Just A Simple Question

[Guest]

Much has been made over the last 48 hours from the report published by the U.S. Census Bureau that the income of the richest 1% of Americans has increased by 275% in the last ten years, while the income of the poorest Americans grew at only a small fraction of that amount. The lowest 60% of earners have lost significant portion of the aggregate income in the U.S. over the last ten years, while the top 20% and top 5% have seen monstrous share increases. Over the last decade, the bottom 50% of people have not grown their net worth measurably. The top 10 percent have tripled their net worth.

The statistics are apolitical and unassailable. The rich are getting richer very, very quickly, while the poor are actually making less on an inflation-adjusted basis, while the middle class is simply disappearing. We have become a nation of haves and have nots.

This situation leads me to a simple question. There is a bitter ideological argument going on in Washington over increased taxation of the wealthiest few percent of Americans. The disagreement is so bitter that it stands in the way of any meaningful negotiation of fiscal reform. The most common argument stated for not increasing taxes on the wealthiest is, "...to tax the job creators would be economically counter-productive".

But the rich keep getting richer and the poor poorer. Unemployment and underemployment have reached unacceptable levels and now appear to have some permanency at double-digit levels. Very simply, the "job creators" aren't creating any jobs. They are simply increasoing their own net worth and lifestyle while the poor get poorer and the middle class disappears.

So the question is...if you would try to avoid simply repeating a tired ideological soundbite response about taxing the job creators, can anyone explain why it would it be wrong to include increased taxation on both the wealthiest individuals as well as corporations who are getting unneeded tax benefits as an element in a broad program of fiscal reform, including significant cuts in federal spending as well as entitlements?

Remember, I'm saying that any such increased taxes should be an element of a much broader reform of fiscal policy, including significant spending and entitlement cuts, maybe even a phased-in Constitutional Amendment requiring a balanced federal budget.

Someone try to answer the question, please.

[Guest]

VillageK could not have stated this dilemma any better!....I'm also confused with the "Occupy groups" across the nation, ultimately WHAT will they accomplish? Really?????

[Guest]

There's no simple answer to the not-so-"simple" question posed.

I think a big part of the problem is what the politicians are calling "Rich".

They continue to denigrate and condemn people making $250,000, as if they were living the same lifestyle and paying the same (lower) federal tax rates as Donald Trump, Warren Buffet, Bill Gates, Oprah Winfrey, or the many U.S. Senators and Congressmen who are multi-millionaires.

The problem is, many, many small business owners are in that $250k range with their business income reported on their personal returns.

"S Corporation Income

In general, an S corporation does not pay tax on its income. Instead, the income, losses, deductions, and credits of the corporation are passed through to the shareholders based on each shareholder's pro rata share. You must report your share of these items on your return. "
http://www.irs.gov/businesses/small/article/0,,id=117613,00.html

The above is why people are interested in Cain's and Perry's Flat Tax Plans. (Perry's notably has personal, mortgage and charitable deductions for people under $500,000.....not $250,000).

[Guest]

I don't know if there will ever be an acceptable accomplishment as long as almost 50% pay no taxes. And the highest percent of entitlement qualified people are in that percentage that pays no taxes as well.

The rich getting richer and the poor not getting any better has always been a part of civilization, where ever.

I am trying to stay on topic but do have to say the current partisan based class warfare of the current generation's obsession with entitlements and big government do nothing more than create a political platform that is being worked day in and day out...starting with Obama's continual harping on the subject.

As far as the taxation aspect goes, until such time as there is across the board participation in taxation the argument will never go away. If one is to partake of any entitlement program(s) it will need to be based on contributions like Social Security.

Some of us still remember having to pay taxes with as little as a four (4) figure income. Since those days we as a people have become more aware of the do's and don'ts, where the loop holes are and the game of skating on the thinner ice all leading to either paying lessor or no taxes.

The answer will only come to pass when the politicians own up to the issue. You cannot have almost half not paying any taxes with their hand out. You cannot have the likes of GE paying no taxes. You cannot have up to 40% of American and off shore companies operating here in America ALSO paying no taxes.

A major tax reform has to take place to bring the system any where near fair. The politics of the situation will not allow such a disruption to their fat and happy business as usual.

btk

[Guest]

You also need to understand that the people who are "rich" and the people who are "poor" are always in flux. Many, many of the poor are new immigrants, legal and illegal. Many of the old poor are no longer in that catagory, but have achieved.

This subject is discussed as if the people in those catagories are stagnant.

[Guest]

I guess I don't understand why anyone would believe that "the rich" aren't paying taxes on that 275% increase in income.

[Guest]

Much has been made over the last 48 hours from the report published by the U.S. Census Bureau that the income of the richest 1% of Americans has increased by 275% in the last ten years, while the income of the poorest Americans grew at only a small fraction of that amount. The lowest 60% of earners have lost significant portion of the aggregate income in the U.S. over the last ten years, while the top 20% and top 5% have seen monstrous share increases. Over the last decade, the bottom 50% of people have not grown their net worth measurably. The top 10 percent have tripled their net worth.

The statistics are apolitical and unassailable. The rich are getting richer very, very quickly, while the poor are actually making less on an inflation-adjusted basis, while the middle class is simply disappearing. We have become a nation of haves and have nots.

This situation leads me to a simple question. There is a bitter ideological argument going on in Washington over increased taxation of the wealthiest few percent of Americans. The disagreement is so bitter that it stands in the way of any meaningful negotiation of fiscal reform. The most common argument stated for not increasing taxes on the wealthiest is, "...to tax the job creators would be economically counter-productive".

But the rich keep getting richer and the poor poorer. Unemployment and underemployment have reached unacceptable levels and now appear to have some permanency at double-digit levels. Very simply, the "job creators" aren't creating any jobs. They are simply increasoing their own net worth and lifestyle while the poor get poorer and the middle class disappears.

So the question is...if you would try to avoid simply repeating a tired ideological soundbite response about taxing the job creators, can anyone explain why it would it be wrong to include increased taxation on both the wealthiest individuals as well as corporations who are getting unneeded tax benefits as an element in a broad program of fiscal reform, including significant cuts in federal spending as well as entitlements?

Remember, I'm saying that any such increased taxes should be an element of a much broader reform of fiscal policy, including significant spending and entitlement cuts, maybe even a phased-in Constitutional Amendment requiring a balanced federal budget.

Someone try to answer the question, please.

Your solution clearly and absolutely identifies a quantum leap from capitalism to a Marxist "spread the wealth" economic system. It is certain that many disciples of socialism and communism would agree with you emphatically. It would be difficult in this forum to define a macro view of Marxism and its defined and intended metamorphosis from capitalism to socialism to communism. With great and calculated oversimplification, the Marxist concept of history and economies are divided into six epochs.

Primitive Communism
Slave Society
Feudalism
Capitalism
Socialism
Communism

The Communist Manifesto in part, calls for:

the promotion and instigation of class warfare

"a heavy progressive income tax"

abolition of the right to inheritance

Centralization of credit in the hands of the State

It then ends by declaring an alliance with the social democrats, boldly supporting other communist revolutions, and calling the proletarians to action, ending with the rallying cry of communism, "Workers of the world, unite!". If you really get into it, you may want to check a fellow by the name of Lenin, not the Beatle. Lenin postulated that socialism equates to Marx's first phase of communism. Has the redistribution of wealth you suggest worked well in communist countries we know today? Have the communist countries advanced freedom, liberty and democratic societies like our "evil" capitalistic system? The question is purely rhetorical.

Of course the case against "redistribution of the wealth" is gaining in popularity. One has only to look to our socialist/communist neighbors in Europe to determine how that whole Marxist thing is working for them. Counter arguments to spreading the wealth include the fact that it doesn't create or spread prosperity. More importantly, wealth spreading is NOT a government function except for socialists and communists. Then the ruling elite gets to pick the winners and losers. Hmmmm......does that sound familiar? Does "Going Galt" mean anything to you? Galt is a character in an Ayn Rand novel. He's a successful businessman who withdraws from the economy because of punitive (spread the wealth) taxation and costly regulations. The term "GOING GALT" refers to those producers and job creators who pull out of the economy or downsize because the risk and effort to be efficiently productive and profitable has been compromised by rewarding victims selected by the government through the type of redistribution you suggest. Your suggestion has clearly been ascribed to an economic system that can be defined in cursory reviews of Marxism, socialism and communism. That is disturbing to many.

I recently reread the Communist Manifesto (1848) and some of Marx and Engels other work. A lot of its ideas and ideology could be right out of Sunday's NYT headlines. I'm not admittiing I actually read the Old Grey Lady...I just heard. I'm sure some in the current administration are conversant with the works of Marx and Engels. They keep them right alongside their copies of Alinsky's Rules for Radicals.

We are in complete agreement about the "Balanced Budget" amendment. Have a good evening.

[Guest]

Nicely done Cabo. A wealth of info and ideas to think about; thanks.

[Guest]

I just want to know if the test will only cover what's on the board or are we responsible for reading the book also? LOL :loco:

EB

[Guest]

I don't know if there will ever be an acceptable accomplishment as long as almost 50% pay no taxes.

I think this is the basic problem. It's the perception that the 'poor' pay no taxes.

That may be true of the income tax, but they most certainly DO pay sales taxes, FICA, excise taxes, etc. I'm looking for the numbers that I read a couple of weeks ago that showed how, when you add up all the taxes, the picture of who's paying what percentage of taxes changes DRAMATICALLY. This is largely due to sales taxes and other similar taxes.

[Guest]

I think this is the basic problem. It's the perception that the 'poor' pay no taxes.

I really think that most poeple know that when they say that the poor pay no taxes they mean income tax.
It always sounds like a very weak defense to me that they pay all these other taxes. I think that most of those taxes are offset by the hand outs or entitlements that they recieve.

Now I don't have any problem if the uber rich want to pay more, more power to them. But saying the poor are poor because of the rich is not right (not saying you said that MHO).
They are rich for so many different reasons and the poor are poor for just as many reasons. Still no reason to take it from the rich to give it to the poor.
I was poor, very poor. Our house was condemned while we lived in it.
I did not think that someone should give me one. I wanted to know how to EARN money to get one and live at a higher standard. I do and am proud of that.
What I think is missing is pride in earning what you want. You don't get that from taking handouts from the gov.
EB

[Guest]

I just want to know if the test will only cover what's on the board or are we responsible for reading the book also? LOL :loco:

EB

It will be an open book test. Those with the highest scores will have their points reduced by a secret panel and added to or redistributed to the low and failing scores of those who didn't work or study so underachievers will be on an equal footing with the more resourceful, driven participants. In other words, everybody passes with a C-. In true Marxist style, this system will perpetuate mediocrity, stifle initiative and kill the motivation to satisfy intellectual curiosity and achievement. :icon_bored:

[Guest]

I Love It :BigApplause:

[Guest]

I don't think you'll find many people advocating giveaway programs to the poor.

...that is, depending on what you think Medicare and Social Security are in that respect.

We need revenues to rebuild our infrastructure - and by that I mean everything from roads to schools.

It's not going to be so much 'taking away from the rich' to 'give to the poor' as it is having 'the rich' pay for what we're trying to maintain. I think it's far more likely to try and institute policies that will strengthen the middle class which has been declining for some time now.

The facts are that we're taxed at a lower rate overall than any time since the 1950s (which a few posters say is the kind of time that they long to return to).

The old days of Democrat giveaway plans are a thing of the past, I think. After all, remember that it was during the Clinton administration when welfare reform was passed and the prescription drug plan was passed under Bush - so you can't make the same kinds of predictions that used to be standard talking points. Now, you may have arguments about some kinds of programs that will undoubtedly come out - like what to do about student debt, if you take Obama's recent speeches as an augur.

[Guest]

is it Marxist to roll back the tax rates to the pre Bush times?

[Guest]

is it Marxist to roll back the tax rates to the pre Bush times?

That would depend on whether the windfall revenue was redistributed to a "victim" entitlement class identified and selected by the government because they know best and are so efficient in matters that involve the doling out of taxpayer dollars without political bias. Sarcasm emphasized.

[Guest]

is it Marxist to roll back the tax rates to the pre Bush times?Isn't that going to happen anyway? Am I wrong in thinking that the Bush tax cuts "sunset" sometime in 2012? They were supposed to sunset earlier this year, but Obama horse-traded for something else and agreed to extend them for two years.

If that's the case, the House will vote to extend them and the Senate will block the House bill. If by chance it passes both houses of Congress, the POTUS will veto the bill and the Senate won't have the necessary votes to override the veto. That's assuming that the Senate doesn't become GOP majority and the POTUS is still Obama, both of which seem reasonable chances at the moment.

If this is the case, why all the sturm and drang right now about increasing the taxes on the rich? It's going to happen anyway. In fact, the taxes on lots more than the rich will go up.

[Guest]

I don't think Obama will let the middle class parts of the Bush tax cuts expire.

[Guest]

Isn't that going to happen anyway? Am I wrong in thinking that the Bush tax cuts "sunset" sometime in 2012? They were supposed to sunset earlier this year, but Obama horse-traded for something else and agreed to extend them for two years.

If this is the case, why all the sturm and drang right now about increasing the taxes on the rich? It's going to happen anyway. In fact, the taxes on lots more than the rich will go up.

While your analysis and assessment is accurate and probable, it does not speak to the missing component. That component is the "redistribution of wealth to a "victim" class identified by the government. Why are revenues needed and who receives the dole? Who will the victims be?.... Unions?....the homeless?..... mortgage holders who are underwater?.... the unemployed?..... college students who don't want to pay off their loans? illegal immigrants who need medical coverage and free college tuition?.....oh yeah, there's that whole under funded Obamacare thing and let's not forget corporate welfare and bank bailouts for all those generous election donors. How about those billions for green companies like Solyndra. Who will be rewarded with the revenue windfall and who will not. What is the formula for who receives and who does not. Therein sir lies the rub.

I tacitly acknowledge that the government has the right to levy taxes. They are obligated to keep us safe through a strong military, they are obligated to preserve our liberty from those ideologies that would take them away. My liberal side will even concede that government should maintain infrastructure. My "sturm and drang" comes from those who want to change our way of life, diminish our liberty and disrupt our pursuit of happiness and freedom by perpetuating Marxist ideology, pure socialism and redistribution of wealth by big government run by pompous, self serving elites.

Whether taxes go up or down is a straw man argument and diversion from the real point. That point precisely is.... what will revenues be used for? That sir.....is the component your assessment dismisses and does not speak to.

[Guest]

and when the Bush tax cuts were extended last time it was exactly for the fact congress did not want the middle class taxes to go up and to avoid another stalemate back then and fight about just doping it for the middle class and not the "rich"...the extended it in total....which they will do AGAIN next year.

btk

[Guest]

That would depend on whether the windfall revenue was redistributed to a "victim" entitlement class identified and selected by the government because they know best and are so efficient in matters that involve the doling out of taxpayer dollars without political bias. Sarcasm emphasized.

I've read your posts with great interest. I hope that you post more often. Your intellect is obvious. The efficiency of the market place is as close to perfect as you can get. Capitalism must have rules that are followed however, and Capitalism must adequately reward those who follow its rules. Governments that give overwhelming advantages to established oligarchies cannot be tolerated. Those advantages are in conflict with the concept of Democracy.

Socialism and it's ugly brother communism are grossly inefficient.

Capitalism with a good set of rules that are enforced. That's the answer. Corporations become too powerful when they can sue innovators out of existence. One example is a woman who invented a way to transmit electricity through the air by converting the electricity to sound above our hearing range and crystals that reconvert the sound back into electricity. She patented the process but refused to license the process out to major companies. The companies threatened to bury her in litigation. They shouldn't be able to do that because it stifles innovation.

Removing the cap on Social Security withholding, negotiating with drug companies for better prices and letting only the tax cuts for the wealthy expire next year will go a long way in helping lower the deficit. And for God's sake lets not fall victim to another scam war like Iraq.

[Guest]

Isn't that going to happen anyway? Am I wrong in thinking that the Bush tax cuts "sunset" sometime in 2012? They were supposed to sunset earlier this year, but Obama horse-traded for something else and agreed to extend them for two years.


The horse trading that you mentioned, weren't the Republicans holding the middle class tax cuts hostage to the passage of the tax cut for the wealthy?

[Guest]

I've read your posts with great interest. I hope that you post more often. Your intellect is obvious. The efficiency of the market place is as close to perfect as you can get. Capitalism must have rules that are followed however, and Capitalism must adequately reward those who follow its rules. Governments that give overwhelming advantages to established oligarchies cannot be tolerated. Those advantages are in conflict with the concept of Democracy.

Socialism and it's ugly brother communism are grossly inefficient.

Capitalism with a good set of rules that are enforced. That's the answer. Corporations become too powerful when they can sue innovators out of existence. One example is a woman who invented a way to transmit electricity through the air by converting the electricity to sound above our hearing range and crystals that reconvert the sound back into electricity. She patented the process but refused to license the process out to major companies. The companies threatened to bury her in litigation. They shouldn't be able to do that because it stifles innovation.

Removing the cap on Social Security withholding, negotiating with drug companies for better prices and letting only the tax cuts for the wealthy expire next year will go a long way in helping lower the deficit. And for God's sake lets not fall victim to another scam war like Iraq.

I agree with the concept of limited regulation in cases such as the example you cite. The problem occurs with the calculated and oppressive regulation that is a component of a political ideology. You know it well. It resides in the White House today. I respectfully submit that it is that type of government regulation that truly "stifles innovation" as you suggest. Domestic energy development comes to mind as a current example. The Gibson Guitar case is but one of many oppressive regulatory lynchings that offend me. So much to explore......so little space and time.

Removing the cap on withholding, negotiating with drug companies and letting tax cuts on the wealthy expire would help lower the deficit as you suggest. Of course that presumes that the revenue was dedicated to that purpose. Unfortunately, in the real world, those in Washington who get their hands on the revenue windfall will creatively find other ways to "redistribute the wealth". Ways that are more consistent with their self interest and ideology. I have said this in many ways before. Our government has Americans debating the issue of raising or reducing taxes. As long as our eye is off the ball, the treasury will continue to be plundered by special interests. The question should be...WHERE ARE OUR TAX REVENUES GOING? The devil is in the details of this question.

Responding to your position on the Iraq war would require more keystrokes then this site can support and this poster, at the moment, has in him. In fairness, it would command a thorough explanation on the dynamics of the Mideast, the Arab Spring, Iran, Israel, Islam and our current foreign policy in that region. The spread of Islam in Europe has created considerable unrest as evident by the most cursory viewing of world news. Just last night, Sweden of all places, was the site of riots and civil unrest by components of the Muslim population. I should add that Sweden's problem has been growing for many years and involves a smaller, more extreme element of their increasing Muslim population. My goodness.... this Sweden thing could morph into its own thread. In briefer terms than are warranted, your statement on the Iraq War, strikes an emotional nerve at many levels. It doesn't reveal or consider the complexity of the threats to Israel, Western Europe and the United States that are in play. Now that would be interesting and informative.

You do provoke a lot of thought that most of us can learn from.

[Guest]

...Why are revenues needed and who receives the dole?....Whether taxes go up or down is a straw man argument and diversion from the real point. That point precisely is.... what will revenues be used for? That sir.....is the component your assessment dismisses and does not speak to.Remember what I've proposed...that modification of tax policy including increased revenues, increased taxes, be a component of a broader program of fiscal reform. That program should include substantial cuts in government spending, entitlements, defense as well as increased taxes. I think that a balanced budget Constitutional amendment could also be a component, so long as it's phased in over a period of time to avoid doing more immediate harm that the long-term good of the idea.

I agree that simply increasing tax revenues will likely have no effect other than increased government spending. That is why increased taxes must only be a part of a broader re-direction of fiscal policy.

I do find it curious that most recognized financial experts have said that our fiscal problem cannot be solved with spending cuts alone, that almost everyone agrees that the wealthiest Americans aren't paying enough in taxes, and that there is a myriad of tax breaks, deductions and benefits that accrue to corporations that don't need them. The public, the wealthy themselves, and various large groups of corporations publicly agree that these changes should be made. But it's only idealogs who continue to refuse such considerations, refusing to even negotiate fiscal reform if it includes any form of revenue increase.

I can ask "why", but I think I know the reason. It's the thousands of lobbyists that keep the money flowing between K Street and the halls of Congress.