Corporate taxes, Romney v Obama

[cutthemdown]

http://www.bloomberg.com/news/2012-07-22/romney-outsmarts-obama-in-fight-over-multinational-taxes.html

plan for taxing multinational corporations would create 800,000 jobs, according to President Barack Obama.

“There’s only one problem,” the president added at a speech in Ohio last week. “The jobs wouldn’t be in America. They’d be in other countries.” That clever remark kicked off a week of sparring between the two candidates and their surrogates about the right way to tax corporations.

On this count, the president is wrong. Investment and job growth abroad don’t necessarily mean job losses in the U.S. And more importantly, Romney’s plan to tax multinational corporations only on the income they earn domestically is on the right track.

Properly structured, and combined with a lower corporate- income-tax rate, a so-called territorial system could make U.S. companies more competitive, simplify the tax code, reduce compliance costs, boost real wages and enable companies to repatriate the more than $1.2 trillion they are now holding abroad for fear of the tax man.





Yeah but LABF and Obama says our corporation aren't paying enough. 35%. The on top of that when shareholders make money off the corporations stock they want to raise that tax also. Why don't liberals see this?

[L.A. BRONCOS FAN]

Still pimping the same old disingenuous argument where you confuse the nominal tax rate with the effective tax rate (i.e., what the corporations whose interests are paramount in your world actually pay?)

You have no shame. tsk tsk

[cutthemdown]

http://news.yahoo.com/president-attack-romney-tax-proposal-supported-members-own-153247595--abc-news-politics.html


Another article how most of the world uses a territorial tax system but we don't. Even Bill Clinton has endorsed a way to let businesses bring this money back to America without getting taxed 30 plus percent. Until we do we are missing out on a ton of money that could come back to the USA.

The problem is they outsource, but don't bring money home because they get taxed to much on it. So they create offshore accounts and it never makes its way back to the USA. Obama, he thinks he can tax more but it won't work.

[Drek]

This is some disingenuous bull**** you're swallowing, FYI.

Companies hide foreign assets abroad, never pay a penny of tax on it, then bitch because when they bring it home they'll have to pay taxes on it?

I'm sorry, but I can't do that as a middle class person. If I work in another state I can't tell my home state they aren't entitled to that money without providing proof that I already paid another state income tax on it, and even then it depends on the interstate agreements on whether I'll get taxed or not.

These companies provide no proof that they've ever paid a first world economy tax rate on this income and still want everyone to look the other way when they bring it back.

If we had a territorial tax system and any company could shift foreign earnings back to the U.S. without any tax penalty why wouldn't they move just as much production and the like overseas as possible, to less regulated, weaker countries whom they can effectively bully into a zero tax structure? Territorial tax would open the flood gates to multinational corporations to completely loot the U.S. and begin dancing around the globe, going to whatever company will most sell out worker and environmental standards in order to be the employee group of the week.

The corporate tax rate does need to come down, but it also needs to have ALL tax credits and exemptions that are not directly tied to American job growth removed. A straight up 25% tax rate with 1% tax reduction for every 1% of your workforce, materials, and subcontractors above 75% that are employed in America would be an ideal model. If you're a small business and employ 100% American workers you literally pay zero taxes. If you're a small "workforce" company like Apple but choose to offshore all your manufacturing all of those manufacturing jobs count against you, likely putting them very close to their full 25% tax burden.

Remove special provisions for capital gains and tax it like income with a write off for losses.

Do that and the tax system in this country would work a hell of a lot better.

[Rigs11]

http://www.bloomberg.com/news/2012-07-22/romney-outsmarts-obama-in-fight-over-multinational-taxes.html

plan for taxing multinational corporations would create 800,000 jobs, according to President Barack Obama.

“There’s only one problem,” the president added at a speech in Ohio last week. “The jobs wouldn’t be in America. They’d be in other countries.” That clever remark kicked off a week of sparring between the two candidates and their surrogates about the right way to tax corporations.

On this count, the president is wrong. Investment and job growth abroad don’t necessarily mean job losses in the U.S. And more importantly, Romney’s plan to tax multinational corporations only on the income they earn domestically is on the right track.

Properly structured, and combined with a lower corporate- income-tax rate, a so-called territorial system could make U.S. companies more competitive, simplify the tax code, reduce compliance costs, boost real wages and enable companies to repatriate the more than $1.2 trillion they are now holding abroad for fear of the tax man.





Yeah but LABF and Obama says our corporation aren't paying enough. 35%. The on top of that when shareholders make money off the corporations stock they want to raise that tax also. Why don't liberals see this?

not this shet again. the tax rate is 35%, but after deductions and loopholes corps pay on average 12%. Why can't righties see this?

[BroncoInferno]

not this shet again. the tax rate is 35%, but after deductions and loopholes corps pay on average 12%. Why can't righties see this?

Facts are anathema to right-wingers. Like Stephen Colbert said, "Reality has a well known liberal bias."

[cutthemdown]

You guys don't get it. Without changing the rules we will never see any of that money and it stays offshore forever.

[55CrushEm]

not this shet again. the tax rate is 35%, but after deductions and loopholes corps pay on average 12%. Why can't righties see this?

The average effective rate is actually 28%......but I see that you make up your own stats.....once again.

[55CrushEm]

Facts are anathema to right-wingers. Like Stephen Colbert said, "Reality has a well known liberal bias."

Sorry BI.....I already schooled Rigs on his "facts" earlier.....he's the one choosing to ignore. He keeps spouting 12%......it's 28%, but hey.....what's a measly 16% difference, when trying to prove a point?

I'll post it again......

http://www.dailyfinance.com/2012/02/23/corporate-taxes-a-mess-begging-to-be-cleaned-up/

Ignore it for a few more days (again), Rigs.....then repost what ever number you want. Isn't that the M.O. ?

[barryr]

Facts are anathema to right-wingers. Like Stephen Colbert said, "Reality has a well known liberal bias."

But you have all the facts? Right.

[L.A. BRONCOS FAN]

The average effective rate is actually 28%......but I see that you make up your own stats.....once again.

:bs:

The fact that many major U.S. corporations pay NO taxes after taking advantage of loopholes has been well-publicized.

That you would deny this is just staggering. :crazy:

[L.A. BRONCOS FAN]

- BANK OF AMERICA: In 2009, Bank of America didn’t pay a single penny in federal income taxes, exploiting the tax code so as to avoid paying its fair share. “Oh, yeah, this happens all the time (http://www.mcclatchydc.com/2010/03/26/91119/bank-of-america-wells-fargo-might.html),” said Robert Willens, a tax accounting expert interviewed by McClatchy. “If you go out and try to make money and you don’t do it, why should the government pay you for your losses?” asked Bob McIntyre of Citizens for Tax Justice. The same year, the mega-bank’s top executives received pay “ranging from $6 million to nearly $30 million (http://www.charlotteobserver.com/2010/02/27/1276388/bofa-exec-pay-remains-hot-button.html#ixzz1F0IqvuVq).”

- BOEING: Despite receiving billions of dollars from the federal government every single year in taxpayer subsidies from the U.S. government, Boeing didn’t “pay a dime (http://www.ctj.org/pdf/boeing0211.pdf) of U.S. federal corporate income taxes” between 2008 and 2010.

- CITIGROUP: Citigroup’s deferred income taxes for the third quarter of 2010 amounted to a grand total of $0.00 (http://www.wikinvest.com/stock/Citigroup_%28C%29/Data/Deferred_Income_Taxes/2010/Q3). At the same time, Citigroup has continued to pay its staff lavishly. “John Havens, the head of Citigroup’s investment bank, is expected to be the bank’s highest paid executive for the second year in a row (http://www.nytimes.com/2010/09/25/business/25citi.html), with a compensation package worth $9.5 million.”

- EXXON-MOBIL: The oil giant uses offshore subsidiaries (http://wonkroom.thinkprogress.org/2010/04/06/exxon-zero-taxes/) in the Caribbean to avoid paying taxes in the United States. Although Exxon-Mobil paid $15 billion in taxes in 2009, not a penny of those taxes went to the American Treasury. This was the same year that the company overtook Wal-Mart (http://www.autoblog.com/2009/04/20/exxon-mobil-topples-wal-mart-to-sit-atop-fortune-500-list/) in the Fortune 500. Meanwhile the total compensation of Exxon-Mobil’s CEO the same year was over $29,000,000 (http://www.companypay.com/executive/compensation/exxon-mobil-corp.asp?yr=2010).

- GENERAL ELECTRIC: In 2009, General Electric — the world’s largest corporation (http://www.richestpersons.net/top-10-biggest-companies-in-the-world/) — filed more than 7,000 tax returns and still paid nothing to U.S. government. They managed to do this by a tax code (http://wonkroom.thinkprogress.org/2009/04/22/corporate-tax-offshore/) that essentially subsidizes companies for losing profits and allows them to set up tax havens overseas. That same year GE CEO Jeffery Immelt — who recently scored a spot (http://www.bloomberg.com/news/2011-01-21/obama-taps-ge-s-immelt-for-economy-panel-replace-volcker.html) on a White House economic advisory board — “earned total compensation of $9.89 million (http://online.wsj.com/article/SB10001424052748704869304575103960593817310.html). ” In 2002, Immelt displayed his lack of economic patriotism, saying, “When I am talking to GE managers, I talk China, China, China, China, China (http://www.youtube.com/watch?v=suN-9FrBi7E)….I am a nut on China. Outsourcing from China is going to grow to 5 billion.”

- WELLS FARGO: Despite being the fourth largest bank (http://www.americanconsumernews.com/2010/03/no-taxes-for-bank-of-america-nyse-bac-and-wells-fargo-nysewfc.html) in the country, Wells Fargo was able to escape paying federal taxes by writing all of its losses off after its acquisition of Wachovia. Yet in 2009 the chief executive of Wells Fargo also saw his compensation “more than double” as he earned “a salary of $5.6 million paid in cash (http://www.reuters.com/article/2010/03/03/us-wellsfargo-stumpf-idUSTRE6225P020100303) and stock and stock awards of more than $13 million.”

[L.A. BRONCOS FAN]

26 Major Corporations Paid No Corporate Income Tax For The Last Four Years, Despite Making Billions In Profits (http://thinkprogress.org/economy/2012/04/09/460519/major-corporations-no-taxes-four-year/)

By Pat Garofalo (http://thinkprogress.org/author/pat-g/) on Apr 9, 2012 at 12:00 pm


Last year, Citizens for Tax Justice found that 30 major corporations had made billions of dollars in profits while paying no federal income tax (http://thinkprogress.org/economy/2011/11/03/360185/30-corporations-no-taxes/) between 2008 and 2010. Today, CTJ updated that report to reflect the 2011 tax bill of those 30 companies, and 26 of them have still managed to pay absolutely nothing (http://www.ctj.org/pdf/notax2012.pdf) over that four year period: – 26 of the 30 companies continued to enjoy negative federal income tax rates. That means they still made more money after tax than before tax over the four years!
– Of the remaining four companies, three paid four year effective tax rates of less than 4 percent
(specifically, 0.2%, 2.0% and 3.8%). One company paid a 2008-11 tax rate of 10.9 percent.

– In total, 2008-11 federal income taxes for the 30 companies remained negative, despite $205 billion in pretax U.S. profits. Overall, they enjoyed an average effective federal income tax rate of –3.1 percent over the four years.
Amongst the 30 are corporate titans such as General Electric, Boeing, Verizon, and Mattel. The only four companies that slipped into positive tax territory were DTE Energy, Honeywell, Wells Fargo, and DuPont, with DuPont the only one that paid more than 4 percent (http://www.ctj.org/pdf/notax2012.pdf) over the four years.

Corporate taxes in the U.S., contrary to the constant protestations of conservatives (http://thinkprogress.org/economy/2012/03/30/456005/reminder-corporate-taxes-very-low/), are at a 40 year low (http://thinkprogress.org/economy/2012/02/03/418171/corporate-taxes-40-year-low/), with many of the most profitable companies paying nothing at all. CTJ noted that “had these 30 companies paid the full 35 percent corporate tax rate over the 2008-11 period, they would have paid $78.3 billion more in federal income taxes.” And this is not a problem that only afflicts the U.S., as the UK found out last week that online retailer Amazon made billions in sales in 2011, while paying nothing in corporate taxes (http://thinkprogress.org/economy/2012/04/05/459188/amazon-uk-tax-dodging/).

[El Minion]

Sorry BI.....I already schooled Rigs on his "facts" earlier.....he's the one choosing to ignore. He keeps spouting 12%......it's 28%, but hey.....what's a measly 16% difference, when trying to prove a point?

I'll post it again......

http://www.dailyfinance.com/2012/02/23/corporate-taxes-a-mess-begging-to-be-cleaned-up/

Ignore it for a few more days (again), Rigs.....then repost what ever number you want. Isn't that the M.O. ?

From your own link:


In 1945, corporate taxes were roughly equal to personal income taxes, raising $16 billion and $18 billion, respectively. Today, the difference is tremendous. Personal income taxes in 2011 totaled $1.1 trillion, while corporate taxes brought in $181 billion -- a difference of sixfold. As a percentage of all federal taxes, corporate taxes fell from more than 30% in the 1950s to 6.6% in 2009.

At the same time, those complaining that corporate taxes are too high may have a point. Compared with other industrialized countries, the U.S. has one of the highest effective tax rates:

This is no way to compete on a global scale.

But there's one problem with this table: The U.S.' average corporate tax rate masks volatility among businesses. Some U.S. corporations get away without paying any taxes at all, while other have rates far above the average.

[cutthemdown]

The average effective rate is actually 28%......but I see that you make up your own stats.....once again.

And its a skewed avg. Most companies not leveraged overseas with enough profit out of the country to do what GE and other companies do to offshore money.

So that 28%, or even if it was the BS number 12% is skewed. It really means some big companies paying nothing, smaller domestic based corps getting hammered.

This is about broadening the tax base. Like I said even Bill Clinton talks about changing to a territorial based tax for corportations, where you pay different rates when you make the money outside the country.

The reason we want those almost nothing is otherwise they don't bring that money back to the USA. But when you set them at 35% they just offshore it, it never comes home.

Clinton goes on to say we have to close loopholes also. I'm not smart enough to know what those are, but it's obvious that the way system is now, they aren't bringing that money back to the USA.

You can't change this by trying to go to war with them. If you try and make provisions like tax increases unless you use more expensive american labor, you are playing with fire IMO.

Go ahead and try it. When you get inflation out your ass and know one can afford to buy johnny a laptop, don't come crying to the repubs.

[L.A. BRONCOS FAN]

^

Amazing how people like you can simply ignore facts when those facts get in the way of their fairy tales...

26 Major Corporations Paid No Corporate Income Tax For The Last Four Years, Despite Making Billions In Profits (http://thinkprogress.org/economy/2012/04/09/460519/major-corporations-no-taxes-four-year/)

[cutthemdown]

From your own link:

Yep some get away without paying anything, others get hammered. So the lefts idea is to raise tax on companies who don't hire americans in america, and lower it for those who do. Seriously Minion you agree with that?

No what we need is a new corp tax structure just like Romney is saying. By lowering the tax rate for money made outside the country, you encourage it to be brought home.

Right now we have big multinational companies, with tons of foreign earned money, who simply don't bring it back to the USA and pay tax on it. We need that money even if all that happens with it is rich people spend it.

So these numbers were the left says they only pay 20% not 35% after loopholes misses the point. The point is some companies getting away with murder, others getting hammered. Thats not a smart system IMO.

We need a change.

First we change the rate to like 15% Remember you are also going to tax shareholders who make money off the stock, so this corp money gets taxed again. Keep capital gains also around 15%.

Then for money made outside the USA make the rate like 10% but then do a bold stimulus by giving a 6 month window of 1% tax on offshore profits. Trillions would poor back into the USA and the govt would get a small slice right away. But then all that money coming in, some would get reinvested, some put into banks, some spent, it would be a great thing.

Seriously these ideas were talked about by Bill Clinton. They aren't radical right wing ideas.

This is just brainstorming trying to see how to get that money, made from outsourcing jobs, made from investing overseas, back into the USA.

The lefts idea is the hammer, lets **** rich people, lets raise capital gains, lets make war on big biz. I think you need a carrot.

[cutthemdown]

Most of the problems our economy is having is because rich people are spending way way less money. We are a consumer driven economy, a service economy, and the biggest spenders not spending right now.

You really don't think tax is only income tax right? The really money to be made is sales tax that goes to local govts. Without rich spending they are broke.

[cutthemdown]

^

Amazing how people like you can simply ignore facts when those facts get in the way of their fairy tales...

26 Major Corporations Paid No Corporate Income Tax For The Last Four Years, Despite Making Billions In Profits (http://thinkprogress.org/economy/2012/04/09/460519/major-corporations-no-taxes-four-year/)

Not disputing that. But how many corporations do you think we have? 26 big ones pay nothing, but most can't do that. To create growth with have to find a way to make those big companies want to bring that money back.

Whats your plan just take it from them and arrest them all?

[Rigs11]

The average effective rate is actually 28%......but I see that you make up your own stats.....once again.

Nope,you are still wrong.It has fallen to 12% of paid taxes genius.


BY DAMIAN PALETTA

WASHINGTON—U.S. companies are booking higher profits than ever. But the number crunchers in Washington are puzzling over a phenomenon that has just come into view: Corporate tax receipts as a share of profits are at their lowest level in at least 40 years.

Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That's the lowest level since at least 1972. And well below the 25.6% companies paid on average from 1987 to 2008.

Corporate income-tax receipts typically fall during recessions, ...



http://online.wsj.com/article/SB10001424052970204662204577199492233215330.html








http://online.wsj.com/article/SB10001424052970204662204577199492233215330.html

[L.A. BRONCOS FAN]

Whats your plan just take it from them and arrest them all?

The plan is to (a) roll back the Reagan tax cuts, (b) eliminate ALL tax loopholes for corporations, (c) eliminate taxpayer-funded subsidies for corporations, (d) reinstate the windfall profits tax, and (e) establish/enforce strict penalties for non-compliance.

[L.A. BRONCOS FAN]

Nope,you are still wrong.It has fallen to 12% of paid taxes genius.


BY DAMIAN PALETTA

WASHINGTON—U.S. companies are booking higher profits than ever. But the number crunchers in Washington are puzzling over a phenomenon that has just come into view: Corporate tax receipts as a share of profits are at their lowest level in at least 40 years.

Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That's the lowest level since at least 1972. And well below the 25.6% companies paid on average from 1987 to 2008.

Corporate income-tax receipts typically fall during recessions, ...



http://online.wsj.com/article/SB10001424052970204662204577199492233215330.html








http://online.wsj.com/article/SB10001424052970204662204577199492233215330.html

Like the rest of the Bush Youth, he simply doesn't know history well enough to have a clue what he's talking about.

When the U.S. was an economic powerhouse, the top tax rate was ~70-90%.
Not a coincidence.

Makes you wonder where these right-wing idiots think our roads, bridges, airports, hospitals, Interstate highway system, etc., came from. :rofl:

[Rigs11]

Like the rest of the Bush Youth, he simply doesn't know history well enough to have a clue what he's talking about.

When the U.S. was an economic powerhouse, the top tax rate was ~70-90%.
Not a coincidence.

Makes you wonder where these right-wing idiots think our roads, bridges, airports, hospitals, Interstate highway system, etc., came from. :rofl:

He's a professor,he "schooled" meHilarious!

[cutthemdown]

The plan is to (a) roll back the Reagan tax cuts, (b) eliminate ALL tax loopholes for corporations, (c) eliminate taxpayer-funded subsidies for corporations, (d) reinstate the windfall profits tax, and (e) establish/enforce strict penalties for non-compliance.

You can't end loopholes then enforce a 35% worldwide tax LABF.

[L.A. BRONCOS FAN]

You can't end loopholes then enforce a 35% worldwide tax LABF.

If you believe this, then you obviously don't know history.

https://sphotos-b.xx.fbcdn.net/hphotos-ash3/531178_449705185051352_1228313608_n.jpg

[Drek]

Most of the problems our economy is having is because rich people are spending way way less money. We are a consumer driven economy, a service economy, and the biggest spenders not spending right now.

You really don't think tax is only income tax right? The really money to be made is sales tax that goes to local govts. Without rich spending they are broke.

You should really do some research.

Never in the entire time of this country have the most wealthy people spent anything close to the same percentage of income as the rest of the economic strata.

Never have we seen greater earnings or tax cuts for the wealthiest people directly lead to more spending on their part.

Instead, we consistently see tax evasion regardless of tax rates. All lowering the tax rate will do is lower the effective tax rate those people pay.

If you want to power a consumer driven economy you need to enfranchise the largest consumer base, the middle class. That is why when our top tax brackets were in the 65-85% range this nation was at it's most successful. The tax rates on the middle class were much more moderate and a larger percentage of the population was in the middle class. End result was a nation that had the financial muscle to build real infrastructure and do real R&D at home while the middle class worked good jobs and poured that money back into the economy.

It was a brief progressive boom born out of the New Deal and now we're seeing the nation get dragged back to the days of economic baronies where worker rights depend entirely on the benevolence of your employer. Its a march towards corporate feudalism and nothing short of it.

[cutthemdown]

If you all get your way the economy will nose dive, we will get inflation, and even more people will be out of work.

[BroncoInferno]

If you all get your way the economy will nose dive, we will get inflation, and even more people will be out of work.

That kind of economic destruction is exactly what your way (tax breaks for the rich, deregulation) has already accomplished. And your dumbass wants to double-down on policies that put us into this mess.

[TonyR]

Most of the problems our economy is having is because rich people are spending way way less money. We are a consumer driven economy, a service economy, and the biggest spenders not spending right now.

You really don't think tax is only income tax right? The really money to be made is sales tax that goes to local govts. Without rich spending they are broke.

I think you have it exactly backwards. The "wealthy", in general, are spending "normally". It's the other 90% who have suffered stagnating wages, unemployment, and underemployment who aren't spending normally. These same people are also harder hit by rising prices on things like gas and food. When filling you gas tank takes a big chunk out of your paycheck you don't have disposable income to spend on other things. The wealthy? Higher has prices really aren't slowing them down. I've seen no decline in the numbers of Bimmers and Benzes on the road around my area. In fact, to the contrary.

[55CrushEm]

From your own link:

And? The average effective rate that corporations paid on their pre-tax income is 28%.....not 12%. Nothing I said was wrong.

If you want to talk about corporate taxes as a % of TOTAL FEDERAL TAXES, that's an entirely different thing.

And yes, it's going down.......i.e. individuals pay more of the pie, and corporations pay less. I've already said that I'd be a proponent of eliminating corporate taxes ENTIRELY. A) it's a small piece of the federal revenue pie, and B) businesses would come to the U.S. in droves to take advantage of it.

[55CrushEm]

Nope,you are still wrong.It has fallen to 12% of paid taxes genius.


BY DAMIAN PALETTA

WASHINGTON—U.S. companies are booking higher profits than ever. But the number crunchers in Washington are puzzling over a phenomenon that has just come into view: Corporate tax receipts as a share of profits are at their lowest level in at least 40 years.

Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That's the lowest level since at least 1972. And well below the 25.6% companies paid on average from 1987 to 2008.

Corporate income-tax receipts typically fall during recessions, ...



http://online.wsj.com/article/SB10001424052970204662204577199492233215330.html








http://online.wsj.com/article/SB10001424052970204662204577199492233215330.html

Read that short piece again, "genius". It says from "activities WITHIN the U.S.". And yes, they are segregated when you file your corporate returns.....and yes, U.S. corporations pay tax on profits/cash earned on foreign soil when those profits/cash are REPATRIATED into the U.S.! So apparently, your little piece doesn't account for that.

Furthermore, companies aren't repatriating cash (and therefore not paying tax on it) from their foreign subsidiaries as much as they have in the past few years for a couple of reasons.....1) they are already sitting on cash now, so they don't "need" the extra, and 2) the federal government allowed a one-time "freebie" I believe in 2010, could've been in 2009, in which they allowed U.S. corporation to repatriate up to $50 million (maybe there was no cap, I forget) tax-free.

[Drek]

If you all get your way the economy will nose dive, we will get inflation, and even more people will be out of work.

The trickle down concept you're talking about already caused the great depression, multiple smaller recessions, and this most recent "great recession".

You should stop trusting what wealthy heirs tell you is best your you and look at the obvious signs of history. When the middle class is empowered society thrives.

Middle class empowerment through mercantilism gave us the renaissance.

Middle class empowerment via the freedom of colonization and a recently freed United States was the key stimulus that created the industrial revolution.

Middle class empowerment post-WWII via the New Deal, infrastructure expansion, and strong unions created the "golden age" that so many conservatives wish would return without accepting why that period of time occurred in the first place.

Trick down, in the words of the best republican president since Eisenhower (George H.W. Bush) is "voodoo economics". Trickle up is the path to prosperity. Tax the wealthiest and turn that money back into infrastructure, schools, and technological advancement. The taxes paid by those wealthiest individuals will filter back to them through those very same programs, but only after they actually create jobs to meet the increased demand.

This is the big myth in the equation if you ask me. All the money will go through the wealthiest 1% no matter what we do. Consumer spending trickles up, government spending trickles up. It all trickles up to the corporations and banks owned by the wealthiest 1%. The real question is how easily we're going to let them hoard it, creating all these theoretical inflationary bubbles as billions or trillions of dollars disappear from the national and global economies.

If instead of allowing that pointless hoarding we instead create a system in which the money is cycled back into the economy through the middle class we let everyone else in this nation have their share of the real GDP before we let the wealthy lock up their share.

Failure to shrink the widening wealth divide in this nation is the biggest failure of the federal government over the last 30+ years.

[55CrushEm]

The trickle down concept you're talking about already caused the great depression, multiple smaller recessions, and this most recent "great recession".

You should stop trusting what wealthy heirs tell you is best your you and look at the obvious signs of history. When the middle class is empowered society thrives.

Middle class empowerment through mercantilism gave us the renaissance.

Middle class empowerment via the freedom of colonization and a recently freed United States was the key stimulus that created the industrial revolution.

Middle class empowerment post-WWII via the New Deal, infrastructure expansion, and strong unions created the "golden age" that so many conservatives wish would return without accepting why that period of time occurred in the first place.

Trick down, in the words of the best republican president since Eisenhower (George H.W. Bush) is "voodoo economics". Trickle up is the path to prosperity. Tax the wealthiest and turn that money back into infrastructure, schools, and technological advancement. The taxes paid by those wealthiest individuals will filter back to them through those very same programs, but only after they actually create jobs to meet the increased demand.

This is the big myth in the equation if you ask me. All the money will go through the wealthiest 1% no matter what we do. Consumer spending trickles up, government spending trickles up. It all trickles up to the corporations and banks owned by the wealthiest 1%. The real question is how easily we're going to let them hoard it, creating all these theoretical inflationary bubbles as billions or trillions of dollars disappear from the national and global economies.

If instead of allowing that pointless hoarding we instead create a system in which the money is cycled back into the economy through the middle class we let everyone else in this nation have their share of the real GDP before we let the wealthy lock up their share.

Failure to shrink the widening wealth divide in this nation is the biggest failure of the federal government over the last 30+ years.

Well written, Drek. I respect your opinion. I also agree that when the middle class has more wealth, the economy does better, as obviously, they are the biggest BASE (highest population) of tax payers.....and by default, spend the most (in the aggregate) within the economy.

Where we disagree is the means to get there. I don't believe in "wealth redistribution". You also can't "punish" businesses into creating more jobs. If you do that, more will simply flee the country. You have to INCENTIVIZE through lower taxes. Again, I'm a proponent of eliminating corporate taxes entirely. They only pay 11-13% or so of the total revenue "pie", as it is. So get rid of corporate taxes, and businesses will flock here.

Furthemore, government spending more and more on infrastructure is not the only barrier between the unemployment we've been facing the past 5 years and complete prosperity. It's not as if we build just a few more roads and bridges, that businesses will all of a sudden say, "Ok. NOW I'm ready to grow! NOW I'm ready to hire."

Where I also disagree with you is when you mention the "wealth divide". It is not government's role, IMO, to create equality of OUTCOME, as I've mentioned before. If everyone in the world had the same wealth, we'd all be poor. You even mentioned that the wealthiest will end up with the most wealth, anyway.....so why the futile attempt by government to "spread it out" by artificial means? The primary method to stimulate and encourage growth and spending in the private sector AT EVERY LEVLE OF INCOME is through tax cuts. The tax code, in its current state, is far too complex and far too cumbersome. There are FAR too many exemptions, loopholes, credits, subsidies, penalties, deductions etc. for most to even comprehend....both at the individual and corporate levels. It needs to be overhauled entirely, and drastically simplified. Although, I doubt it ever will be.

The bottom line is we need to "grow the pie".....and right now the pie isn't really growing. I don't believe the best way to do that is to tax corporations and wealthy MORE. They are the job creators. We need to "re-incentivize" job growth, and encourage more businesses to come to the U.S. You can't provide encouragement through penalties. We're seeing it at the individual level too. A couple of reports came out last week saying that now that France has upped the taxes on income over XX Euros to 70+%....those wealthy people are now simply moving to the more "tax friendly" U.K. And as a result, France will now get NOTHING from those individuals.....compounding their budget problems.

[barryr]

Well written, Drek. I respect your opinion. I also agree that when the middle class has more wealth, the economy does better, as obviously, they are the biggest BASE (highest population) of tax payers.....and by default, spend the most (in the aggregate) within the economy.

Where we disagree is the means to get there. I don't believe in "wealth redistribution". You also can't "punish" businesses into creating more jobs. If you do that, more will simply flee the country. You have to INCENTIVIZE through lower taxes. Again, I'm a proponent of elimination corporate taxes entirely. They only pay 11-13% or so of the total revenue "pie", as it is. So get rid of corporate taxes, and businesses will flock here.

Furthemore, government spending more and more on infrastructure is not the only barrier between the unemployment we've been facing the past 5 years and complete prosperity. It's not as if we build just a few more roads and bridges, that businesses will all of a sudden say, "Ok. NOW I'm ready to grow! NOW I'm ready to hire."

Where I also disagree with you is when you mention the "wealth divide". It is not government's role, IMO, to create equality of OUTCOME, as I've mentioned before. If everyone in the world had the same wealth, we'd all be poor. You even mentioned that the wealthiest will end up with the most wealth, anyway.....so why the futile attempt by government to "spread it out" by artificial means? The primary method to stimulate and encourage growth and spending in the private sector AT EVERY LEVLE OF INCOME is through tax cuts. The tax code, in its current state, is far to complex and far too cumbersome. There are FAR too many exemptions, loopholes, credits, subsidies, penalties, deductions etc. for most to even comprehend....both at the individual and corporate levels. It needs to be overhauled entirely, and drastically simplified. Although, I doubt it ever will be.

The bottom line is we need to "grow the pie".....and right now the pie isn't really growing. I don't believe the best way to do that is to tax corporations and wealthy MORE. They are the job creators. We need to "re-incentivize" job growth, and encourage more businesses to come to the U.S. You can't provide encouragement through penalties. We're seeing it at the individual level too. A couple of reports came out last week saying that now that France has upped the taxes on income over XX Euros to 70+%....those wealthy people are now simply moving to the more "tax friendly" U.K. And as a result, France will now get NOTHING from those individuals.....compounding their budget problems.

Great post! 100% agreed :thumbs::thumbs::thumbs:

[BroncoInferno]

What do you think will "incentivize" corporations to bring jobs back to America, 55CrushEm? Because it seems to me that even if we did drop corporate taxes to 0% as you suggest, that still doesn't change the fact that they can pay workers in China and India 15 cents an hour for manufactoring jobs. Do you expect them to bring those jobs back to America just as an act of good faith, since we did them a solid on the tax rate? I don't see it. Lowering corporate taxes will let them have their cake and eat it, too. They'll just throw their new cash on the pile and either hoard it or invest it overseas, just like now.

[55CrushEm]

What do you think will "incentivize" corporations to bring jobs back to America, 55CrushEm? Because it seems to me that even if we did drop corporate taxes to 0% as you suggest, that still doesn't change the fact that they can pay workers in China and India 15 cents an hour for manufactoring jobs. Do you expect them to bring those jobs back to America just as an act of good faith, since we did them a solid on the tax rate? I don't see it. Lowering corporate taxes will let them have their cake and eat it, too. They'll just throw their new cash on the pile and either hoard it or invest it overseas, just like now.

Good point, BI. Taxes, as I've said before, aren't the only issue....but certainly a large piece of it. When the average EFFECTIVE rate in the U.S. on corporations is 28% (Rigs will keep touting 12% but that doesn't include repatriated profits, and is a SHORT-TERM anomaly due to the recession).....that's a HUGE cost. Imagine my profit before tax being $1 billion....then I have to pay $280 million in taxes.....but now I can keep it all....reinvest it in my company's infrastructure, etc.

It would depend on any companies cost structure. Clearly labor costs are a higher component of the total cost structure for a manufacturing company than it is for a utilities company. My company is a manufacturing company.....and our labor costs run about 36% of revenue....but that also includes corporate overhead and executives salaries.

Therein lies another problem, too......raising the minimum wage in the U.S. doesn't do any good for employment, particularly for small businesses....it HURTS employment. It's a "feel good" tool....nothing more. And you're absolutely right, it's hard to compete with $1/hour wages.....when we are forced to pay 7 or 8 times that here. So, counter with lower/zero taxes. It would help trememdously.

And no, they wouldn't just sit on there cash, as they are doing now. Idle assets do a company no good. Putting cash in the bank will never get you as good a return as reinvesting it in your business will. And in the case of publicly traded companies.....the shareholders wouldn't let that pass once the economy gets going.....they want good RETURN on their investment, and keeping the cash in the bank does not provide that.

[BroncoInferno]

You say they won't hoard their money like they are now. Why not? The problem with these "rational self-interest" dictums are that they are assumptions about how people/corporations behave, but evidence suggests that - rational or not - people/corporations frequently do NOT behave in the "rational" way that conservative thinking assumes they will. Take right now, for instance. Companies are hoarding their money despite record profits. Why are they not reinvesting in the infrastructure of their companies as you claim they will with more money in their pockets? They HAVE more money in their pockets NOW, and are sitting on the pile. Why? Well, we get vague buzz phrases like "climate of uncertainty" to explain it away. Sounds like a lot of bull**** to me.

[Drek]

Where we disagree is the means to get there. I don't believe in "wealth redistribution". You also can't "punish" businesses into creating more jobs. If you do that, more will simply flee the country. You have to INCENTIVIZE through lower taxes. Again, I'm a proponent of eliminating corporate taxes entirely. They only pay 11-13% or so of the total revenue "pie", as it is. So get rid of corporate taxes, and businesses will flock here.
I don't view taxes on the wealthy as wealth redistribution though. Play it out.

We tax the wealthy more in order to have more better paying jobs for the middle class. Those middle class people spend about 90 cents on the dollar back into the economy (probably being generous to the middle class willingness to save with that number). By going back into the economy it is actually going back to corporations, which show greater revenue and greater profit. That profit trickles up to wealthy shareholders.

If you increased taxes on the wealthy by 10% the actual impact on their income as a whole (top earners all lumped into a pool) would likely move by less than 1%, as all of those tax dollars will filter back to them through consumer and gov't. spending. It is in effect only forcing them to treat more of their wealth as liquidity.

Now as for business tax, to some extent I'd agree. I personally think we need to make a zero income tax pathway for small to medium businesses a real possibility, but not through completely removing taxes from businesses in a blanket move.

I personally would like to see a flat tax on all businesses at about 25% (10% less than the current rate) with no cuts other than those based on U.S. employment. For every 1% over 75% of your workforce, suppliers, and subcontractors that are based in North America you get 1% off your tax rate. Therefore if you are 100% American based you would pay zero taxes, simple as that.

Hell, I'd even be in favor of a "first world nations" program where as long as the nation you're sending work to pays a wage comparable to the U.S. and has similar worker and environmental safety regulations you get the exact same tax cut. I'm a strong believer that if you have American workers competing on a truly even footing with any other nation's workforce that the American worker will win handily. But letting companies pay pennies per hour for work done in countries with no safety regulations and no environmental protection framework is making the American worker play a rigged game.

Furthemore, government spending more and more on infrastructure is not the only barrier between the unemployment we've been facing the past 5 years and complete prosperity. It's not as if we build just a few more roads and bridges, that businesses will all of a sudden say, "Ok. NOW I'm ready to grow! NOW I'm ready to hire."
1. The private sector has made back about 90% of the jobs lost during the recession. The public sector has made back almost none of the millions it lost. A large portion of our joblessness is tied to local, state, and federal programs running on skeleton crews. Town maintenance programs are understaffed, schools don't have enough teachers, etc.. There is a lot more needed than just infrastructure.

2. The infrastructure building would put a LOT of the currently unemployed back to work in well paying jobs.

3. I'm not talking about just building bridges and fixing roads. I'm talking about overhauling the electrical grid nationwide so that energy companies be more productive and competitive. Spreading irrigation systems further into the landlocked portions of the midwest and rocky mountain regions to help agriculture and better buffer the nation against natural disasters. Overhauling our nation's ports to once again be the most efficient on the planet. Replacing existing traffic control systems with smart systems that would speed up the flow of traffic in major cities across the nation, reducing congestion that leads to corporate downtime and reduce traffic accidents (#1 workplace injury for general industry).

There are a TON of infrastructure products we could start that would not only put people back to work, they would also have major impacts on improving corporate productivity.

Take the energy grid for example. Recent studies suggest that our nation's corporations lose a minimum of $50B a year of productivity from brown outs and black outs. An overhauled energy grid is estimated to cost about that much in total. That $50B also doesn't even factor in the energy loss due to outdated transmission technology. But good luck convincing any one energy company that it's in their interest to spend even the $1-$2B to overhaul their own portion of it.

A superior energy grid is more efficient, more reliable, and allows for more competition in providing power across our nation. Its a universal win that should have happened 10 years ago. But it, like the highway system, is a project that can only happen if the federal government steps up to the plate and makes it happen.

Where I also disagree with you is when you mention the "wealth divide". It is not government's role, IMO, to create equality of OUTCOME, as I've mentioned before. If everyone in the world had the same wealth, we'd all be poor. You even mentioned that the wealthiest will end up with the most wealth, anyway.....so why the futile attempt by government to "spread it out" by artificial means?
We have a difference of viewpoint on closing the wealth divide. I'm not talking about bringing the wealthy down closer to the middle class, or even bringing the middle class up closer to the wealthy. I'm talking about reversing the trend of a shrinking middle class and growing lower class. At the time of J.D. Rockefeller's death he handed over to his family a fortune that, when adjusted for inflation, would outclass the wealthiest person on the planet since. Yet at the time of his death there was far less economic divide in this nation than there is now, and the nation was about to take a massive economic step forward from the early 40's all the way into the 60's. How could that be the case? Because the nation was primarily composed of a healthy working middle class at that point.

It isn't about tearing the wealthy down or propping the middle class up. Its about eliminating the lowest economic tier and getting everyone to have some skin in the game.

The primary method to stimulate and encourage growth and spending in the private sector AT EVERY LEVLE OF INCOME is through tax cuts. The tax code, in its current state, is far to complex and far too cumbersome. There are FAR too many exemptions, loopholes, credits, subsidies, penalties, deductions etc. for most to even comprehend....both at the individual and corporate levels. It needs to be overhauled entirely, and drastically simplified. Although, I doubt it ever will be.
I agree that our tax system is too convoluted, but I disagree that tax cuts are the best way to stimulate the economy. That results in nothing more than a race to the economic bottom if every time there is a recession we cut taxes and then never raise them back up during better times. That leads to where we are now, a nation of ballooning deficits and very little income to meaningfully reduce them.

Tax cuts spur economic growth because they bring liquidity of assets. The same can be done by taxing those who hold the majority of the stagnant assets (the wealthiest people) and turning that money back into the economy, knowing that the majority of that money will eventually trickle back up to the wealthy anyway, after it greases the wheels of the economy.

The bottom line is we need to "grow the pie".....and right now the pie isn't really growing.
But this means the pie can never stop growing, which just isn't possible. We as a nation have stagnant to negative population growth now. We shouldn't need to grow the pie to provide all of our citizens with a good standard of living. The pie should be divided up in a good fashion already and any growth of the pie should be the rising tide that lifts all ships.

I don't believe the best way to do that is to tax corporations and wealthy MORE. They are the job creators. We need to "re-incentivize" job growth, and encourage more businesses to come to the U.S. You can't provide encouragement through penalties.
But the wealthiest aren't creating jobs, they're just hoarding the money. All metrics point to this. A recent study indicates that there is over $21 Trillion dollars hidden in blind bank accounts. That is more than the annual GDP of the U.S. and Japan combined. It has also just about doubled in less than a decade. How exactly is that helping to spur job growth?

Relying on the magnanimity of the wealthy is a fool's attempt at job creation. You're basically asking for charity at that point. The only way to encourage the wealthy to create jobs is by putting an offer on the table where job creation leads to more profit. That requires work, and work requires money to do so. The best place to get that money to fund said work is the greatest source of stagnant assets, the wealthy. See how that cycle works? As long as the stick of "we won't create more jobs!" is an effective weapon against taxation we'll be stuck in this downward spiral.

When H.W. Bush's hand was forced to raise taxes to climb out of the early 90's recession his biggest increase was on the top earners. The economy began to recover shortly after. When Clinton raised taxes he again increased the top tax rate and the economy prospered. When W. Bush cut taxes across the board but primarily for the wealthy we began this latest nosedive. See a trend here?

Hell, to put it most simply, if you aren't taxing the wealthy enough to make reinvestment a better play then you aren't taxing them enough. Right now we're well below that threshold.

We're seeing it at the individual level too. A couple of reports came out last week saying that now that France has upped the taxes on income over XX Euros to 70+%....those wealthy people are now simply moving to the more "tax friendly" U.K. And as a result, France will now get NOTHING from those individuals.....compounding their budget problems.
No one is suggesting we go back to the 40's/50's/60's era tax rates. The threshold has historically sat somewhere in the 40-50% range, there is absolutely no need to go above that.

Personally I would favor a plan that ties our top tax rate directly to our national deficit, making the wealthiest Americans the watchdogs of fiscal prudence, not the benefactors of federal bail outs and other largess.

Something along the lines of a base tax rate of 35% on those earning over $1M a year with a flex inducer where after the first 10% of GDP the federal gov't. carries we raise the top earner tax rate 1% for ever 10% of GDP we're in debt.

So right now with our debt at 103% of GDP we would have a 9.3% increase over the 35% baseline, for an effective rate of 44.3%.

That, coupled with a "general funds war chest" initiative where the gov't., when running a surplus, is required to stockpile up to 10% of GDP in available assets, would remove the debtor nation mindset. We would no longer see bank bailout heists like we have of late because the wealthiest would understand that tacking an extra $1T onto the national debt would only drive their tax rates up in the long run and therefore would actively work against it.

Again, another way to make sure everyone has real skin in the game.

[55CrushEm]

You say they won't hoard their money like they are now. Why not? The problem with these "rational self-interest" dictums are that they are assumptions about how people/corporations behave, but evidence suggests that - rational or not - people/corporations frequently do NOT behave in the "rational" way that conservative thinking assumes they will. Take right now, for instance. Companies are hoarding their money despite record profits. Why are they not reinvesting in the infrastructure of their companies as you claim they will with more money in their pockets? They HAVE more money in their pockets NOW, and are sitting on the pile. Why? Well, we get vague buzz phrases like "climate of uncertainty" to explain it away. Sounds like a lot of bull**** to me.

That's an easy one, BI. I've seen it happen at one of my old employers. We totally miscalculated the spending patterns of our customers.....we went ahead and spent over $300 million in one year on capital expenditures (expanding our laboratory space, etc.).....and the market we were in dried up. Bad timing. But you can't stop taking the depreciation expense just because your customers slowed their spending.

Do you think companies want to spend billions on capex and infrastructure (i.e. expand their CAPACITY)....when their current capacity isn't even being filled. They wouldn't reap any benefit from it right now. You don't keep building and increasing inventory (idle asset) if nobody's going to buy it (due to a slugging economy).

[BroncoInferno]

55CrushEm - I definitely agree that incentives need to be created to spur the economy, I just think we have a fundamentally different view on how to incentivize. The opinion of yourself and other conservatives seems to be that tax cuts are incentive enough. Just hand them over the money, and cross your fingers and hope that they will invest the money the way you want them to. I don't see that method working. I prefer the carrot-and-stick approach. Drek gave a great example of the sort of thing I think we should try. Lower the corporate tax rate to 25% with no loopholes and offer tax breaks for employing an American work force up to 0% for a fully American staffed firm. That kind of incentive guarantees the outcome you want. No-strings-attached tax cuts leaves too much up to theory.

[55CrushEm]

I don't view taxes on the wealthy as wealth redistribution though. Play it out.

We tax the wealthy more in order to have more better paying jobs for the middle class.
Tax the wealthy more to have more jobs? How? Government created jobs? This is a means of "redistribution". Taxing the wealthy/corporations more will give the LESS money to create those jobs through the private sector.

Those middle class people spend about 90 cents on the dollar back into the economy (probably being generous to the middle class willingness to save with that number). By going back into the economy it is actually going back to corporations, which show greater revenue and greater profit. That profit trickles up to wealthy shareholders.

If you increased taxes on the wealthy by 10% the actual impact on their income as a whole (top earners all lumped into a pool) would likely move by less than 1%, as all of those tax dollars will filter back to them through consumer and gov't. spending. It is in effect only forcing them to treat more of their wealth as liquidity.
You've got a lot of numbers and percentages in here.....I'd like to see where you got them. What I can tell you is that if we taxed the top 1% of earners another 10% of their AGI.....it would only raise about another $100 billion (this has all the figures http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html#_grp1).....a drop in the bucket compared to our current deficit. And that's assuming they don't give up their citizenship. You simply can't assume that you can tax people endlessly and also assume that their behaviors won't change.....we're seeing it elsewhere as in the France example.

Now as for business tax, to some extent I'd agree. I personally think we need to make a zero income tax pathway for small to medium businesses a real possibility, but not through completely removing taxes from businesses in a blanket move.

I personally would like to see a flat tax on all businesses at about 25% (10% less than the current rate) with no cuts other than those based on U.S. employment. For every 1% over 75% of your workforce, suppliers, and subcontractors that are based in North America you get 1% off your tax rate. Therefore if you are 100% American based you would pay zero taxes, simple as that.
TOTALLY agree.....and this is an example of how tax cuts INCENTIVIZE and stimulate more business ACTIVITY.

Hell, I'd even be in favor of a "first world nations" program where as long as the nation you're sending work to pays a wage comparable to the U.S. and has similar worker and environmental safety regulations you get the exact same tax cut. I'm a strong believer that if you have American workers competing on a truly even footing with any other nation's workforce that the American worker will win handily. But letting companies pay pennies per hour for work done in countries with no safety regulations and no environmental protection framework is making the American worker play a rigged game.
Agreed again. Although, not sure how that would work.....the U.S. can't exactly impose it's working environment regulations on other countries.....but if they're willing to play ball.....why not try.

The private sector has made back about 90% of the jobs lost during the recession. The public sector has made back almost none of the millions it lost. A large portion of our joblessness is tied to local, state, and federal programs running on skeleton crews. Town maintenance programs are understaffed, schools don't have enough teachers, etc.. There is a lot more needed than just infrastructure.
I would like to see the data on this.....not because I don't believe you.....but because the breakout of private vs. government jobs is important to me and key in regards to the arguments we're making.

2. The infrastructure building would put a LOT of the currently unemployed back to work in well paying jobs.

3. I'm not talking about just building bridges and fixing roads. I'm talking about overhauling the electrical grid nationwide so that energy companies be more productive and competitive. Spreading irrigation systems further into the landlocked portions of the midwest and rocky mountain regions to help agriculture and better buffer the nation against natural disasters. Overhauling our nation's ports to once again be the most efficient on the planet. Replacing existing traffic control systems with smart systems that would speed up the flow of traffic in major cities across the nation, reducing congestion that leads to corporate downtime and reduce traffic accidents (#1 workplace injury for general industry).

There are a TON of infrastructure products we could start that would not only put people back to work, they would also have major impacts on improving corporate productivity.
Drek....here's where we're gonna diverge a bit more. Why does it have to be the responsibility of government to build all infrastructure? Cell phone companies put up their own towers. Some (not all) utility companies put up their own grids/poles/etc. Other utility companies can put up wind farms....if they choose. All of this spending does NOT need to be done by government....and I would argue it would be done in a more cost efficient manner if it were NOT done by government.

The other point I'll make here is corporate productivity isn't down now because there isn't enough infrastructure or capacity. Companies have too much capacity (see example of my former company). You build up capacity to meet demand, but when demand dries up......you have "over capacity"....i.e. too much costs and not enough revenue....as a result perforamance suffers, stock goes down......etc etc.

A superior energy grid is more efficient, more reliable, and allows for more competition in providing power across our nation. Its a universal win that should have happened 10 years ago. But it, like the highway system, is a project that can only happen if the federal government steps up to the plate and makes it happen.
Agreed......except I would say 20-30 years ago....not 10. And I would also say it can only happen if the federal government ALLOWS it to happen. Should we drill for oil in ANWR? Should we allow hydro-fracking to continue? Environmentalist would say no. I yell a resounding "YES". We need more power. We also need more refineries.


We have a difference of viewpoint on closing the wealth divide. I'm not talking about bringing the wealthy down closer to the middle class, or even bringing the middle class up closer to the wealthy. I'm talking about reversing the trend of a shrinking middle class and growing lower class. At the time of J.D. Rockefeller's death he handed over to his family a fortune that, when adjusted for inflation, would outclass the wealthiest person on the planet since. Yet at the time of his death there was far less economic divide in this nation than there is now, and the nation was about to take a massive economic step forward from the early 40's all the way into the 60's. How could that be the case? Because the nation was primarily composed of a healthy working middle class at that point.

It isn't about tearing the wealthy down or propping the middle class up. Its about eliminating the lowest economic tier and getting everyone to have some skin in the game.
I agree that we had a healthier middle class before......but we've also talked about some of the reasons that has eroded.....e.g. wage competition from foreign coutries "pulling" out manufacting jobs, more favorable corporate taxes in foreign countries also pulling out jobs, etc.

Everyone would like to see the poverty level go down.....but you don't achieve that by getting more people on welfare and food stamps, which is what is happening. The LESS people depend on government, the better. Wouldn't you agree? Which is what makes the welfare reform changes of late even more baffling (but that is another topic). Government CAN NOT eliminate poverty....they never have, and they never will....only a healthy economy can ALLEVIATE it.


I agree that our tax system is too convoluted, but I disagree that tax cuts are the best way to stimulate the economy. That results in nothing more than a race to the economic bottom if every time there is a recession we cut taxes and then never raise them back up during better times. That leads to where we are now, a nation of ballooning deficits and very little income to meaningfully reduce them.
We will disagree in a major way here. First, I will always firmly believe that tax cuts stimulate economic growth. I implore anybody to explain to me how raising taxes stimulates private sector growth. It doesn't. Taxing the wealth doesn't do it. The 10% example doesn't raise anything of substance....and taxing them at 80%......how'd that work out for Carter? Or France right now? You simply can not tax yourself into prosperity.

Furthermore, defecits are a function of spending vs. revenue.....simple math. We don't have deficits because our tax rates are too low.....we have them because our spending is entirely out of control.

Tax cuts spur economic growth because they bring liquidity of assets. The same can be done by taxing those who hold the majority of the stagnant assets (the wealthiest people) and turning that money back into the economy, knowing that the majority of that money will eventually trickle back up to the wealthy anyway, after it greases the wheels of the economy.
Drek, the wealthiest 1% of Americans already pay 37% of all income taxes....in terms of real dollars. How much more do you want them to pay, honestly? The bottom half pay almost nothing. It's all in that IRS link. What makes the tax code "unfair" is all the hundreds of other taxes......gas tax, sales tax, phone tax, excise taxes, real estate taxes, etc, etc, etc. And you can't structure a tax code so that ALL of these ridiculous taxes are based on someone's income. That would make it MORE unfair.


But this means the pie can never stop growing, which just isn't possible. We as a nation have stagnant to negative population growth now. We shouldn't need to grow the pie to provide all of our citizens with a good standard of living. The pie should be divided up in a good fashion already and any growth of the pie should be the rising tide that lifts all ships.
Of course the pie stops growing (recession/depression), and resumes growth, and on and on. I'm not sure where you're getting your population figures but I'm reading the last 2010 census had us at roughly 308 million people, which was up 9.7% from the last 2000 census. In any case, we should WANT to grow the pie....even if population growth was stagnant, to provide a better standard of living for all.

But the wealthiest aren't creating jobs, they're just hoarding the money. All metrics point to this. A recent study indicates that there is over $21 Trillion dollars hidden in blind bank accounts. That is more than the annual GDP of the U.S. and Japan combined. It has also just about doubled in less than a decade. How exactly is that helping to spur job growth?
It's not.....and they won't start spending internally on capital projects, for the reasons I've already mentioned.....i.e. customer spending has to improve before I invest in a new lab or manfacturing facility.....i.e. the economy has to pick up.

Relying on the magnanimity of the wealthy is a fool's attempt at job creation. You're basically asking for charity at that point. The only way to encourage the wealthy to create jobs is by putting an offer on the table where job creation leads to more profit. That requires work, and work requires money to do so. The best place to get that money to fund said work is the greatest source of stagnant assets, the wealthy. See how that cycle works? As long as the stick of "we won't create more jobs!" is an effective weapon against taxation we'll be stuck in this downward spiral.
Drek, with all due respect....you're implying that companies are sitting on cash in a "hissy" fit just to stick it to government. That's pretty far fetched considering that the more they grow their business, the more money they make. It is IN THEIR INTEREST to grow. Rising employment is simply a direct by-product of the growing business environment. Companies don't grow BECAUSE they hire more people.......they hire more people BECAUSE they grow. When you bring publicly traded companies into the equation......you're implying that execs would risk their jobs pissing off not only the government in their "hissy" fit.....but their shareholders....to whom they are directly responsible for growing returns....and are the same people that can vote their a$$es out of the company.

When H.W. Bush's hand was forced to raise taxes to climb out of the early 90's recession his biggest increase was on the top earners. The economy began to recover shortly after. When Clinton raised taxes he again increased the top tax rate and the economy prospered. When W. Bush cut taxes across the board but primarily for the wealthy we began this latest nosedive. See a trend here?
No. Quite frankly I don't. You have made no cause-and-effect connection. The economy doesn't grow BECAUSE we raise taxes. The economy was good in the 1990's primarily due to the internet bubble which created tons of jobs (unfortunately temporary) and we had the large base of tax payers. When that bubble popped.....the jobs went away....tax revenue plummeted. Bush's tax cuts (as small as they were) did NOT cause the .com bubble to burst. Again, let me give a few examples of how tax increases STUNT economic growth...no matter how you cut it.....not only that....but will actually REDUCE tax dollars into the treasury.

1. Liquor store tax in MA......the MA legislature imposed a 6% sales tax on liquor. People stopped buying liquor in MA. So not only did the Commonwealth NOT receive this tax (to the extent they wanted)....they also lost more CORPORATE tax because sales were going to New Hampshire. In short, the state was bringing in LESS revenue that it was before the tax was implemented. Less than a year after passing, it was repealed.

2. Back in the 1970's or 1980's, Maine implemented a luxury tax on "wealthy" boat owners that said anyone who puts their boat in the ocean has to pay X% of a luxury tax. So, the boat owners simply didn't put their boats in. But the real problem was that it killed the spring/summer refurbishing/painting businesses. Nobody needed their boats painted/cleaned because they weren't being used.

Bottom line is you take more money out of people's pockets....they spend less....that's bad for the economy.

Hell, to put it most simply, if you aren't taxing the wealthy enough to make reinvestment a better play then you aren't taxing them enough. Right now we're well below that threshold.
Again.....the top 1% of earners pay 37% of all income tax dollars....what's enough?

No one is suggesting we go back to the 40's/50's/60's era tax rates. The threshold has historically sat somewhere in the 40-50% range, there is absolutely no need to go above that.
So if we go to even 50%.....we've upped it roughly 13% (from the current 36% top bracket).....and what will that generate? Another $120 billion in tax, again assuming they all don't change any behavior. That's nothing. We have an annual deficit of $1 trillion plus.

Contrary to poplular, media-driven belief.....you simply can't solve the budget problems by taxing the crap out of the wealthy. That's because the base (population) that makes them up simply isn't large enough. But it's a great class warfare and emotional "fairness" game to play with the voting public. Until the morons in Washington ever wake up and come to realization that this country spends FAR FAR too much money.....our deficit problems will never be solved.

Something along the lines of a base tax rate of 35% on those earning over $1M a year with a flex inducer where after the first 10% of GDP the federal gov't. carries we raise the top earner tax rate 1% for ever 10% of GDP we're in debt.
Drek.....we're already there.....or almost there.....and the incremental percentage won't make a dent in the deficit. It just won't.

That, coupled with a "general funds war chest" initiative where the gov't., when running a surplus, is required to stockpile up to 10% of GDP in available assets, would remove the debtor nation mindset. We would no longer see bank bailout heists like we have of late because the wealthiest would understand that tacking an extra $1T onto the national debt would only drive their tax rates up in the long run and therefore would actively work against it.
Interesting......but in the interest (no pun intended) of reducing our INTEREST on the debt....any surplus (if we ever see one again) should be used to pay down the debt.[/QUOTE]

Nice post, Drek. Refreshing to have intelligent conversation......even if we disagree on certain points.

Now I have to go increase my own productivity at work. :) I'll check in later.

[55CrushEm]

55CrushEm - I definitely agree that incentives need to be created to spur the economy, I just think we have a fundamentally different view on how to incentivize. The opinion of yourself and other conservatives seems to be that tax cuts are incentive enough. Just hand them over the money, and cross your fingers and hope that they will invest the money the way you want them to. I don't see that method working. I prefer the carrot-and-stick approach. Drek gave a great example of the sort of thing I think we should try. Lower the corporate tax rate to 25% with no loopholes and offer tax breaks for employing an American work force up to 0% for a fully American staffed firm. That kind of incentive guarantees the outcome you want. No-strings-attached tax cuts leaves too much up to theory.

I'd be all for that. And we're at least on the same page, if not entirely in sync. What you are suggesting though, is INCENTIVES THROUGH TAX BREAKS, even if with string attached. And that's my primary point....that tax CUTS will incentivize....NOT vice versa.

:thumbs:

[Rigs11]

Read that short piece again, "genius". It says from "activities WITHIN the U.S.". And yes, they are segregated when you file your corporate returns.....and yes, U.S. corporations pay tax on profits/cash earned on foreign soil when those profits/cash are REPATRIATED into the U.S.! So apparently, your little piece doesn't account for that.

Furthermore, companies aren't repatriating cash (and therefore not paying tax on it) from their foreign subsidiaries as much as they have in the past few years for a couple of reasons.....1) they are already sitting on cash now, so they don't "need" the extra, and 2) the federal government allowed a one-time "freebie" I believe in 2010, could've been in 2009, in which they allowed U.S. corporation to repatriate up to $50 million (maybe there was no cap, I forget) tax-free.
U keep changing your mind.so all US companies have foreign earnings?and what u are saying is that for their earnings here and their foreign earnings they are taxed 35%, total?and why are companies sitting on all that cash?u want to give them more tax cuts and expect them to not keep sitting on it?

[ghwk]

I'd be all for that. And we're at least on the same page, if not entirely in sync. What you are suggesting though, is INCENTIVES THROUGH TAX BREAKS, even if with string attached. And that's my primary point....that tax CUTS will incentivize....NOT vice versa.

:thumbs:

Just curious, is your company private or public? Do you have a board?

I really think these too types of companies should be treated differently although I'm not sure I can tell you exactly what this is. Is there room for a different set of rates for companies that offshore money in tax havens vs those that keep money here?

[Drek]

Tax the wealthy more to have more jobs? How? Government created jobs? This is a means of "redistribution". Taxing the wealthy/corporations more will give the LESS money to create those jobs through the private sector.
Who says they need to be government jobs?

The government doesn't build roads, they just pay for them. Private contractors bid them and employ the workers who build them. That is what we need.


You've got a lot of numbers and percentages in here.....I'd like to see where you got them. What I can tell you is that if we taxed the top 1% of earners another 10% of their AGI.....it would only raise about another $100 billion (this has all the figures http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html#_grp1).....a drop in the bucket compared to our current deficit. And that's assuming they don't give up their citizenship. You simply can't assume that you can tax people endlessly and also assume that their behaviors won't change.....we're seeing it elsewhere as in the France example.
If someone is willing to try and find another first world country that will tax their private wealth at a lower rate than us they can feel free. They can also lose all the many benefits of being a U.S. citizen (of which there are many).

Also, obviously the numbers are an estimate but here's where it comes from:
1. savings rate in this country hasn't been over 10% in over a decade for the middle and lower classes, so just assuming 10% (as I said, probably a generous overestimate) we're looking at 90% of all money "redistributed" as you put it going straight back to the major corporations. Who own those corporations? By and large the wealthy we'd be taxing. Ergo the additional tax revenue gained would land squarely back in their bank accounts at the end of the day, minus a very small bit that the middle class would save.

As for revenue generated, the effective tax rate on the wealthiest citizens is hovering in the high teens to low 20's. So you're looking at it as though they all actually pay 35%, which almost none actually do. If even the marginal 4% increase that Obama is calling for was in place we'd see at least $80B a year (numbers widely reported by all taxation agencies), which is a nice start to righting the budget.


TOTALLY agree.....and this is an example of how tax cuts INCENTIVIZE and stimulate more business ACTIVITY.
Sure, on the corporate side. But tax cuts on wealthy individuals doesn't do that. Incentivize them to keep money in corporate growth instead by having a meaningful tax on the wealthy and we'll see excellent job growth.


Agreed again. Although, not sure how that would work.....the U.S. can't exactly impose it's working environment regulations on other countries.....but if they're willing to play ball.....why not try.
We have no need to impose our working standard on other nations. We would simply have a new standard by which to designate a trade partner. We assess their current worker and environmental standards and grade them, if they're roughly equivalent to the U.S. they pass, if not they don't and aren't eligible as a tax credit write off.


I would like to see the data on this.....not because I don't believe you.....but because the breakout of private vs. government jobs is important to me and key in regards to the arguments we're making.
Don't much have the ambition to google it right now but a few weeks ago it made it's rounds through all the morning talk shows, news sites, etc..

Basically the private sector lost about 4.58M jobs during the recession. It has now made back about 4.15M. The public sector lost 1.5M jobs and hasn't effectively made any back. The vast majority of those public sector jobs were school teachers, municipal workers, etc.. The beurocracy hasn't decreased, just the productive members of local and state governments.

Drek....here's where we're gonna diverge a bit more. Why does it have to be the responsibility of government to build all infrastructure? Cell phone companies put up their own towers. Some (not all) utility companies put up their own grids/poles/etc. Other utility companies can put up wind farms....if they choose. All of this spending does NOT need to be done by government....and I would argue it would be done in a more cost efficient manner if it were NOT done by government.
1. Because the largest scale projects can not be undertaken by private enterprise, no matter how beneficial it might be. Stockholders are naturally risk adverse and that makes CEOs risk adverse.

2. Many companies add onto and maintain existing infrastructure, but none are capable of large scale retrofits. This is the problem.

I'm not saying we have U.S. gov't. workers hanging from every pole for a grid overhaul. I'm saying we do it like every private sector company does it and the government in fact does it now. Design a nationwide plan on the federal level in collaboration with the major energy providers, mandate the update nationwide, and recoup the companies for their updates on a lump sum + change order fashion. If a utility company's region is estimated to have $1B of overhauls needed to get up to spec then they can pay for those overhauls with quarterly reimbursements by the gov't. If that company runs over without cause that's on them. If they run over but can prove unforeseen circumstances a middle ground will be reached. If they run under they're awarded the additional surplus. Strongly encourage them to build similar provisions into their contracts with subcontractors.

This model is applied regularly in voluntary environmental cleanup programs across this country with great results, and most of those are ran as T&M, not lump sum which would only improve the efficiency of the program.

The other point I'll make here is corporate productivity isn't down now because there isn't enough infrastructure or capacity. Companies have too much capacity (see example of my former company). You build up capacity to meet demand, but when demand dries up......you have "over capacity"....i.e. too much costs and not enough revenue....as a result perforamance suffers, stock goes down......etc etc.
I'm not talking about productivity. I'm talking about efficiency. Our nation as a whole is less efficient than it could be, the energy grid is only one example. It is a particularly important example though because it would also scale back our reliance on fossil fuels.


Agreed......except I would say 20-30 years ago....not 10. And I would also say it can only happen if the federal government ALLOWS it to happen.
And sponsors it, as the utility companies are not, given volatile fuel rates and the like, in a position to take that kind of expense on the chin. Its a catch 22. Fossil fuel rates go up so they can't afford overhauls without taking on risk, but the needed overhauls would help reduce waste and therefore reduce the out of control fuel price increases.
in Should we drill for oil in ANWR?
No, ANWR is a vital defense resource. It has been mapped and is damn near well ready at this point. We can roll in there and tap it quickly. But it is the last easy to access oil field on U.S. soil and without it we lose a very important stick when dealing with the middle east. ANWR is the fail safe for a global oil shortage and needs to be treated as such. Also, it's yields have been rather overstated, cracking into it will only prove that and further reduce it as a bargaining chip on the global scene. Right now it's this unknown "**** you we've got 10-15 years of oil of our own!" leveraging tool. Using it up takes that away.

Should we allow hydro-fracking to continue? Environmentalist would say no. I yell a resounding "YES". We need more power. We also need more refineries.
Hydro-fracking is a well tested method for extraction that should continue assuming everyone is following best business practices. That is the part of hydro-fracking that needs to change. Closer scrutiny in the field by oversight. The oil industry is notorious among all enviro/earth science professionals as being a bunch of cowboys. Giving them hydro-fracking without anything close to the oversight a mine or quarry faces on a daily basis is playing with fire. MSHA should be given oversight on oil and gas fields. They run a tight ship and get results, as opposed to the oil industry's bought and paid for oversight.

I agree that we had a healthier middle class before......but we've also talked about some of the reasons that has eroded.....e.g. wage competition from foreign coutries "pulling" out manufacting jobs, more favorable corporate taxes in foreign countries also pulling out jobs, etc.
Which is why you combat off-shoring with a more progressive tax system that rewards bringing those jobs back, as we can't put the genie of unregulated "free" trade back in the bottle.

Everyone would like to see the poverty level go down.....but you don't achieve that by getting more people on welfare and food stamps, which is what is happening. The LESS people depend on government, the better. Wouldn't you agree? Which is what makes the welfare reform changes of late even more baffling (but that is another topic). Government CAN NOT eliminate poverty....they never have, and they never will....only a healthy economy can ALLEVIATE it.
The less people directly lean on the government the better. That is why we need infrastructure and social improvements. The cost of welfare, food stamps, etc. all goes down when unemployment goes down. To get there we need jobs. We also need infrastructure overhaul. This is a two birds with one stone scenario.

In my view there is no reason for the U.S. to ever stop infrastructure reform. The biggest race among nations over the next 50-100 years is how quickly you can build an infrastructure that outclasses the competition. Overhaul the grid and fix the roads first. As soon as those are under way get looking to build new state of the art nuclear plants and a legitimate electrically powered high speed rail systems to reduce the dependence on OTR hauling (which burns tons of fossil fuel). After that start getting into serious ports and water ways reform. By the time you're done there you could probably start all over again on roads and the energy grid, as they'll be 20-30 years out of date.

Infrastructure should be a perpetual commitment by this nation. We should accept nothing less than the most advanced technological society on the planet. Then the tax rate becomes secondary to corporations who see the most stable, high efficiency infrastructure on the planet at their disposal for what amounts to a modest, if any, tax increase. It sure beats taking those costs and complexities on themselves.

We will disagree in a major way here. First, I will always firmly believe that tax cuts stimulate economic growth. I implore anybody to explain to me how raising taxes stimulates private sector growth. It doesn't. Taxing the wealth doesn't do it. The 10% example doesn't raise anything of substance....and taxing them at 80%......how'd that work out for Carter? Or France right now? You simply can not tax yourself into prosperity.
I'm not talking about taxing into prosperity. But letting the wealthy individuals in this nation freeze up large portions of wealth isn't acceptable either. I'd gladly tax them all at the exact same rate as the middle class if they spent at the same rate of the middle class. But they don't. They spend a small fraction of their income and then freeze large portions of the rest up in walled gardens. That is unhealthy for all involved.

There is a point in the tax scale whereby it is better to pay our higher tax rates on several million dollars and reinvest the rest than moving to a foreign nation with lower rates and losing all the perks our nation provides.

Furthermore, defecits are a function of spending vs. revenue.....simple math. We don't have deficits because our tax rates are too low.....we have them because our spending is entirely out of control.
I'd argue it's a combination of both. We've cut taxes while also increasing spending. Both need to be amended.


Drek, the wealthiest 1% of Americans already pay 37% of all income taxes....in terms of real dollars. How much more do you want them to pay, honestly?
The effective tax rate on the top 1% is around 20%, FYI. Multiple sources have this including the IRS' own calculation. You're just going by what the actual rate is listed at, not what they're truly paying based on income.

The bottom half pay almost nothing.
Sure, most of them have almost nothing to pay. Makes a bit of sense as you can't get blood from a stone.

gas tax, sales tax, phone tax, excise taxes, real estate taxes, etc, etc, etc. And you can't structure a tax code so that ALL of these ridiculous taxes are based on someone's income. That would make it MORE unfair.
Sure, unless we go to some European style VAT system, which I think is a horrible idea.

Of course the pie stops growing (recession/depression), and resumes growth, and on and on. I'm not sure where you're getting your population figures but I'm reading the last 2010 census had us at roughly 308 million people, which was up 9.7% from the last 2000 census. In any case, we should WANT to grow the pie....even if population growth was stagnant, to provide a better standard of living for all.
I'm basing it on the birth rates I'd seen estimated a few years ago, maybe we've kicked up since then. The rate is still declining though and we will soon hit stagnation if you ignore illegal immigration.

And yes, growth of the pie is always good, but needing perpetual growth of the pie to sustain the economic model is not. We need to be able to weather a recession without major parts of our economy collapsing due to sudden loss of funds.

It's not.....and they won't start spending internally on capital projects, for the reasons I've already mentioned.....i.e. customer spending has to improve before I invest in a new lab or manfacturing facility.....i.e. the economy has to pick up.
Which can only pick up when the middle class grows and is empowered, otherwise they don't have enough customers to want to expand. Hence why you need to force an economic kick start through infrastructure reform.


Drek, with all due respect....you're implying that companies are sitting on cash in a "hissy" fit just to stick it to government. That's pretty far fetched considering that the more they grow their business, the more money they make. It is IN THEIR INTEREST to grow.
I'm not saying businesses are sitting on assets, I'm saying wealthy individuals are. Because given all the current loop holes it is more financially appealing to get the money off-shore and protected with a very low rate of return than have to any real risks with an overabundance of money they could never actually spend.

Rising employment is simply a direct by-product of the growing business environment. Companies don't grow BECAUSE they hire more people.......they hire more people BECAUSE they grow. When you bring publicly traded companies into the equation......you're implying that execs would risk their jobs pissing off not only the government in their "hissy" fit.....but their shareholders....to whom they are directly responsible for growing returns....and are the same people that can vote their a$$es out of the company. Again, not a "company" thing. This is why I'm in favor of a zero percent tax rate on companies that employ U.S. or comparable workers, offset by a higher tax on wealthy individuals. Then when a company is excelling and their stockholders are presented with the option of taking a large dividend taxed at 35-40% or letting the company reinvest it in tax free growth they'll be further incentivized to do the later.

It turns the corporate paradigm away from "how do we maximize profits for shareholders" and towards "how do we dominate our segment to maximize shareholder VALUE".



1. Liquor store tax in MA......the MA legislature imposed a 6% sales tax on liquor. People stopped buying liquor in MA. So not only did the Commonwealth NOT receive this tax (to the extent they wanted)....they also lost more CORPORATE tax because sales were going to New Hampshire. In short, the state was bringing in LESS revenue that it was before the tax was implemented. Less than a year after passing, it was repealed.
This is an example of tax evasion for starters, just something we allow to happen. You can't do that with income tax.

Second, it hinges on the notion that a few points more on the top earner's tax rates will see them all flee the U.S., which isn't true. To where? Some 3rd world country with no income tax but none of the benefits and protections associated with being a U.S. citizen provides? Or to Europe where the effective tax rates + VAT make it far more expensive?


2. Back in the 1970's or 1980's, Maine implemented a luxury tax on "wealthy" boat owners that said anyone who puts their boat in the ocean has to pay X% of a luxury tax. So, the boat owners simply didn't put their boats in. But the real problem was that it killed the spring/summer refurbishing/painting businesses. Nobody needed their boats painted/cleaned because they weren't being used.
Again, an evasion tactic of docking boats in non-taxing states was employed here, FYI.

Also, both of these are consumption taxes more comparable to sales tax. The biggest loss for them isn't that people can just go elsewhere, they also reduce demand. Taxing income doesn't reduce the demand for income.

Again.....the top 1% of earners pay 37% of all income tax dollars....what's enough?
Low 20's generally, FYI. (http://www.politifact.com/truth-o-meter/statements/2011/jul/12/timothy-geithner/geithner-says-top-1-percent-have-tax-rate-low-20s/)

[Drek]

So if we go to even 50%.....we've upped it roughly 13% (from the current 36% top bracket).....and what will that generate? Another $120 billion in tax, again assuming they all don't change any behavior. That's nothing. We have an annual deficit of $1 trillion plus.
Again, you're working off the flawed perception that the top earners are actually paying the full rate. They're 50% below that. Also, the annual deficit needs to be closed through multiple avenues of reform, tax reform is only one of them.

Contrary to poplular, media-driven belief.....you simply can't solve the budget problems by taxing the crap out of the wealthy. That's because the base (population) that makes them up simply isn't large enough. But it's a great class warfare and emotional "fairness" game to play with the voting public. Until the morons in Washington ever wake up and come to realization that this country spends FAR FAR too much money.....our deficit problems will never be solved.
I'm not saying that taxing them is a cure all solution. We need major cuts in defense spending, medicare reform by way of pay structure overhaul, etc.. But we also need to increase spending on things like infrastructure where almost everything spent only helps to amplify the economy. Infrastructure slightly trails only unemployment payouts as the top dollar to dollar benefit towards GDP. Almost every penny winds up helping the economy as a whole grow.


Drek.....we're already there.....or almost there.....and the incremental percentage won't make a dent in the deficit. It just won't.
Again, you're using a straw man number, I'm talking about the rate we should actually tax people at.

Interesting......but in the interest (no pun intended) of reducing our INTEREST on the debt....any surplus (if we ever see one again) should be used to pay down the debt.
Of course. I'm talking about once the debt is paid off. Once we've back within 10% of GDP we then stockpile another 10% of GDP. That way the federal government can prop up the states during a recession without immediately going into deficit spending, allowing for flexible solutions to future issues.

The Keynesian model of the federal gov't. spending to prop up states during bad times and shrinking to pay off its debt in good times is the best model for our multi-state union, but it means we can't have a hard line balanced budget at the federal level. The federal gov't. needs to be flexible to help the states, address natural disasters, and when needed wage war without the financial impact tying their hands. This is best solved by having a federal war chest with which to work.

Also, once the gov't. balanced the budget, eradicated all but 10% of the deficit (or all of the deficit), and built up a 10% of GDP war chest it would then issue any remaining surplus as a tax holiday across all brackets. A non-permanent tax holiday that ends as soon as we enter any real foreign conflict. The American people are too disconnected from the realities of going to war, short of bringing back the draft the only way to send that message now is by hitting their wallets when they passively sit by while their gov't. goes nation building.


And yes, I did just crush the OM's characters per post limit.

[Rohirrim]

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