Originally Posted by Villages Kahuna

You can't blame one party for the hodge-podge of rules and regulations that make up this healthcare bill. The President and the Democratically-controlled Congress set out to get healthcare for 32 million people. Let's not kid ourselves--that was their main agenda item.

The Dem's proposed government insurance to provide that coverage--a pretty easy extension of Medicare to cover another 32 million people. The Republicans and some of the more centrist Democrats violently opposed that idea and with the encouragement and money from the insurance companies they drove the bill towards private insurance coverage, a far more complicated proposition given the state-oriented system of private health insurance. Heck, the GOP refused to even consider any kind of method for increasing the competition between insurers, including language that would permit competition across state lines, the objective of which was to drive down costs. (There's that insurance lobby at work again.)

But one way or another, the President and the Pelosi/Reid cabal was going to get coverage for all Americans one way or another--something that Presidents since Teddy Roosevelt have tried to get. They traded off anything and everything necessary to achieve that singular goal. If the GOP and the centrist Democrats were going to block the idea of the government providing the insurance for the uninsured, then the leadership came up with the idea of requiring employers and even individuals to buy insurance from private insurance companies. The result is the Rube Goldberg bill that emerged.

But neither party was totally responsible. Their politics and total unwillingness to compromise on anything was.

Well, VK your posts drive me crazy. I agree with so much of what you post but you either cannot resist or do it subconsciously and that is steer it to praising this President and congress in some way.

Listen, I dont doubt that the President began with a motive of insuring more people, but again, he talks a good game....he would have accepted anything at all in this bill, and to me that is not being President...that is being a politician TOTALLY. Trading off "anything and everything" to acheive that goal is not what I want my President or congress to do.

I dont agree with your assesment of the bill from a political standpoint. For example you mention the competition across state lines and imply that the Republicans killed that because of pressure from the insurance companies, unless you are aware of a lot I dont know which is very possible.

I recall during the big time public meeting that the Republicans brought this up...the President said he thought it was a good idea...had it in the next time he talked about it and then, as with all the Republican ideas that he thought were good...THEY DISAPPEARED. Correct me on this if you know something I dont know !

I still think that future bodies of congress will be absorbed in this bill because of how it was structured. It makes no sense AND IT WILL LEAVE MILLIONS UNINSURED, soon to be really confused as immigration is tackled. It is also so much more costly than what you say and certainly much more than our congress says. It is based on borrowing savings....a tax that is never goiing to be enacted.....perhaps not a ponzi scheme as some Republicans call it but certainly the foundation is flimsy at very best !

Now this is disturbing....from today s news...

"Henry Waxman is peeved. He expects corporate America to swallow health-care reform without a peep of protest -- and, apparently, without revealing new costs to shareholders or the Securities and Exchange Commission.

Last week, AT&T announced it will take an immediate $1 billion write-down thanks to a new tax in the health bill that will cause Caterpillar ($100 million) and Deere & Co. ($150 million), among other large employers, to do the same. The benefits consultancy Towers Watson estimates that the change may reduce corporate profits by as much as $14 billion over time.

Now that is just the basis......THIS IS WHAT IS DISTURBING and relates to the previous posts about the "just pass it..dont give a darn what is in it" philosphy...

"Democrats clearly plan to blame the private sector for all the downsides of their health plan. In a private lobbying session, President Obama told liberal lawmakers that the bill is only "a beginning." Any increase in costs and premiums -- both of which are inevitable -- will be attributed to corporate malfeasance requiring yet more government intervention."

http://www.realclearpolitics.com/art...es_104977.html

This is pretty much what folks have been saying is going to happen, and the glee one might find in seeing what they think privately showing up in someones article is overshadowed by the sheer fear of what is happening.

Originally Posted by Villages Kahuna

I absolutely and definitively disagree with your theory. This isn't even a debate, Cashman. In order to have a debate, you have to present some facts to support your argument.

Even the non-partisan Government Accounting Office estimated that in order for the federal budget to reach "no deficit" status, growth of our GDP would have to be greater than 10% for 75 years. The U.S. has not had year-over-year GDP growth exceeding 10% since 1976-77, and then only for one year.

Reducing tax rates absolutely will not have sufficient impact to create the kind of growth in GDP needed to increase tax revenues and balance the budget.

Why do you refuse to either study the numbers, or at least come up with some viable reference or thesis by someone more experienced and notable than yourself to support your theories? The old "cut taxes and everything will trickle down and fix the problem" hasn't worked for decades, and certainly can't work to resolve the amount of debt that we've accumulated--particularly "mandatory" debt payments.

Geez, do the numbers, wil you. And stop just repeating the economic theories presented by the least knowledgeable of the TV political entertainers.

You sure are a man of academic theories.

I said if you do not agree with the fact that increasing tax rates has a negative impact on revenues there is no point in debating with you.

You are obviously limiting your research by not learning the "laffer rule"
or reading J D foster or William W Beach and 100's of others.

I give up with debating you it is hopeless. See ya.

Originally Posted by djplong

ijusluvit: Thanks for explaining yourself. Now, to dig a little deeper - what do you think of the following situation? I came into some money back in 1990 (death in the family). Some of that money, I invested in a friend's business that I really believed in - so much so that I worked for 'sweat equity' on my off hours for a while (developing software). When I had money, I put about $22,000 in cash into the business (private stock purchase). Combined with my 'sweat equity', on the books, I'd put in about $26,000 (valuing my labor at FAR below what my billing rates were - but, again, I believed in the future value).

Set the calendar over a year later. My 'stock' (and I put it in quotes because it wsa a private issue, not publicly traded) is worth $103,000 due to the growth in the company. Mind you, I'm not one of the paid employees. By now, I own 1% of the company with my investment of time and money.

In real life, we were bought out by a company that later turned out to be quite shady. At the time of the buyout, we all voluntarily took a reduced value to out shares - mine were valued at $86,000 - in order to be part of what was to be a publicly traded company. Well, the company sold the assets (our software) off to an offshore firm and we were left with nothing. In the end, a conversion resulted in my shares being worth $50. Yes, one copy of Ulysses S. Grant.

But let's have an exercise. Suppose the parent company prospered and wasn't so shady. Suppose a couple of years later I had $300,000 in stock and now I wanted to lock in my 'profits' and diversify so that I didn't have all my retirement eggs in one basket.

If I sold my stock at $300,000, I'm looking at around $275,000 in 'profit' - especially considering how hard it is to define how much I 'paid' with my 'sweat equity' part.

For all that risk and waiting a few years for gratification, what do you think is a fair taxation rate? You specifically mentioned 'above $250,000' for higher taxes. In this case, how much is "right", in your opinion? The IRS says that I could be looking at the lower Capital Gains tax rate as opposed to 'regular income' (depending on the asset and how long I've held on to it). What's your opinion?

Then - what if I held on to it for a few more years - until it was worth, say, $500,000?

At the present time, regular income dollars in the 250k range are subject to federal income tax percentages over 30%. That's almost right, but I'd support small percentage increases from the current schedule up to perhaps $500k. Dollars above that point would be subject to sharp percentage increases for a period of at least 5 years. Again, Buffet and Gates could tell us the numbers which would finally convince companies to stop paying the obscene bonuses, large chunks of which would simply go straight to JQ Public.
Capital gains taxes are a straight 15%. I think they should be increased on dollar profits exceeding 100k (let's say at least 20%), with a graduated percentage scale topping out at perhaps 50%. However, I also would like to see more latitude in deferring capital gains taxes through moving profits to other investments. Purchasing treasury bonds and other government securities with capital gains would automatically defer capital gains taxes, as would some other kinds of "economically stimulating" investments. Based on the time period the owner held on to these investments before cashing out, the tax rate would be gradually reduced.

Originally Posted by Bucco

Well, VK your posts drive me crazy. I agree with so much of what you post but you either cannot resist or do it subconsciously and that is steer it to praising this President and congress in some way.

Maybe you're a centrist like I am, Bucco. I've said before that I am a fiscal conservative, maybe even to the far right fiscally. But I also lean left on social issues--like getting healthcare coverage for all Americans. And I'm on the right side of the middle on foreign affairs issues, although definitely not a military hawk.

While I won't vote for President Obama's re-election--he's an incumbent, remember?--I do think there's a lot of good things that have happened as the result of his administration. So if you read in some compliments, that's because they're there.

I do not care for his performance on fiscal issues. He had the opportunity to speak to fiscal issues and act on them and didn't. Other issues were obviously higher on his priority list. That more than overbalances the good things he's done in ny mind. Besides--like I said--he's an incumbent.

Originally Posted by cashman

You are obviously limiting your research by not learning the "laffer rule"
or reading J D foster or William W Beach and 100's of others.

I give up with debating you it is hopeless. See ya.

I agree. Let's not debate.

By the way, have you looked at the charts contrasting tax rates with economic activity and GDP, particularly in the last twenty years? That may be why don't hear very much about the Laffer Curve or the theory of Taxable Income Elasticity anymore.

Is the Laffer Curve theory still valid? Yes. But it is far less powerful than when it was first put forth 30-40 years ago. The main reason is structural changes in our economy, particularly among consumers, mostly in the last decade. For years, during which Arthur Laffer came up with his theory, the U.S. had a negative savings rate. Like the government, consumers were heavy spenders, borrowers, and did no saving. That has changed. The current savings rate among consumers is about 3-1/2% of their income. Almost all economists believe that this structural change is relatively permanent.

George Bush found out how dissipated the old theory of taxable income elasticity when he had a a couple tax redutions enacted in his second term. They took the form of rebates. What happened was that the consumers applied almost all the rebate tax refunds to savings. That is, almost none of it was used for spending, consumption, increased demand and all the things that reduced taxes had resulted in when savings wasn't in the picture.

In round numbers, in order for the Laffer theory to have any effect given the changes in consumer behavior, income taxes would have to be reduced substantially more than 3-1/2%. That would be a HUGE tax reduction given the fact that the average personal tax rate in the U.S. is only about 13-1/2%. If taxes were reduced by, let's say 7%, there's a chance the Laffer theory would kick in. But that would almost double our annual deficit from about $1.4 trillion to almost $2.7 trillion. That's the main reason why reduced taxes are not likely to be the solution to the problem of lagging GDP.

But like I said, let's not debate this anymore.