to support the nations' needy better than not only the federal government, but also the top 1% of wage earners, who you seem to have no problem taking from.

Thanks for sharing your opinion. My opinion is that your mentality is no different than the guy who shoplifts from Macy's because "they can afford it" or files a false insurance claim because the insurance company is so big it won't hurt them. You have justified why it's okay to take the property that belongs to someone else.


My wife and I have a household income of $125k. .... Then again, I probably wouldn't move or drive anything other than my Tacoma. I live the same now as I did when I made half as much. Literally in the same house I bought when I made just $35k.
.

Using your own arguments, I have determined that you don't need $90k of your income. You should be jumping for joy and doubling your tax payments.

[ArizonaXUGrad]

You can't make that statement unless you actually get to that point. You are already in the top 5% of all income earners, which is great. Right now, are you eargerly wanting to double your tax contribution? Why should you expect anyone else to?

In order to get to making $1 million per year you must appreciate how extraordinarily hard you would have to work, how much financial and personal hardship/risk you would have to invest, and the blood/sweat/tears, etc. I assure you that if you made it to that point you would be much less quick to make a comment such as this. It is damn hard to make $1 million dollars per year doing anything. If you are making this amount you are doing something novel, valuable, or you built something that other hold value in, etc.

Yes, I would love it. How do I know this? Because I have already gone from paying taxes from my first job and effectively doubling my tax liability once in my life already. I know how hard I worked to get there. I absolutely loved it. I also know from the path I am on that I probably won't move into the $1M bracket anytime but I will most likely move into the $250k bracket this decade and pay extra under Obama's plan. I really don't care because in the end I am still the same person, with the same frugality, the same lifestyle, instilled with the same values and no amount of money is going to change who I am. I am too old a dog to change now, well not that old but old enough to have decided who I am as a person and how I treat my fellow man.

I understand the advantage I have received by living in this country and the opportunities it provides and I have been reasonably successful in it. Some haven't, but this country posses the combined wealth to do something about it and we choose not to. We seem to just be unable to finish the job.

If you want an all for yourself policy then fine. We can stop paying for that nice military, police, and fire departments that protect you and your vast wealth. We can see how far you get then. Forget the fact that it's the lower income earners that work for those outfits.

Taxes are the price we pay for a civilized society - Oliver Wendel Holmes.

Our difference I think is that I believe it's not charity but a civic duty to make sure each of the nation's citizens have health care and food and access to education when they need it and shelter just as the United Nations charter of which we are a signor says.

Whether you work hard or not, it doesn't change the fact that you are a member of the human race which carries with it obligations to your fellow man whether you like it or not. Seeing as you don't like it, I really hope you never lose that mass of wealth you have worked so hard to accumulate since there might not be enough people with a feeling of stewardship like myself around with an extended helping hand.

[GoMuskies]

Man, that is a really big load of crap you're building there AZ.

[kmcrawfo]

Yes, I would love it. How do I know this? Because I have already gone from paying taxes from my first job and effectively doubling my tax liability once in my life already. I know how hard I worked to get there. I absolutely loved it. I also know from the path I am on that I probably won't move into the $1M bracket anytime but I will most likely move into the $250k bracket this decade and pay extra under Obama's plan. I really don't care because in the end I am still the same person, with the same frugality, the same lifestyle, instilled with the same values and no amount of money is going to change who I am. I am too old a dog to change now, well not that old but old enough to have decided who I am as a person and how I treat my fellow man.

I understand the advantage I have received by living in this country and the opportunities it provides and I have been reasonably successful in it. Some haven't, but this country posses the combined wealth to do something about it and we choose not to. We seem to just be unable to finish the job.

If you want an all for yourself policy then fine. We can stop paying for that nice military, police, and fire departments that protect you and your vast wealth. We can see how far you get then. Forget the fact that it's the lower income earners that work for those outfits.

Taxes are the price we pay for a civilized society - Oliver Wendel Holmes.

Our difference I think is that I believe it's not charity but a civic duty to make sure each of the nation's citizens have health care and food and access to education when they need it and shelter just as the United Nations charter of which we are a signor says.

Whether you work hard or not, it doesn't change the fact that you are a member of the human race which carries with it obligations to your fellow man whether you like it or not. Seeing as you don't like it, I really hope you never lose that mass of wealth you have worked so hard to accumulate since there might not be enough people with a feeling of stewardship like myself around with an extended helping hand.

Ok... I have just realized it is pointless to have an intelligent discussion with you....

So.. I am wealthy... Therefore, I must want an all-for-one society with no effort to help others. Get off your high horse and give me a break.

FYI.... I am fairly certain I give a far higher percentage of my income to charity and helping others than you and the vast majority of Americans living in this society do. I give plenty back and I do out of my own will to do so. I don't need to gov't taking it from me to do so.

I hope you are successful and someday get a clue of the difference between inefficient government spending and taxation vs. free-will charity and the organizations it supports.

You also completely fail to realize the difference between gov't supplying law and infrastructure vs. wealth redistribution.

[XUglow]

Whether you work hard or not, it doesn't change the fact that you are a member of the human race which carries with it obligations to your fellow man whether you like it or not. Seeing as you don't like it, I really hope you never lose that mass of wealth you have worked so hard to accumulate since there might not be enough people with a feeling of stewardship like myself around with an extended helping hand.

I run a business. I pay social security for everyone that works for me. I pay medicare for everyone that works for me. I pay health insurance for everyone that works for me. I give Christmas bonuses, and I give a bonus each quarter that we are profitable. I match 401K contributions. None of this is a part of the local, state, and federal taxes that you are discussing. While I don't have any choice about the payroll taxes, I did have a choice about the other things, and it is money that comes straight out of my pocket.

The reason that small business people think that Obama hates them is that they don't feel that he understands or appreciates what they do for society. 30 people from 30 different families got a paycheck from me today. I paid money into their social security fund. I paid money into their medicare fund. I paid money into their retirement fund. With all of that, all I seem to hear is that the millionaires and billionaires just aren't doing their share to help out.

My government should be trying to figure out how I can make twice as much so I can give out 60 paychecks to 60 families and pay double the taxes while I am at it.

[GoMuskies]

Listen Crawford and Glow, you greedy bastards. Everyone knows you'd work just as hard and employ just as many people at the same pay and benefits even if your marginal tax rate was 70%. Stop the charade!

[XUglow]

Listen Crawford and Glow, you greedy bastards.

I'm really not greedy. I wouldn't mind it one bit if they doubled Crawford's taxes.

[xudash]

Ok... I have just realized it is pointless to have an intelligent discussion with you....

So.. I am wealthy... Therefore, I must want an all-for-one society with no effort to help others. Get off your high horse and give me a break.

FYI.... I am fairly certain I give a far higher percentage of my income to charity and helping others than you and the vast majority of Americans living in this society do. I give plenty back and I do out of my own will to do so. I don't need to gov't taking it from me to do so.

I hope you are successful and someday get a clue of the difference between inefficient government spending and taxation vs. free-will charity and the organizations it supports.

You also completely fail to realize the difference between gov't supplying law and infrastructure vs. wealth redistribution.

This. Actually, this - squared.

Perhaps a law should be enacted that requires liberals to give away 50% of their earnings to charity, so that they're not caught making fools of themselves when they start lecturing people who truly do give back at high rates of giving.

Barrack Obama - arguing that Romney paid 14% in taxes last year. Of course, he wasn't paying in based on W-2 or K-1 earnings; he paid in based on capital gains taxes, etc. Beyond that little fact is the fact that his tax bill was 7 digits. 7 effing digits.

Certainly, it is offensive that a law abiding American paid what the tax code mandated that he pay and that he actually paid in millions.

[Kahns Krazy]

Taxes are the price we pay for a civilized society - Oliver Wendel Holmes.
.


Taxes are the price I want the wealthy to pay for a civilized society - ArizonaXUGrad.

I bolded the difference for you, in case you still don't see it.

[chico]

Crawford and Glow make the point far better than I ever could. Rich people are evil and they should be made to pay. They're all greedy bastards. Really, when did become such a bad thing to work your ass off to build something up? Now granted, there certainly are some greedy individuals out there, but the overwhelming majority (99% perhaps?) got where they are through hard work. And they care about their employees.

One more thing. Once ArizonaXUGrad makes his millions there is nothing stopping him - or any other "wealthy" individual with an Obama sign in his/her yard - to pay more than what their tax rate currently is.

[ArizonaXUGrad]

Listen Crawford and Glow, you greedy bastards. Everyone knows you'd work just as hard and employ just as many people at the same pay and benefits even if your marginal tax rate was 70%. Stop the charade!

This is called the 1950s when we had prosperity in the middle class, paying down the war debt, and dramatically increasing the GDP. Yeah, the 50s were absolutely terrible.

[ArizonaXUGrad]

This. Actually, this - squared.

Perhaps a law should be enacted that requires liberals to give away 50% of their earnings to charity, so that they're not caught making fools of themselves when they start lecturing people who truly do give back at high rates of giving.

Barrack Obama - arguing that Romney paid 14% in taxes last year. Of course, he wasn't paying in based on W-2 or K-1 earnings; he paid in based on capital gains taxes, etc. Beyond that little fact is the fact that his tax bill was 7 digits. 7 effing digits.

Certainly, it is offensive that a law abiding American paid what the tax code mandated that he pay and that he actually paid in millions.

The argument here isn't if he was doing what was legal it's if the tax code itself is a problem. My opinion is that the #1 problem we have today is a massively fat defense budget which should be dramatically scaled back. My second issue is the problems within the tax code itself that cause Romney to pay just 14% of his income in taxes. I think that was just 2011 and 2010 right? We don't what he paid in the past 10 years save for those two since he believes his father failed at his run because of the disclosure.

As far as myself and my tax returns, I have traditionally paid out about 7-8% of my income in cash charitable contributions and another 5-7% in non-cash goods. This does not include my time that I donate as well. The remainder of my income is put to mortgage, monthly expenses, car, and savings. This will be the first year my wife and I file together so I don't know exactly what her donations have been. Ever since I moved away from living paycheck to paycheck as a young 20-something I have always hovered in that 12-14% range. I have always needed to save income though to ensure I never go into debt for repairs and maintenance for my house and car.

This doesn't change the fact that if I made $400k+ or even $250k+ and my taxes go up you won't see me crying about the government taxing my money away.

To Khans - The rich should pay a lot more than it's fair share because they have a lot more to lose if our society fails. They are getting a dollar for dollar greater benefit for having their wealth protected by foreign invaders and those inside. The top 1% have most of the wealth, the most to lose, and they don't want to pay anymore to keep it. That does not make much economic sense to me.

[ArizonaXUGrad]

Crawford and Glow make the point far better than I ever could. Rich people are evil and they should be made to pay. They're all greedy bastards. Really, when did become such a bad thing to work your ass off to build something up? Now granted, there certainly are some greedy individuals out there, but the overwhelming majority (99% perhaps?) got where they are through hard work. And they care about their employees.

One more thing. Once ArizonaXUGrad makes his millions there is nothing stopping him - or any other "wealthy" individual with an Obama sign in his/her yard - to pay more than what their tax rate currently is.

They have their opinion and I have mine and history will be the judge. What does past history tell you about societies where the rich in large part own a significant portion of a societies wealth?

[GoMuskies]

This is called the 1950s when we had prosperity in the middle class, paying down the war debt, and dramatically increasing the GDP. Yeah, the 50s were absolutely terrible.

So you're also for 1950s style calculation of taxable income? And for these top rates to only apply to income in excess of about $3 million? This is going to be meaningful reform you're proposing.

[ArizonaXUGrad]

So you're also for 1950s style calculation of taxable income? And for these top rates to only apply to income in excess of about $3 million? This is going to be meaningful reform you're proposing.

The top marginal rate in the 1950s was I believe 90%. The 50s weren't perfect but I think 8 of 10 of those years we had positive growth, a net growth for the decade, a booming middle class, and we were paying down our national debt. I am confused about what sucks about all of that.

[paulxu]

I blame Reagan. He was the nutjob that was upset with millionaires having a lower tax rate than the garbage collecter.
Him and that Buffet guy. He had the same problem. Didn't think it was right that his rate was lower than his secretary.
Bunch of socialists.

[GoMuskies]

The top marginal rate in the 1950s was I believe 90%. The 50s weren't perfect but I think 8 of 10 of those years we had positive growth, a net growth for the decade, a booming middle class, and we were paying down our national debt. I am confused about what sucks about all of that.

The 90% was (and would be) the marginal rate of a tiny sliver of people, and it was riddled with avoidance possibilities. So the scheme you'd like to go back with would raise a miniscule amount of money, therefore it seems that it's only purpose is to be punitive. Not sure why we want that.

[GuyFawkes38]

I blame Reagan. He was the nutjob that was upset with millionaires having a lower tax rate than the garbage collecter.
Him and that Buffet guy. He had the same problem. Didn't think it was right that his rate was lower than his secretary.
Bunch of socialists.

I know it's intuitive to think "Capital gains should be taxed at the same rate as earned income".

Please, read and consider this post:
http://www.themoneyillusion.com/?p=7091

Why not. I'll also throw in this post from the left:
http://www.slate.com/blogs/moneybox/2012/09/21/mitt_romney_s_effective_tax_rate_is_very_low_most_ economists_think_it_should_be_.html

Reason dictates that capital gains tax should be zero. This is something that economists on the left and right agree on.

[KC4X]

I know it's intuitive to think "Capital gains should be taxed at the same rate as earned income".

Please, read and consider this post:
http://www.themoneyillusion.com/?p=7091

Why not. I'll also throw in this post from the left:
http://www.slate.com/blogs/moneybox/2012/09/21/mitt_romney_s_effective_tax_rate_is_very_low_most_ economists_think_it_should_be_.html

Reason dictates that capital gains tax should be zero. This is something that economists on the left and right agree on.

I'm not disagreeing that capital gains shouldn't be taxed, but won't that mostly reduce taxes for the wealthy? Romney tried to claim that as a benefit to the middle class. It may help the upper-middle class to some degree, but that's about it. I don't know too many middle class folks who have to worry about a large amount of capital gains being taxed. How would you propose that tax income loss to the government be recovered?

[GuyFawkes38]

If you want to increase the burden put on the wealthy, that is fine. But don't do it by increasing the capital gains tax! There are better, more efficient means to do so (increasing taxes on earned income in a highly progressive manner or increasing/placing taxes on goods which the wealthy buy...like a yacht tax, for example).

[DC Muskie]

Or a second or third house tax. Just tax special goods, and hope they add up to capital gains! So instead of complaining about capital gains tax, you can complain about the yacht, jet, vacation home tax.

[KC4X]

OK so we agree then. My double-negative probably didn't help with clarity. I agree that there should be no capital gains tax. There should be increased taxes that would primarily affect the wealthy to compensate for the reduction, though.

I'm not going to get into whether or not the overall burden should be increased, but I do lean toward the left. I just don't want tax cuts being sold as a benefit to middle-class when they really primarily help the rich.

[GoMuskies]

increasing/placing taxes on goods which the wealthy buy...like a yacht tax, for example).

Doesn't that sort of tax usually fall hardest on the union labor force who is building those yachts for the wealthy?

[KC4X]

Doesn't that sort of tax usually fall hardest on the union labor force who is building those yachts for the wealthy?

Only if they quit buying them, right? They'll have all that extra money since they're not paying taxes on capital gains. :) I seriously doubt they'd stop buying. One could argue they may buy more.

[chico]

They have their opinion and I have mine and history will be the judge. What does past history tell you about societies where the rich in large part own a significant portion of a societies wealth?

And what does history tell you about societies who try to live communally?

I'd much rather have a free system where you can have the ability to make your own future and give money how you want than one where you have to share with everyone regardless.

[tmac03]

As far as myself and my tax returns, I have traditionally paid out about 7-8% of my income in cash charitable contributions and another 5-7% in non-cash goods. This does not include my time that I donate as well. The remainder of my income is put to mortgage, monthly expenses, car, and savings. This will be the first year my wife and I file together so I don't know exactly what her donations have been. Ever since I moved away from living paycheck to paycheck as a young 20-something I have always hovered in that 12-14% range.

Yeah, we're going to need you to post those tax returns.

[tmac03]

[QUOTE=ArizonaXUGrad;364130]

To Khans - The rich should pay a lot more than it's fair share because...QUOTE]

I'll at least give you credit for admitting that your position is that the rich should be taxed unfairly.

[XUglow]

What does past history tell you about societies where the rich in large part own a significant portion of a societies wealth?

I don't know. Why don't you spell it out for us?

[bjf123]

If you want to increase the burden put on the wealthy, that is fine. But don't do it by increasing the capital gains tax! There are better, more efficient means to do so (increasing taxes on earned income in a highly progressive manner or increasing/placing taxes on goods which the wealthy buy...like a yacht tax, for example).

Many of you might be too young to remember this, but we tried a "yacht tax" in 1990. It was a colossal failure. All it really did was cost US jobs as the yacht, jewelry, and fur industries tanked, massive layoffs ensued, and tax revenues declined.

http://www.boortz.com/weblogs/nealz-nuze/2011/jun/30/lesson-yacht-tax/

http://www.thecitizen.com/blogs/lance-mcmillian/07-12-2011/tax-rich-tried-doesn’t-work

[Kahns Krazy]

As far as myself and my tax returns, I have traditionally paid out about 7-8% of my income in cash charitable contributions and another 5-7% in non-cash goods. This does not include my time that I donate as well.

5-7% of your gross income in non-cash goods is a surprising number. A good rule of thumb is that the donated value of used goods is approximately 25% of the original purchase prices, which would mean that you are spending 20-30% of your annual income on items that you will ultimately donate every year. Certainly, there may be other explanations for how this could happen. You could be a salesman that is required to purchase samples and you turn around and donate them in new condition when you are done with them, or some other reason that you are purchasing goods and donating them new. It's just uncommon, and I say that as a former paid tax preparer.

[ArizonaXUGrad]

And what does history tell you about societies who try to live communally?

I'd much rather have a free system where you can have the ability to make your own future and give money how you want than one where you have to share with everyone regardless.

Chico, then say goodbye to all those great services that you enjoy including the library, police, fireman, military, road maintenance, etc. If you want total freedom you can have it. There are plenty of 3rd world countries that you won't have any of the terrible things our country wastes money it gets from the crippling taxes you pay.

In turn, you will have to invest a vast amount of your wealth in things you will need to protect yourself because those countries won't do it for you.

[ArizonaXUGrad]

I don't know. Why don't you spell it out for us?

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

Just a quick list. If you think this country is special and immune you are being foolish. I think there is a nice quote about being doomed to relive history you aren't aware of.

[ArizonaXUGrad]

5-7% of your gross income in non-cash goods is a surprising number. A good rule of thumb is that the donated value of used goods is approximately 25% of the original purchase prices, which would mean that you are spending 20-30% of your annual income on items that you will ultimately donate every year. Certainly, there may be other explanations for how this could happen. You could be a salesman that is required to purchase samples and you turn around and donate them in new condition when you are done with them, or some other reason that you are purchasing goods and donating them new. It's just uncommon, and I say that as a former paid tax preparer.

I am well aware of depreciation. I have, however, saved money by buying cars and using them to the last 1-2k of their blue book value. I bought a new truck a while back so that is now done with. I have always donated those cars because the tax donation is at fair blue book value where as the cash savings by a trade have been significantly less. Combine that with my yearly house clean out. Over the years I have gotten rid of several couches, clothes, TVs, appliances, but it's really the car years that put me over the top.

This year it will be a surprisingly in great shape Ethan Allen leather couch my wife hates (car leather saver works great on it). A divorcee friend gave it to me a while back which he said he paid well over $5k but it had bad memories. I see no reason to think it's not 80% depreciated and claim $1k on the tax returns for it. I usually surf Craigslist to get an idea of how to value goods. Donated a big screen this year but it was 10 years old and only selling for $200 on CL which was 90% depreciated.

Short answer, yes I am aware of used good valuation. I try to go with what I can get on the open market unless I get a direct receipt from the charity with value on it.

I am not a pack rat, I literally donate everything I don't use anymore. I even built up a pretty sweet bike from random parts I have accumulated over the years and donated that to the B&G Club. I get creative sometimes.

[Kahns Krazy]

I will leave it at I hope for your sake that you are not audited.

Claiming that you give a percentage of your income as non-cash gifts when it is really taking a tax deduction for donating an item that was given to you is really a pretty long stretch in my mind. It really doesn't surprise me though. Individuals tend to overvalue what they contribute, while undervaluing what others contribute. That's why in your mind it makes total sense for you to get a tax deduction for something that wasn't yours in the first place while at the same time suggesting that the faceless "wealthy" should pay double taxes.

[XUglow]

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

Just a quick list. If you think this country is special and immune you are being foolish. I think there is a nice quote about being doomed to relive history you aren't aware of.

Seriously? Do we have over-taxed peasants that are going to rebel against feudal overlords?

I don't want to put words in your mouth, so I will ask you again to spell out what you are thinking. It sounds like you are saying that the wealthy need to give up what they have before rebellious people come and take it from them by force. Is that about it? The wealth will all be distributed evenly, and then what? Give us some specifics.

[ArizonaXUGrad]

I will leave it at I hope for your sake that you are not audited.

Claiming that you give a percentage of your income as non-cash gifts when it is really taking a tax deduction for donating an item that was given to you is really a pretty long stretch in my mind. It really doesn't surprise me though. Individuals tend to overvalue what they contribute, while undervaluing what others contribute. That's why in your mind it makes total sense for you to get a tax deduction for something that wasn't yours in the first place while at the same time suggesting that the faceless "wealthy" should pay double taxes.

I guess one could argue my taxable basis for that item is zero but not for the 2 cars I have donated or the other items. If you want to nit pick on the one item I have yet to donate, you can.

I have always taken reasonable depreciation on items and declared the 'market value' on my tax returns. I will have no issues if I am ever audited. I understand the tax code and accounting principles working in both the Corporate world and the Audit world.

[ArizonaXUGrad]

Seriously? Do we have over-taxed peasants that are going to rebel against feudal overlords?

I don't want to put words in your mouth, so I will ask you again to spell out what you are thinking. It sounds like you are saying that the wealthy need to give up what they have before rebellious people come and take it from them by force. Is that about it? The wealth will all be distributed evenly, and then what? Give us some specifics.

Who is our Nation's workforce, who does all the heavy lifting, who grows food, who makes clothes, who makes cars, who mans out police force, who populates our armies? It's not the top 1%. What happens when the lower 99% feels like they are slugging around for nothing or worse that they work only for the benefit of others and not themselves?

Remember your college history classes, what happens to nations where you have a limited few who control a vast majority of the wealth? We might not be there, but the last 20 years says that is exactly where we are going. The US is not special or immune to this. When the majority of it's people feel like they are getting screwed poop is going to the hit the fan. If you don't see it you are either fooling yourself or just being obtuse.

[Kahns Krazy]

http://www.scene-stealers.com/wp-content/uploads/2007/09/shawshank38.jpeg
What did you call me?

[XUglow]

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcTKmhM8mSuHcdMfGDqEQ46rPNLwO76Zu uysyCwwxqSqgIl5lzj93p3dJ08

I hope we can still party after the poop hits the fan. Don't care much about money, but I do like parties.

[XUglow]

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcQ9QN5ofkDeXU93N2exVIHawidm63B_m ndPxb51utDQoR7JQVNs9meX6w

What this thread needs is more dancing!

[boozehound]

Who is our Nation's workforce, who does all the heavy lifting, who grows food, who makes clothes, who makes cars, who mans out police force, who populates our armies? It's not the top 1%. What happens when the lower 99% feels like they are slugging around for nothing or worse that they work only for the benefit of others and not themselves?

Remember your college history classes, what happens to nations where you have a limited few who control a vast majority of the wealth? We might not be there, but the last 20 years says that is exactly where we are going. The US is not special or immune to this. When the majority of it's people feel like they are getting screwed poop is going to the hit the fan. If you don't see it you are either fooling yourself or just being obtuse.

I'm not really clear what you are talking about here. It's not the 99% vs. the 1%, regardless of what Occupy Wall Street would have you believe. There are a lot of people in the middle class who are top 20% to top 25% earners who don't have anything against the rich. In fact, they aspire to be in the top 10%, 5%, or even 1% some day. This aspirational nature is what used to make America great, before everybody started hating people who had more money than them.

Since you are so into historical examples, consider the following: If you look at history, most popular revolts have taken place when a very large group of people don't have basic things they need to live such as food, clothing, or shelter, or people who are enslaved to some degree. Even the poorest people in America are a long, long way from anything like that. They are obese. They have flat screen TV's. They have smart phones. They have ample civil rights and are far from oppressed. It is true that they aren't nearly as well off as the rich (and they shouldn't be because being poor should suck), but they are a long way from lacking basic necessitie

Consider also the fact that the welfare class in America is beholden to the government for their food and shelter which creates a built in disincentive to any kind of revolution (don't want those checks to stop rolling in...) and you have a situation in which any type of significant popular revolt is highly unlikely. Welfare is the opiate of the poor. Give them enough to keep the fat and happy and they are unlikely to want to jeopardize that.

I do think that we definitely could see a situation like Greece in the next 10 years or so, in which spoiled and entitled people take to the streets to protest the fact that their gravy train is slowing down a little bit.

People don't generally revolt because they think that the rich should pay marginally higher tax rates. They revolt because they don't have basic necessities they need for survival. That is unlikely to happen in America ever.

[GuyFawkes38]

Yikes!
IRS apologizes for targeting tea party groups (http://www.boston.com/business/personal-finance/taxes/2013/05/10/irs-apologizes-for-targeting-conservative-groups/AwUpy0FxXhWUyo9G55wkHJ/story.html)

I know that are lot of people on the right are acting like they this is not surprising. I am genuinely shocked that some IRS employees would have the balls to do this.

[Kahns Krazy]

Apparently that started in Cincinnati. Interesting.

This thread has some interesting discussion, and some head shaking statements.

[GoMuskies]

Yikes!
IRS apologizes for targeting tea party groups (http://www.boston.com/business/personal-finance/taxes/2013/05/10/irs-apologizes-for-targeting-conservative-groups/AwUpy0FxXhWUyo9G55wkHJ/story.html)

I know that are lot of people on the right are acting like they this is not surprising. I am genuinely shocked that some IRS employees would have the balls to do this.

On the one hand it's scary.

On the other hand, groups calling themselves "patriots" and "tea party" are, I believe, more likely to be the ones taking the silly Wesley Snipes-like position that they are not required to pay taxes. So it might make some sense that the IRS is taking a closer look at those folks.

Who knows?

[GuyFawkes38]

On the other hand, groups calling themselves "patriots" and "tea party" are, I believe, more likely to be the ones taking the silly Wesley Snipes-like position that they are not required to pay taxes. So it might make some sense that the IRS is taking a closer look at those folks.

Who knows?

Well, that line of thinking leads to some scary stuff. You can reasonably argue that nearly all conservatives feel like they should be taxed less and are more likely to lie on their taxes. Does that mean conservatives should be audited more? Should portions of the country that vote conservative be audited more than portions of the country that vote liberal?

IMHO, this is why conservatives should be against any type of profiling (which they are often for, ugh). There's a twisted logic to profiling that leads to dark places.

[bjf123]

I'm conservative, actually more libertarian, but that doesn't mean I cheat on my taxes. Do I think I pay too much? Yep, but I pay what the tax code says I should pay.


Sent from my iPhone using Tapatalk

[GuyFawkes38]

After some conservative organizations received this intrusive audit questionnaire (which violates IRS policy), they did not follow through with the process:
http://hotair.com/archives/2013/05/10/10-crazy-things-the-irs-asked-tea-party-groups/

this is ****** up.

[GuyFawkes38]

Boom!
http://bigstory.ap.org/article/irs-apologizes-targeting-tea-party-groups

[Kahns Krazy]

I'm conservative, actually more libertarian, but that doesn't mean I cheat on my taxes. Do I think I pay too much? Yep, but I pay what the tax code says I should pay.


Sent from my iPhone using Tapatalk

I actually pay more than the tax code says I have to, but it's only because I'm too lazy for some of the smaller deductions I would be eligible for to be worth it.