The Ant and the Grasshopper

[Nitrox]

What has been a lie?

[j_b]

A novel concept for regressives: budgets depend on revenue AND expense.

 

 

Upper-income people would lose tax cuts in Obama plan

 

WASHINGTON — Fresh from raising taxes on upper-income Americans to help expand health insurance coverage, President Obama and Democratic lawmakers are targeting them again.

 

When Congress takes up Obama's proposed $3.8 trillion budget this year, it will include extending President George W. Bush's tax cuts for middle-income families enacted in 2001 and 2003. Tax cuts for individuals with income above $200,000 and couples above $250,000 would be eliminated.

 

The effective tax increase on the upper income would yield about $41 billion next year and $969 billion over the next decade, according to the Treasury Department. The White House says that would help reduce the $1.5 trillion budget deficit.

 

http://www.usatoday.com/news/washington/2010-04-06-Obama-tax_N.htm?obref=obinsite

 

 

[Fairweather]

 

The effective tax increase on the upper income would yield about $41 billion next year and $969 billion over the next decade, according to the Treasury Department. The White House says that would help reduce the $1.5 trillion budget deficit.

 

 

 

 

j_b is trying to compare a 10 year budget fantasy to a $1.6tn annual deficit compliments of Obama. I'm not sure if j_b's bad at math or semantics. Probably both. Either way, he can't be trusted with a crayon. What a dumbshit.

[j_b]

As expected regressive nincompoops aren't happy with Obama reducing the deficit. First, they couldn't care less about deficits when they cheered on Bush digging us into a budgetary hole, then they claimed to care about the deficit when Obama became president (surprise) and now they aren't happy when Obama wants to increase revenue to decrease the budget deficit. Why don't you guys make up your mind? or is it that you will never be happy until you put another looter in the White House?

[j_b]

[Fairweather]

As expected regressive nincompoops aren't happy with Obama reducing the deficit. First, they couldn't care less about deficits when they cheered on Bush digging us into a budgetary hole, then they claimed to care about the deficit when Obama became president (surprise) and now they aren't happy when Obama wants to increase revenue to decrease the budget deficit. Why don't you guys make up your mind? or is it that you will never be happy until you put another looter in the White House?

 

Obama's "deficit reduction" reminds me of the guy who washes down 3 Big Mac meals with a sugar-free beverage and then claims he's on a diet. j_b, are you delusional? You're so far off the range nowadays that I'm seriously thinking about placing you on "ignore."

[prole]

How to Talk to a Tea Party Activist

By Chuck Collins

April 14, 2010

 

We'll be hearing a lot about the tea party movement on tax day. They will be angry, and some of that anger at the tax system will be justified.

 

Like all social movements, the tea party wave is not monolithic. There are hard-core libertarians, white supremacists and partisan Republicans that are not interested in dialogue. But in my conversations with rank-and-file tea party activists, there are important points of common ground.

 

Many participants have seen their personal economic security devastated by the economic meltdown. They are worried about their tax bills, national debt and the economy their children will inherit. They feel isolated and the tea party is a community.

 

Here are a few conversation points I've found useful in talking with the open-minded participants at tea party activities:

 

We Agree

 

The middle class is overtaxed. After fifty years of major "tax reform" by both political parties, the middle class pays the same percent of income in taxes today as it did in 1960. The very rich (with incomes over $2 million) pay half as much as they did in 1960 and the richest 400 households pay two-thirds less. Big corporations like ExxonMobil and General Electric have gamed the system so that they pay zero or little taxes.

 

We are borrowing recklessly from the future, from our children's standard of living. We borrowed to give rich and global corporations tax breaks and fight two wars. In the last eight years, we borrowed $700 billion to give tax breaks to people with incomes over $250,000.

 

The middle class standard of living is under attack. For thirty years real wages have been flat and our economic security has declined. This was masked by people working more hours and taking on unprecedented amounts of personal debt. The economic crisis unmasked how our security was built on a bubble of debt. A job is no longer a source of health insurance or retirement security. We've been told: you are on your own.

 

Wall Street is squeezing us at every turn. In addition to the government, corporations are also "taxing" us, with their fees, charges and monopoly control over markets. We pay more and more to Visa, Verizon, AT&T, Blue CrossBlue Shield, ExxonMobil, US Airways, etc. These are forms of taxes paid to corporations. They won't stop unless we organize to stop them.

 

Where We May Disagree:

 

President Obama is not the enemy. Both major parties have been hijacked by corporate overlords whose first priority is to protect Wall Street financiers and greedy corporations. President Obama is pushing back more than President Bush did, and he had an enormous mess to clean up (he inherited two wars, the Wall Street meltdown and a $10 trillion national debt). If we demand a government that protects Main Street and ordinary people against organized greed, he will respond.

 

Scapegoating vulnerable people is a dead end. Our economic problems were not caused by immigrants or low-income people. Wall Street greed in high places is what drove the economy over a cliff. Powerful elites want to distract us by having us fight among ourselves, with racial divides and class wars. Let's not be distracted.

 

Weak government is not the answer. If we shrink government, who will defend us against Wall Street and the corporate looters? The parts of government that should protect us against Wall Street greed, speculation and the assaults on the middle class have been weakened under both political parties.

 

Solutions

 

A fair and accountable tax system. Wealthy people and corporations should pay their fair share and reduce the bite on middle-class taxpayers. We should eliminate tax dodges that create one tax system for the privileged and another for everyone else.

 

Reduce national debt and make real investments. We need to pay down our national debt and make long overdue investments in public infrastructure that our small businesses and communities depend on.

 

Oversight of Wall Street. The financial sector is incapable of policing itself. We need strong public institutions to oversee the financial markets so that the reckless, greedy and unregulated financial activities that wrecked our economy cannot happen again.

 

Rein in big corporations. We need a constitutional amendment to limit the power of corporations to dominate our political process including elections, campaigns and lobbying. This is key to preserving our democracy and liberties.--from here.

[billcoe]

Great chart jb. Thanks!

[j_b]

yep, all this talk about "entitlement programs" from libertarian wingnuts but not a peep from them about the return of the robber barons and their systematic refusal to give the state the means of its policies (taxation).

[Fairweather]

Great chart jb. Thanks!

 

So do you really think it's ok to confiscate 65% of a rich man's income--not even counting state/local--while the bottom 46% of Americans pay nothing?

 

Does the government really have the moral right to then take 77% of your estate when you die? And is it right to complain that they only get half nowadays? C'mon, man.

 

Do you really think a graph loaded with hyperbolic tags is a reliable indicator of reality? Again, Bill, please take another look.

[jared_j]

How does the rich man become rich?

 

Is his wealth completely of his own making? Did his success occur in a vacuum? This certainly is the American mythology - the self-made man. And they exist; I know two - a good friend, and my father. They both stand out as exceptions, not rules, in my observation.

 

Here's me, on the other hand. I make decent money as an economist. I was born into a family with two educated parents who pushed me to exceed academically and work hard, and footed the bill for me to get an undergrad degree at an in-state institution. Coming out debt free made it easier for me to go to grad school, which in turn opened career and earning doors.

 

Relatively speaking, I had a leg up in terms of my gender, skin color, neighborhood, and parents. I call that luck of the draw.

My personal view is that, as someone who's gotten a better than average deal in this society, I owe it back to society to not be as miserly with my money. If that means higher marginal tax rates if I ever make huge enough bucks to be in the top tax bracket, so be it.

 

Does that mean that lazy people should get a free ride? No. But maybe you highly financially successful people (I'm assuming Fairweather must be uber successful since he is so concerned about marginal tax rates on the high income bracket) should show a little gratitude for your success.

 

Cue "I'm a self-made man biographical spiel" now.

 

 

Edited April 15, 2010 by jared_j

[111]

Do you really think that rich man is EARNING all that richness? methinks not typically. I would say up to maybe the 500k income level, that person is probably working hard for that $, but beyond that, the job gets easier and the income grows(think executives making one or two big decisions a year and then golfing the rest of the time). So yes, it is ok to confiscate 65% of a rich man's income, especially when it still leaves him MILLIONS every year.

 

GREAT CHARTS ABOVE JB!

[ivan]

So do you really think it's ok to confiscate 65% of a rich man's income--not even counting state/local--while the bottom 46% of Americans pay nothing?

 

yes

 

call it a redressing of an historical evil - how many millenia did the rich fuck the poor in the ass for their own benefit?

[prole]

"Why shouldn't the American people take half my money from me? I took all of it from them."

--Edward Albert Filene (1869-1937), founder of the US Chamber of Commerce

[ivan]

"Why shouldn't the American people take half my money from me? I took all of it from them."

--Edward Albert Filene (1869-1937), founder of the US Chamber of Commerce

[tanstaafl]

If you took away 65% of my income I'd *still* make more than I made in NYC in the early 90s when I first got out of college ($19K a year). And you better believe I paid taxes on that -- federal, state, city, and something they called "other" and just took. I also managed to make student loan payments and save enough in a year to take a six-week trip to Europe on that salary, so -- I dunno. I simultaneously think that 65% is an awful lot to pay, AND that if you can't manage to live on $350K a year you're an idiot and I have no sympathy for you.

 

I also have a hard time believing that 46% of Americans really make less than $20K a year, but if they do, sure, let them keep every penny of it.

 

 

[jared_j]

2005 Census says 25% of households make less than $25k a year .

 

Poorer folks like to make the babies more than the non-poor.

 

I don't think you can quite get to 46% even accounting for poorer households having more people in them. That's still a lot of folks, though.

[JayB]

How does the rich man become rich?

 

Is his wealth completely of his own making? Did his success occur in a vacuum? This certainly is the American mythology - the self-made man. And they exist; I know two - a good friend, and my father. They both stand out as exceptions, not rules, in my observation.

 

Here's me, on the other hand. I make decent money as an economist. I was born into a family with two educated parents who pushed me to exceed academically and work hard, and footed the bill for me to get an undergrad degree at an in-state institution. Coming out debt free made it easier for me to go to grad school, which in turn opened career and earning doors.

 

Relatively speaking, I had a leg up in terms of my gender, skin color, neighborhood, and parents. I call that luck of the draw.

My personal view is that, as someone who's gotten a better than average deal in this society, I owe it back to society to not be as miserly with my money. If that means higher marginal tax rates if I ever make huge enough bucks to be in the top tax bracket, so be it.

 

Does that mean that lazy people should get a free ride? No. But maybe you highly financially successful people (I'm assuming Fairweather must be uber successful since he is so concerned about marginal tax rates on the high income bracket) should show a little gratitude for your success.

 

Cue "I'm a self-made man biographical spiel" now.

 

 

Contemplating the web of connections and circumstances behind spoiled rich kids that crash and burn through that framework is kind of an interesting exercise.

 

It's worth asking whether increasing marginal tax rates will always lead to a higher tax yield, and more revenues to pay for programs that help those that are struggling.

 

Ditto for rates of capital formation that ultimately translate into real productivity gains and real wage increases, etc, etc, etc.

 

What's revenue-optimizing for the long-term may not jive well with popular conceptions of fairness. Taxing interest income at the same rate as regular income will probably work well on the fairness front, but anyone trying to raise money from the market to finance a new factory, wind-farm, power-plant, refinery, etc, will find it harder to do so than they would otherwise and will likely create less capacity or chose to finance and build it elsewhere. Not entirely sure that will be a net plus for the folks who have no interest income to speak of, and suspect the net increase in tax-yields that it generates will be well below forecasts.

 

The "luxury tax" that on boat purchases over 100K was probably a winner on the perceived fairness front, and it's conceivable that it succeeded in crimping the style of the folks who could actually afford those boats a bit, but the most decisive impact was on the people who made their living fabricating the said boats. I'm not entirely sure that they'd agree that the subjective satisfaction that the fairness camp derived from sticking it to their customer base was a social good sufficient to warrant their collective employment losses. Fewer boats, lower industrial output, fewer jobs, fewer payroll and business taxes, lower sales tax receipts....but more fairness. Probably seems like a worthwhile trade-off if you don't make your living building big boats, or depend on the lost tax revenue that the big-boat business generated in some fashion or another.

 

Who knows - maybe the subjective benefits of perceived fairness will be more than sufficient to offset the effects of the taxes on drugs and medical devices. Not likely, but we can hope.

[ivan]

"fair?!? you're nihilists!!!"

[prole]

"Fairness" and redistribution aside, there's also the simple fact that there are publicly funded institutions and services that we all benefit from as a society even if we don't use them directly and that cannot or should not be run for profit.

[billcoe]

Does the government really have the moral right to then take 77% of your estate when you die? And is it right to complain that they only get half nowadays? C'mon, man.

 

The chart shows that the maximum estate tax rate right now is 45%. Am I fine with that? Damn right I am.

 

Would I like to see our Government become smaller so that they can spend that 45% on more important things and need to rip off everyone else trying to make a living a bit less? Damn right I would.

 

Did I like your ant-grasshopper story!? Damn right I did:-)

[Choada_Boy]

That's funny FW, when it comes to ants I'd always visualized you as the guy with the magnifying glass...

 

That's funny, OW, I'd always visualized him as being either eaten alive by a swarm of marching army ants or unsuccessfully suffering through the Satere-Mawe Bullet Ant Glove rite of passage.

 

[Mal_Con]

The 46% is the marginal rate on earned income if you earn $200k your average rate is more like 17% each additional dollar is taxed at 46% in addition SS tax cuts out entirely. Those who get the big bucks usually structure it so it is taxed as a capital gain for which the rate is only 15%.

[tvashtarkatena]

It might be helpful to note that ants die very soon after separation from the colony; they have absolutely zero personal initiative or survivability outside outside that completely soshalistic structure. They also take chemical orders from the queen, no questions asked. Grasshoppers, on the other hand, are well equipped to survive more or less on their own.

 

Like most of these quaint little anal-ogies, this one actually contradicts the bedtime story point it attempts to make.

 

Now on to the 'I'm Thumb-body!' page...or maybe 'Chicken Soup for the pea brain'. Just another day on Planet Feel Good.

 

[tvashtarkatena]

One thing ants do have in common with right wingers is that they love to go to war. Doesn't salvage that moronic story, but its something.