Dems should filibuster any attempt to increase national debt limit

[jim_vh]

Dems should filibuster any attempt to increase national debt limit...unless dubya recinds the tax cut for those who make over $200K which is what kerry said he would reverse.

[Spinal Tap]

Originally posted by jim_vh
Dems should filibuster any attempt to increase national debt limit...unless dubya recinds the tax cut for those who make over $200K which is what kerry said he would reverse.

why should rich people pay all the taxes that poor people benefit from? is the government supposed to act like robin hood? just wondering. i'm not even rich and it pisses me off.

[spiderman]

jim, since you constantly talk about the national debt, I'm interested to find out exactly what affect it will have over the next 10 years?

Seriously.

[Ballbustah]

Let me ask a question?

Is the wealthy paying less taxes then the middle class percentage wise?

[Undertaker #59]

No...

Talking purely income tax, the more income you have - the higher bracket you are in and pay a higher percentage.

[jim_vh]

Originally posted by Undertaker #59
No...

Talking purely income tax, the more income you have - the higher bracket you are in and pay a higher percentage.

you are deliberately leaving out the regressive taxes such as the social security tax, which maxes out an an income under $90k , and income from capital gains which is much of the income of the top few percent of the nation. right now over half the nations personal income comes from investments rather than salaries and a lot of that is taxed as capital gains rather than income.

and anyway, that is what kerry said he was going to do, so why shouldn't the democrats stand up for this and not let the rethugs borrow any more money until they committ to returning to fiscal sanity?

spinal, actually you have it backwards, for the most part a lot of taxes are paid by the lower economic classes and rerouted to those more affluent then themselves via haliburton, drug companies, defense contractors, etc

[spiderman]

Originally posted by jim_vh
spinal, actually you have it backwards, for the most part a lot of taxes are paid by the lower economic classes and rerouted to those more affluent then themselves via haliburton, drug companies, defense contractors, etc

I don't mean to answer for spinal, but I couldn't resist. You really need to do some research before you make a statement like this, it is completely inaccurate. The bulk of all income tax collected by the IRS does NOT come from the lower economic classes.

My "spin" on the issue if you will, is that the whole issue of raising taxes on the rich sounds great in theory, but in reality is a sham. Hence, why individuals like Theresa Heinz Kerry won't release their tax returns. Rich people have rich accountants who get paid to figure out ways to keep more of their money.

I would favor a flat income tax rate, or higher sales taxes, before I would ever favor this "higher taxes for the rich" scam that the democrats are peddling.

[Undertaker #59]

I think all of these taxes should be tossed in favor of a national sales tax, with food and clothing as exemptions.

[Annihilus]

Originally posted by Undertaker #59
I think all of these taxes should be tossed in favor of a national sales tax, with food and clothing as exemptions.

Hey - I don't know much about the whole 'national sales tax' idea. Is it supposed to take the place of income taxes, or is it in addition to?

[townes]

The national sales tax will put all the burden on lower and middle classes. It's a horrible idea, which I'm sure this administration will go after with a fervor.

Jim is right, the democrats need to show that they are the OPPOSITION PARTY, not lap dogs for the republicans.

Time to fight back hard and oppose every goddamn thing this administration tries to accomplish, just as the right did to Clinton. They should use every parliamentary tool available to block every single action this administration tries to push through.

[jim_vh]

and finally, i want to get away arguing about regressive vs progressive taxation and the rights and wrongs. kerry said he would increase taxes on the rich by undoing bush's tax cuts for the same. and if the dems want to make things tough for bush, they should follow up on this and bust his chops. they would get a lot of support nationally.

[townes]

Jim, are you saying that the democrats should act as a true opposition party?

If so, I couldn't agree more. The one point that I will generally cede to republicans is that they tend to be clearer about what they believe in, although that has been seriously undermined by the current administration.

My major b*tch with the democrats, aside from corporate influence, is that they are more likely to say "me too" than to clearly define what they believe in and fight for it. I realize this is a product of the electoral system and Realpolitik, but i believe they would be better off if they would fight for policies that reflect their belief systems than to vote for what is deemed politically expedient.

Example---defense spending and iraq. It is clear that political reality dictates that no-one ever hoping to be president can vote against defense spending. A horrible fact imo, but true in the current political climate. Democrats vote for defense spending and corporate tax breaks they oppose in principle for reasons of realpolitik all the time.

There is a reason governor's do so well in national elections, and lack of a voting record is it imo.

The dems should:

Become the anti-war party. Out of Iraq, period.

Oppose all efforts to rescind environmental legislation.

Sign the international treaty on landmines and clean our sh*t up before it kills any more kids!

Support National health insurance, not half hearted attempts that please the right.

Pro-Choice--I have a real moral dilemna with this, as i oppose it morally, but can't see outlawing, and can't pretend that it isn't a consistent position for the left wing base, as it clearly is.

Pro Aggressive stem cell research. An issue where the republicans are every bit as wishy washy as the democrats are on guns.

Outlaw assault weapons, and strict gun control laws.

NO tax breaks for companies that outsource and support of labor unions. Much greater support services and tax code for small business owners, and a serious movement towards re-regulating major corporations heavily.

Major investment in community health programs.

Aggressive re-regulation of the media to make it local again. Take apart the media conglomerates like they were Leggo.

Pro-U.N.

Adherence to the Geneva Convention and participation in the World Court.

A progressive tax system and a guarantee on Social Security. No Privatization, and absolutely no National Sales Tax.


Basically, stand the F*ck up for something, and stop acting like it's a play.

[jim_vh]

they can't really stand up for any of those things because they are not in a position to do anything about them except for filibuster. that is why i am saying this about the natl debt limit. they can force some action about this, and put bush in the position of having to increase taxes on the top 1% or shutting down the govt.

it would really show up the repubs for what they are when they send a hundred thousand troops overseas to suffer but won't increase taxes by a little on the got-rocks crowd. and all the dems would have to insist on is a rollback to what the top rate was when bush took office. people would be very receptive to this and i would love to see the spinmasters on tv trying to defend some of the positions taken by spinal tap and spiderman above.

[dchester]

Originally posted by townes
The national sales tax will put all the burden on lower and middle classes. It's a horrible idea, which I'm sure this administration will go after with a fervor.

Jim is right, the democrats need to show that they are the OPPOSITION PARTY, not lap dogs for the republicans.

Time to fight back hard and oppose every goddamn thing this administration tries to accomplish, just as the right did to Clinton. They should use every parliamentary tool available to block every single action this administration tries to push through. It sounds nice, but Kerry just lost the election, and the democrats lost seats in Congress, so I'm guessing that a lot of the politicians will take that as a sign that Kerry's ideas might not be the wisest choice at the moment (unless the goal was to lose more seats). Clinton enabled the Republicans to go after him by trying to push for things that he never mentioned during his campaign (The BTU tax, gays in the Military). If Clinton had campaigned on these things and won, it would have been much harder for the republicans to oppose them.


What I'd like to see is for them to stop using the tax code for other purposes than collecting taxes. It wouldn't be that hard to come up with a simple system that people actually understood, and was halfway fair. Something that involved a flat rate with a high standard deduction.

Example: Tax 35% of everything you make (salary, interest, dividends, etc) that is over 30K per year. (you'd need to work the numbers to determine what the deduction and rate really should be, but hopefully, you get the general idea). In this example, people making 30K (or less) would pay no taxes. Everyone else would pay 35% on whatever they make (minus the first 30K).

Also, no other deductions (this includes charities, religions, children, mortgage interest, etc.)

We use the tax code to encourage and discourage all sorts of behaviors. This needs to stop.
________
maryjane (http://maryjanes.info/)

[jim_vh]

Originally posted by dchester

We use the tax code to encourage and discourage all sorts of behaviors. This needs to stop.

about the dems losing seats, they had a bunch of southern senators retire, and the dem candidates were me-too conservatives who lost, and in the house a lot of the change was due ot the gerrymandering of texas.

again, about the tax code, i am not interested in arguing philosoply, i want the dems to make a stand and stick it to bush, and this is the perfect place and time to do it.

[dchester]

Originally posted by jim_vh
Dems should filibuster any attempt to increase national debt limit...unless dubya recinds the tax cut for those who make over $200K which is what kerry said he would reverse. Why would Congress be focused on what Kerry said, when he lost the election?
________
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[jim_vh]

Originally posted by dchester
Why would Congress be focused on what Kerry said, when he lost the election?

if the dems filibustered increasing the natl debt limit, the govt would not be able to borrow any more money. this would force the congress to deal with the democrats

[townes]

Jim, I agree with your point, I would just like to see them become an actual opposition party that represents the left, not simply a watered down version of the republicans, which I will never support again.

The republicans spent the entire second Clinton term blocking everything the democrats wanted to do, and going after him personally. It's time for the democrats to respond in kind. Not simply for payback, but to stop a bunch of ideoloques from cramming far right wing legislation down the throats of a divided country.

There is no mandate, only deep division, and every step Bush takes towards implementing policies like a national sales tax and environmental de-regulation should be fervently opposed. If that means filibustering for the next four years then so be it. It's certainly better than the alternative.

[Flagg the Wanderer]

While I won't participate ina conversation about what the Dems should or should not do (my ideas would not likely be welcome, anyway), I'd like to address this:
Originally posted by dchester
What I'd like to see is for them to stop using the tax code for other purposes than collecting taxes. It wouldn't be that hard to come up with a simple system that people actually understood, and was halfway fair. Something that involved a flat rate with a high standard deduction.

Example: Tax 35% of everything you make (salary, interest, dividends, etc) that is over 30K per year. (you'd need to work the numbers to determine what the deduction and rate really should be, but hopefully, you get the general idea). In this example, people making 30K (or less) would pay no taxes. Everyone else would pay 35% on whatever they make (minus the first 30K).

Also, no other deductions (this includes charities, religions, children, mortgage interest, etc.)

We use the tax code to encourage and discourage all sorts of behaviors. This needs to stop. I think this would be a terrible mistake. Well, the "no other deductions" part, anyway. I agree that we should raise the exemption up to the 30-50k range, and really allow the lower and middle classes to make a push without Uncle Sam's hand in their pocket so much. I also think that the highest tax rate should be about 75%, but that shouldn't start until you're talking about making over 200k or so.

But disallowing deductions for charitiable giving would be a huge mistake, IMO. Charities would take an enormous hit, which would result in the government needing to control more social programs, which would necessitate higher taxation, etc.

While I personally benefit from tax breaks on children (and will continue to do so as we work towards the large family we picture) I can at least see an argument for disallowing this deduction. But here's the thing - we WANT people to have kids. Whenever people get in my face about the number of kids I have or want, something about overpopulation or whatever, I simply respond that I'm doing my part to save social security. The United States and Western Europe are not reproducing at a replacement rate right now. That's the sort of thing that will collapse a country as life spans increase and the tax burden on fewer workers grows. Overpopulation, to the extent that it is a problem (it isn't) is solvable in the long term. Top heavy economics is by definition insolvable.

As for eliminating mortgage deductions...that's a seriously bad idea. The deduction is often the final straw that allows people to break the rent cycle and get into a home. I know it was for me. We WANT people to be homeowners, too - nothing is better for the economy than home improvement, housing starts, and investment in real estate.

Other deductions, like the adoption tax credit (again, I benifit from this personally) are an enormous motivator that allow people to not be crippled economically by doing a social good. Adoption should be encouraged in the strongest possible terms by the government, and by its nature its just really friggin' expensive. But the government saves a huge amount of money by not having another child dependant upon social services, too.

I think the "sin taxes" should be used as a real hammer, actually. Tax the sh!t out of alcohol, tobacco products, marijuana products, etc.

Saying that the government shouldn't use taxation for encourage or discourage behavior: would you say that state sales taxes should cover food, too? There's a reason things are taxed or not taxed...

[bideau]

Good posts on the tax issue.

Flagg, I'm not surprised that you've had people question the size of your family. It's certainly no one's business but yours. As long as you can provide for them, be fruitful and multiply. My wife and I stopped at 2 for both personal and financial reasons. My only beef with large families is when those who are getting government aid continue to have children and add more burden to the welfare system.

I do not benefit from any child tax credits because my children are too old. But when they were younger, I still didn't benefit because my wifes income combined with mine put us over a threshold which is well below 200K. I also get no tuition tax credit for the same reason. I've just learned to accept it even though many more families are earning between 100K-150K than ever before (many more 2 income families). Inflation and certainly tuition increases have eaten up a great deal of that.

Even though my income is no where near 200K, 75% is one hell of a big chunk. I don't think you'd ever see that get through a congress. Again, many two income families are starting to approach that level. At the least, there would have to be adjustments made each year for inflation. Ten years from now, many more families will reach that 200K level.

Sin taxes are here to stay. Their primary benefit shuld be to fund the medicare system since that's the area that feels the greatest impact from these vices. Essentially, the drinkers and smokers will be subsidizing their own treatment when the inevitable health problems appear.

[dchester]

Originally posted by Flagg Wanderer
I think the "sin taxes" should be used as a real hammer, actually. Tax the sh!t out of alcohol, tobacco products, marijuana products, etc.

Saying that the government shouldn't use taxation for encourage or discourage behavior: would you say that state sales taxes should cover food, too? There's a reason things are taxed or not taxed... I was talking about income taxes (and the various deductions to encourage / discourage behavior). The sales taxes that you mention (state and federal "sin" taxes), I have less issue with. But I do not advocate taxing basic neccesities like food, clothing, FUEL, and so on.
________
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[townes]

For the record, Flagg, your input is always welcome imo, regardless of whether we agree or disagree. I like being pushed to justify my positions on issues, and you have always done that as well as anyone i have come across on these boards.

Props to dchester as well, who consistently tolerates my b.s. and pushes me to answer reasonable questions on a regular basis.

I usually don't arrive at the same conclusions, but I appreciate being pushed by those who see it from another point of view.

[Undertaker #59]

Originally posted by townes
The national sales tax will put all the burden on lower and middle classes. It's a horrible idea, which I'm sure this administration will go after with a fervor.


I'm not talking about anything this administration may or may not be supporting.

I believe a national sales tax in place of all of the other taxes would be the most fair system. You exempt the necessities like food and clothing. But those with more money, who buy more products (that are more expensive) will pay higher taxes. In this way, consumers have more choice over what to do with the money they earn in their paychecks.

If I had the 30% of my check that goes to taxes back, I could choose to save it, or choose to buy goods with it (and pay taxes on them)

It gets rid of the IRS and all of the bureaucratic nonsense that goes along with the tax code. It is a voluntary “consumption" tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes.

It's simple.

[townes]

I'm all for simple, and i would support a flat tax, but not a national sales tax, which would penalize those living paycheck to paycheck the hardest.

I'm fine with no loopholes and everyone above a true living wage paying 15%, just so long as the super rich and major corporations aren't getting around it.


Enron hasn't paid taxes in over five years!!!

[Undertaker #59]

Actually Townes, in researching this, I found one proposal which would tax everything new (including clothes and services) but gives a rebate based on income, so that those who do live paycheck to paycheck effectively don't pay any taxes, while those who have an abundance of discretionary income pay more.

If you are interesting in looking more at this one plan it is here. (http://www.fairtax.org/)

For example from their FAQ

How does the FairTax protect low-income and lower middle-income families and individuals? Under the FairTax plan, poor people pay no net FairTax at all up to the poverty level! Every household receives a rebate that is equal to the FairTax paid on essential goods and services, and wage earners are no longer subject to the most regressive and burdensome tax of all, the payroll tax. Those spending at twice the poverty level will pay a tax of only 11.5 percent – a rate much lower than the income and payroll tax burden they bear today.

Under the federal income tax, slow economic growth and recessions have a disproportionately adverse impact on lower income families. Breadwinners in these families are more likely to lose their jobs, are less likely to have the resources to weather bad economic times, and are more in need of the initial employment opportunities that a dynamic, growing economy provides. The FairTax dramatically improves economic growth and wage rates. Retaining the present tax system makes economic progress needlessly slow, thus harming low-income people the most.

In contrast, the FairTax dramatically improves economic growth and wage rates for all, but especially for lower income families and individuals. In addition to receiving the monthly FairTax rebate, these taxpayers are freed from regressive payroll taxes, the federal income tax, and the compliance burdens associated with each. They pay no more hidden taxes on goods (averaging 22 percent) or services (averaging 25 percent), and used goods are tax-free.



I am neither left nor right. I am all about freedom of the individual, and this system puts spending and taxation in the power of the individual.

[Flagg the Wanderer]

Originally posted by Undertaker #59
I'm not talking about anything this administration may or may not be supporting.

I believe a national sales tax in place of all of the other taxes would be the most fair system. You exempt the necessities like food and clothing. But those with more money, who buy more products (that are more expensive) will pay higher taxes. In this way, consumers have more choice over what to do with the money they earn in their paychecks.

If I had the 30% of my check that goes to taxes back, I could choose to save it, or choose to buy goods with it (and pay taxes on them)

It gets rid of the IRS and all of the bureaucratic nonsense that goes along with the tax code. It is a voluntary “consumption" tax: the more you buy, the more you pay in taxes, the less you buy, the less you pay in taxes.

It's simple. I'm philosophically in agreement with you, but in practice it isn't nearly as simple as it seems.

It makes paying taxes essentially voluntary, which is cool because it creates a built in form of protest to governmental policies with which the citizenry disagrees. You want to not support the government because of policy X? Go right ahead, but you'll need to live like a trappist to pull it off.

Townes' criticism is well founded, except that your exemptions of food, clothing (presumably rent?, fuel?, public transportation fare?) would exempt the most critical expenses of those living paycheck to paycheck. If they want to get cable TV, then they pay the tax on it.

The problem is that would you exempt cuts of filet mignon, lobster, and escargo as well as a bag of flour? Armani and Prada as well as store brand khakis? Rent for you 3000 sq. foot penthouse apartment as well as rent for your studio basement deathtrap? Does it matter how many dependants you have to allow for more bedrooms to be exempt? Do you draw these lines? Where? Who accounts for them?

The other problem is that here again you're losing deductions for donations to charity, mortgage payments, credits for children or adoption. These are important things for the govenment to encourage, and I shudder to think of the effect this would have on charitable giving. You'd like to think that it wouldn't, but...

The final problem is that this is a tax system that by its nature discourages spending, which would limit economic growth. On the other hand, it encourages savings and investment. All of which would be well and good if we had an export economy, but we don't. We have an import and service economy.

[townes]

What Flagg said, as i couldn't have said it nearly as well.

[Flagg the Wanderer]

I *really* like the "used goods are tax free" bit. That's a great idea.

[townes]

I'd go along with that.

In all honesty, i'm out of my league in tax discussions, as i don't know enough about code and the differences to discuss it at any high level. Although i am willing to get high and discuss it.

I could support tax reform to it's simplest levels, provided it was fair and didn't displace more burden to those who can afford it least. My understanding of the national sales tax is that it doesn't accomplish that.

[Undertaker #59]

That link I provided - that plan DOES accomplish that.

[Flagg the Wanderer]

After looking over the website for a bit, I can see at least one loophole right off the bat. As an entreprenuer, by the time this plan went into action, I'd have a barge, a website, and a loan for operating expenses. I'd create an export company and a holding company that owned the barge.

The day this plan hit the ground, I would anchor the barge in international waters and export goods at no tax to the barge. I'd then sell them, tax free, from my website, to all comers. I'd take special orders as to what goods people wanted, and when. I'd become fantastically wealthy.

Other questions: poverty line exemption limit...what about larger families? Still poverty line limit? What about, for instance, families who took in foster children? Punishing the hell out of them under this plan.

There's still the problem of no deduction for charitable giving that I mentioned earlier. Plus the mortgage deduction, child tax credit, etc.

Are there exemptions for business spending up to a certain point (per employee, or whatever), or just for personal spending? What about sole proprieterships?

Again, philosophically I love it, but in practice I have a lot of questions.

[townes]

All else aside, I don't see how those in favor get around the argument that it depresses spending, thus depressing the economy?

[Undertaker #59]

I am not sure it WOULD depress spending. I suddenly have 30% (or whatever it is) more take home pay. I would be more inclinced to spend more.

[jim_vh]

I wanted this to be a thread about how the dems should confront bush. you have turned it into a bunch of bs about tax policy. :mad: :mad: :banghead:

[dchester]

Originally posted by jim_vh
I wanted this to be a thread about how the dems should confront bush. you have turned it into a bunch of bs about tax policy. :mad: :mad: :banghead: So, do you think the democrats should go for a national sales tax, to confront Bush?
:D
________
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[townes]

OK JIm, back to the topic.

I agree, stand up and fight, take whatever sh*t goes with it politically, and don't act like such little b*tches. (e.g. Tom Daschle, who i thought was going to cry when Thune questioned his patriotism on Meet The Press. He should have given him a public beating instead of the meek whimpering he offered up).

Ah well, so much for pacifism.

[dchester]

Originally posted by townes
OK JIm, back to the topic.

I agree, stand up and fight, take whatever sh*t goes with it politically, and don't act like such little b*tches. (e.g. Tom Daschle, who i thought was going to cry when Thune questioned his patriotism on Meet The Press. He should have given him a public beating instead of the meek whimpering he offered up).

Ah well, so much for pacifism. While this is certainly a legitimate tactic, I just don't think it will be a successful one right now (unless Bush tries go for for something that has no public support).

Typically, when the President and the opposition in the Congress get into a pissing contest over bugetary issues, the President wins by going on TV and telling Seniors that the other party wants to stop their social security checks, or something like that.

Bush is correct in saying that he gained a certain amount of capital from the election. As long as he doesn't piss it away on something stupid, the Congress would be well advised to accept the "olive branch", in Ashcroft's resignation.
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[townes]

DC, not surprisingly, i disagree. i understand the realpoltick argument behind it, but believe the democrats would be better off for the long term by defining themselves through the issues they stand up for, not by accomodating an extreme administration.

I also disagree on @sscroft, Gonzalez is no olive branch, in fact, i'm actually shocked they would nominate the poster child for torure as Attorney General at a time where the world is already in serious doubt about our commitment to human rights.

[Flagg the Wanderer]

Originally posted by jim_vh
I wanted this to be a thread about how the dems should confront bush. you have turned it into a bunch of bs about tax policy. :mad: :mad: :banghead: Okay, how about this:

There is nothing worse for the country and the economy than the government running a surplus. All that means is that Uncle Sam took too much of our money out of our pocket.

I'll also add that running a deficit isn't exactly a big deal. The GDP of the U.S. is about $11 trillion dollars. The national debt is about $7.4 Trillion. (http://www.brillig.com/debt_clock/) Would it be a big deal if a person making $110k/year had a $74,000 mortgage? Nope. The United States government is the only government in the history of the world (newer governments are probably exempt from this, BTW) that has NEVER ONCE defaulted on its debt.

Now, that's not a great comparison, of course, because the GDP isn't the same as tax revenue, but it's closer than you might think, because the money flowing through the U.S. systems is often multiply taxed through various transations (velocity of money concept.)

[jim_vh]

what i get from the above is that townes thinks it is a good idea, and everyone else thinks it wouldn't be a good idea but actually would prefer to talk about something else.

to me, this is exactly why it would be a good thing for the dems to do, if they really want to be an opposition party and bust bush's balls.

it wouldn't hurt the economy, as it wouldn't be much of a tax incresase in terms of gdp.

it wouldn't hurt most people, as it would only increase the taxes of those making over $200k.

it would help reduct the deficit and would help pay for the war.

politically it would force bush to do something he doesn't want to do, or have the govt shut down and concentrate everyones attention on what he really cares about, which is cutting taxes for rich guys.

[townes]

Originally posted by jim_vh
what i get from the above is that townes thinks it is a good idea, and everyone else thinks it wouldn't be a good idea

:eek:

no way!









That's a first.

[dchester]

Originally posted by townes
:eek:

no way!

That's a first. Did you mean today?
:D
________
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[spiderman]

Originally posted by Flagg Wanderer
Okay, how about this:

There is nothing worse for the country and the economy than the government running a surplus. All that means is that Uncle Sam took too much of our money out of our pocket.

I'll also add that running a deficit isn't exactly a big deal. The GDP of the U.S. is about $11 trillion dollars. The national debt is about $7.4 Trillion. (http://www.brillig.com/debt_clock/) Would it be a big deal if a person making $110k/year had a $74,000 mortgage? Nope. The United States government is the only government in the history of the world (newer governments are probably exempt from this, BTW) that has NEVER ONCE defaulted on its debt.

Now, that's not a great comparison, of course, because the GDP isn't the same as tax revenue, but it's closer than you might think, because the money flowing through the U.S. systems is often multiply taxed through various transations (velocity of money concept.)

Thanks for addressing the question that I posed to Jim early in this thread.

I can remember Perot back in 1992 making this his center piece issue, and I can also remember all my economics professors ripping his ideas and claims to shreds. It seems to be rearing its ugly head again, and all I'm asking is that if people (not you flagg) are going to keep bringing it up as a way to bash the President, please go a bit more in depth. That's all. :D

[jim_vh]

spiderman, as i explained long ago i didn't want this thread to be about some bs argument about tax or fiscal policy. since it has pretty much died out i will respond to you now.

your argument is nonsense. the guy with the mortgage is paying off his debts. the us is borrowing more. what would your economics professor say about a man who is borrowing annually borrowing 3.8% of his income to pay off day to day expenses? in addition, the only way that the us is able to keep borrowing so much is that the japanese and chinese central banks are buying our debt. without them, the interest rates go up.

the dems and reps worked together with bush one and clinton to show fiscal discipline during the 90s and the result was a balanced budget and paying off some debt.

bush 2 has blown that right out of the water. he is like a man with too many credit cards who also has a gambling problem.

[Mark_Henderson]

Originally posted by dchester
So, do you think the democrats should go for a national sales tax, to confront Bush?
:D

Personally, I favor a national flat tax on ALL income, whether it be capital gains, inheritance, dividends -- whatever, maybe with a graduated exemption for people below 40K or something. That would actually reduce the tax on wages because a greater portion of the burden would be spread to taxing non-wage income. It would also reduce the expense of running the IRS by simpliflying things.

[Mark_Henderson]

Originally posted by Flagg Wanderer
Would it be a big deal if a person making $110k/year had a $74,000 mortgage? Nope.

Flagg -

This is where your analogy falls short. Obviously, it is often strategically necessary to acquire debt. Someone taking on a mortgate is acquiring a significant asset for their debt -- a house. Someone who bought a house in Weston in 1974 on a 30 year mortgate would now have an asset that had increased ten-fold over the purchase price. Plus, it would have paid their rent to live somewhere nice for the last 30 years.

If the same man had taken on the 74K mortgage to finance a coke habit, the choice wouldn't have been as sound. When Dubya increases the deficit by primarily cutting taxes on the wealthy, this is a closer analogy than buying a house. It stimulates some growth by putting more money into the economy, but the government also crowds out investment because it needs to borrow money that would otherwise be available for investment in the private sector.

This is not the same as government borrowing to build a highway system, fight World War II, or provide college educations -- that's like investing in a house.

[jim_vh]

another place that analogy completely fails is that they ignore all the non-govt debt. out of that gdp has to be paid credit cards, mortgages, business debts, unfunded pensions, state govt bonds, etc etc etc.

he counts the income from all sources, but ignores the debts incurred by the same sources other than govt debts.

so who is this economics professor, anyway? what is his name and school? are you sure you didn't hear this on rush limbaugh or one of those other right wing blowhards?

[spiderman]

Originally posted by jim_vh
spiderman, as i explained long ago i didn't want this thread to be about some bs argument about tax or fiscal policy. since it has pretty much died out i will respond to you now.

your argument is nonsense. the guy with the mortgage is paying off his debts. the us is borrowing more. what would your economics professor say about a man who is borrowing annually borrowing 3.8% of his income to pay off day to day expenses? in addition, the only way that the us is able to keep borrowing so much is that the japanese and chinese central banks are buying our debt. without them, the interest rates go up.

the dems and reps worked together with bush one and clinton to show fiscal discipline during the 90s and the result was a balanced budget and paying off some debt.

bush 2 has blown that right out of the water. he is like a man with too many credit cards who also has a gambling problem.

Jim, what exactly is my argument? Sometimes I think people on this board don't actually read what anybody else writes, they just can't wait to sound off.

I haven't made any argument, I'm simply asking you to go more in depth. You've decided to tackle a very complex issue, and IMO you are over-simplifying.

If you are not interested in this becoming an economics thread fine. I was just reacting to your statement about the National debt, and I wanted further clarification on the problems that come along with it.

Your meager attempts to attack me by saying that I'm just some dumb Rush Limbaugh Ditto head, and your implication that somehow I'm lying, just further justify my belief that you don't really understand what you're talking about.

[jim_vh]

spiderman, you took offense to my response but i still would like to know this college professors name and university so i can dig up his email and ask him about this.

[spiderman]

Originally posted by jim_vh
spiderman, you took offense to my response but i still would like to know this college professors name and university so i can dig up his email and ask him about this.

Huh??? I don't think he'd appreciate it, since it was around 10 years ago...this is an odd request, I'm not about to start naming professors and institutions on a message board, in fact I'm concerned that I could get into trouble for doing so.

Look around, there are many professionals (not Rush Limbaugh) who will tell you that the national debt doesn't necessarily lead to oblivion, and that borrowing money in order to invest in the country can be a good thing and lead to further prosperity in the long run, so long as it is invested wisely.

I can see the point Mark is making that he thinks the money is being wasted, but the point you were making was that the democrats should block ANY attempt at increasing the national debt, I don't think that is always the wise choice, and the point my professor was making with regards to Perot was that "balancing" the budget (so to speak) just for the sake of balancing it, doesn't necessarily make sense, and in some instances may in fact become harmful to the growth and prosperity of the country.

You mentioned Japan buying up our debt, this is true, but are you saying that this situation isn't beneficial to both Japan and the US? If you say categorically NO, then I would ask that you examine the relationship a little closer.

My point was that your initial statement, was IMO too simplistic, and I was asking you too examine the situation more closely, and give your reasons for feeling this way.

[Mark_Henderson]

Originally posted by spiderman
I'm not about to start naming professors and institutions on a message board, in fact I'm concerned that I could get into trouble for doing so.


Actually, Professor Robert Reich at Brandeis supports my position entirely. I encourage you to contact him immediately. Be sure to tell him Mark Henderson on Pats Planet says hi. Also, if you can find out if he's able to buy suits in his size off the rack, I'm curious. Please let me know.

[jim_vh]

Originally posted by spiderman
Huh??? I don't think he'd appreciate it, since it was around 10 years ago...this is an odd request, I'm not about to start naming professors and institutions on a message board, in fact I'm concerned that I could get into trouble for doing so.

Look around, there are many professionals (not Rush Limbaugh) who will tell you that the national debt doesn't necessarily lead to oblivion, and that borrowing money in order to invest in the country can be a good thing and lead to further prosperity in the long run, so long as it is invested wisely.

I can see the point Mark is making that he thinks the money is being wasted, but the point you were making was that the democrats should block ANY attempt at increasing the national debt, I don't think that is always the wise choice, and the point my professor was making with regards to Perot was that "balancing" the budget (so to speak) just for the sake of balancing it, doesn't necessarily make sense, and in some instances may in fact become harmful to the growth and prosperity of the country.

You mentioned Japan buying up our debt, this is true, but are you saying that this situation isn't beneficial to both Japan and the US? If you say categorically NO, then I would ask that you examine the relationship a little closer.

My point was that your initial statement, was IMO too simplistic, and I was asking you too examine the situation more closely, and give your reasons for feeling this way.

why are you quoting a professor from an economic situation of 10 years ago? since that time the repubs and dems worked together to get the budget balanced, and dubya can in and blew that out of the water. your response implied that your alleged economics professor was dealing with a more recent snapshot of the economy. about your concerns about giving out his name, that sounds like nonsense.

borrowing to pay off todays every day expenses is different from investing in the future. the bush admin has blown away any investmenting in the future. and who are those professionals?

my point about the dems using the filibuster is to confront bush. he has been cutting taxes and NOT cutting spending, using borrowing to make up the difference. the dems should confront him to stop this policy and establish themselves as the voice of fiscal sanity.

you say that japan buying us debt is good for both parties, does this mean if capital one and providian give you a lot of credit it is 'good for both parties' for you to borrow all of it and spend it on daily expenses that you refuse to pay for?


my initial statement is that the us has cut taxes without cutting spending, resulting in huge deficitis and not much economic growth compared to the money spent. this is due to bush's mismanagement and focus on helping the rich to get richer. the dems should confront him and stop this erroneous policy.

[spiderman]

Originally posted by jim_vh
why are you quoting a professor from an economic situation of 10 years ago? since that time the repubs and dems worked together to get the budget balanced, and dubya can in and blew that out of the water. your response implied that your alleged economics professor was dealing with a more recent snapshot of the economy. about your concerns about giving out his name, that sounds like nonsense.

Originally posted by spiderman

Thanks for addressing the question that I posed to Jim early in this thread.

I can remember Perot back in 1992 making this his center piece issue, and I can also remember all my economics professors ripping his ideas and claims to shreds. It seems to be rearing its ugly head again, and all I'm asking is that if people (not you flagg) are going to keep bringing it up as a way to bash the President, please go a bit more in depth. That's all.

[spiderman]

Originally posted by jim_vh
and who are those professionals?

John Maynard Keynes

[spiderman]

Originally posted by Mark_Henderson
Actually, Professor Robert Reich at Brandeis supports my position entirely. I encourage you to contact him immediately. Be sure to tell him Mark Henderson on Pats Planet says hi. Also, if you can find out if he's able to buy suits in his size off the rack, I'm curious. Please let me know.

"Keynes’ basic idea was simple. In order to keep people fully employed, governments have to run deficits when the economy is slowing. That’s because the private sector won’t invest enough. As their markets become saturated, businesses reduce their investments, setting in motion a dangerous cycle: less investment, fewer jobs, less consumption and even less reason for business to invest. The economy may reach perfect balance, but at a cost of high unemployment and social misery. Better for governments to avoid the pain in the first place by taking up the slack.

The notion that government deficits are good has an odd ring these days. For most of the past two decades, America’s biggest worry has been inflation brought on by excessive demand. Inflation soared into double digits in the 1970s budget deficits ballooned in the’80s, and now a Democratic President congratulates himself for a budget surplus that he wants to use to pay down the debt. But some 60 years ago, when 1 out of 4 adults couldn’t find work, the problem was lack of demand."

Written by Robert Reich

the whole article:

http://www.jobsletter.org.nz/art/keynes.htm

[jim_vh]

For most of the past two decades, America’s biggest worry has been inflation brought on by excessive demand. Inflation soared into double digits in the 1970s budget deficits ballooned in the’80s

inflation happened during the 70s because of oil prices due to the creation of OPEC and a subsequent oil embargo. deficits skyrocketed during the 80s due to reagans supply side tax cuts, later partially offset by his middle class social-securiy tax increase.

during the last two decades inflation has not been a problem. they killed inflation during the latter parts of carters regime when volker {sp} jacked up interest rates to prevent borrowing and threw the nation into recession and killed carters reelection chances.

[spiderman]

Originally posted by jim_vh
inflation happened during the 70s because of oil prices due to the creation of OPEC and a subsequent oil embargo. deficits skyrocketed during the 80s due to reagans supply side tax cuts, later partially offset by his middle class social-securiy tax increase.

during the last two decades inflation has not been a problem. they killed inflation during the latter parts of carters regime when volker {sp} jacked up interest rates to prevent borrowing and threw the nation into recession and killed carters reelection chances.

Jim, you seem to be moving the goal posts again.

I just asked you to further explain why "paying off the deficit" and "removing all tax cuts" would be a good thing in all cases. You seemed shocked that any economics professor would ever be in favor of increasing government spending while lowering taxes, and basically accused me of lying.

So I named one of the most well known economist ever...

:thumb:

[Ballbustah]

I would hope that the Bush administraition would not increase spending and cut back on taxes.

How long can you float a defecit?
How long before it comes back to haunt you?
Will interest rates rise?
Will inflation rear it's ugly head?
Will poverty become more prevelant then it all ready is?

These are the questions that need to be answered.

[Flagg the Wanderer]

Phew, looks like I've let this thread go for too long.

Spiderman/Mark Henderson are pretty much spot on with the economic analysis. Keynes and his Latter-day disciple Reich both support the governmental intervention/deficit spending theory of pulling an economy out of recession. My gut (having studied economics somewhat but not as much as them, obviously) tells me that the theory is sound but the practice will fail because of the reporting lag and effecacy lag: most of the time the numbers don't show a recession until we're in it for about a year anyway, and often by that point we're out of it (reporting lag). Additionally, efficacy lag - the government starts spending, but that doesn't trickle through the economy right away...it takes time to spread its effects. If you combine the two, the government will likely aggrevate the economic cycles rather than smooth them unless it can be extremely accurate in predicitions about the direction of the economy. But what do I know.

Paul Voelker DID help to kill the inflation of the 70s by raising interest rates. Why did he do that? To curb borrowing to help to curb the excess demand that pushed prices up in the first place.

Demand was across the board, including oil. In the case of oil it was aggrevated because OPEC concurrently cut production...and other rising prices were aggrevated BY oil because of oil's connection to transportation of goods, heat, and other fixed costs of doing business.

But apart from the Keynesian theory, I think that deficit spending at this point is a very good idea, for the same reason that buying a house or creating some leverage debt right now is a good idea - interest rates are super low, and on the upswing.

Lets say, hypothetically, that you can get debt at 4.84% (like the US Government can as of 11/1/04) at 20 years. As interest rates rise, you're in a beautiful position - as other people finance debt at 7, 9, 11 percent, you can work with your sub 5% debt at an automatic advantage. If comperable interest rates are at 11% now, and you're paying 5% on your debt, then you are automatically making 6% on your money due to your improved leverage.

In my opinion, the US Goverment should be borrowing more than it can spend right now...MUCH MORE. Rates are on the rise.

Remember, most of us aren't old enough to really remember operating in a high interest rate environment. It's mind-boggling to think that you could have tied up 30 year treasury bonds in teh 1980s for percentages in the mid-teens. You'd still be earning that for the next 10 years if you had bought those then. Think about that in terms of guaranteed returns for a minute, than think about your portfolio, and how it's doing percentage wise. And consider the limited risk...

And now consider that we're still paying that interest, if you want to know why holding low interest debt in a rising rate environment is such an advantage. Consider the converse, as it happened in the 80s.

[Ballbustah]

Now I have heard everything.

Defecit is good because it raises interest rates.

I'm about to rip my Kitchen apart... I'm sure gonna be happy with those raised interest payments.

[Flagg the Wanderer]

Originally posted by Ballbustah
Now I have heard everything.

Defecit is good because it raises interest rates.

I'm about to rip my Kitchen apart... I'm sure gonna be happy with those raised interest payments. Eh? That's not what I said at all. Not even remotely. I said the deficit is good (NOW) because it takes advantage of LOWER interest rates. I said that the rates were LIKELY to rise, and so borrowing now makes sense.

And it's still a good time to rip your kitchen apart, though it would have been better to do it 6 months ago. Believe me, hold that debt for a couple years as leverage, and you'll be singing a different tune.

[Ballbustah]

Paul Voelker DID help to kill the inflation of the 70s by raising interest rates. Why did he do that? To curb borrowing to help to curb the excess demand that pushed prices up in the first place.

But apart from the Keynesian theory, I think that deficit spending at this point is a very good idea, for the same reason that buying a house or creating some leverage debt right now is a good idea - interest rates are super low, and on the upswing.

In my opinion, the US Goverment should be borrowing more than it can spend right now...MUCH MORE. Rates are on the rise.

[spiderman]

Originally posted by Flagg Wanderer
Phew, looks like I've let this thread go for too long...

...Consider the converse, as it happened in the 80s.

I just re-read this, and I can't find anyplace where Flagg draws any type of cause and effect relationship between the deficit and interest rates.

[Ballbustah]

Yeah....

You can have the deficit at an all time high and it's not going to effect interest rates and inflation...


Keep telling yourself that...
Maybe it will become true someday.


There is, however, a danger that deficit spending may create inflation -- or encouraging existing inflation to persist. (In the United States, this is seen most clearly when Vietnam-war era deficits encouraged inflation.)

It has already been stated that increasing interest rates may be used to battle inflation.

[spiderman]

Yeah....

You can have the deficit at an all time high and it's not going to effect interest rates and inflation...


Keep telling yourself that...
Maybe it will become true someday.

Do you remember the 1980s? If so what happened?

the Deficit went (which way?) and inflation went (which way?) and interest rates went (which way?)


There is, however, a danger that deficit spending may create inflation -- or encouraging existing inflation to persist. (In the United States, this is seen most clearly when Vietnam-war era deficits encouraged inflation.)

It has already been stated that increasing interest rates may be used to battle inflation.

You were talking about the (deficit and interest rates) and now you're talking about (interest rates and inflation)

I said that Flagg never mentioned a cause and effect relationship between "the deficit" and "interest rates" or "the deficit" and "inflation"

Do you see how you're tripping yourself up???

feel free to read this for enlightenment:

http://www.cato.org/pubs/pas/pa-517es.html

[Flagg the Wanderer]

Originally posted by Ballbustah
Yeah....

You can have the deficit at an all time high and it's not going to effect interest rates and inflation...


Keep telling yourself that...
Maybe it will become true someday.


There is, however, a danger that deficit spending may create inflation -- or encouraging existing inflation to persist. (In the United States, this is seen most clearly when Vietnam-war era deficits encouraged inflation.)

It has already been stated that increasing interest rates may be used to battle inflation. Yes, increasing interest rates can be used to battle inflation.

Deficit spending increases the risk of inflation by artificially increasing demand. Why is that a bad thing, though? Minor inflation is a sign of a healthy economy. It's become a bugaboo in mainstream media because of the problems of the 70's.
The risk runs both ways - the larger risk to the economy in terms of scale of problems created is DEflation. With the current rise in oil prices and housing costs, that isn't a worry currently. But as recently as 4 years ago, any number of economists were voicing legitimate concern over the risks of deflation. Deflation is a larger risk in a depression or recession, and deficit spending can help to stave off that risk.

My point about deficit spending, Bustah, had nothing to do with any of the above. Re-read. *ALL* I said was that borrowing money now is a smart thing to do, because interest rates will likely be rising. Why not finance, say 50% of NEXT year's spending at 5% now instead of at 6.5% next year? Simple point.

[Ballbustah]

I understand what Flag is saying but how many people can and will justify nexts years expenses this year? I think not too many.



spiderman...
You remember the 70's?

[spiderman]

Originally posted by Ballbustah
spiderman...
You remember the 70's?

'bustah you said

"maybe it will come true someday"

and I responded with "the 80s"...

[Ballbustah]

Yeah...

But do you remember the 70's?

If you do not you are missing a big piece to the puzzle.

[spiderman]

Originally posted by Ballbustah
Yeah...


So when you say "yeah" I'm guessing you mean:

Yes, spiderman when I said, "Keep telling yourself that...
Maybe it will become true someday." I was actually wrong, thank you for pointing out to me that in the 1980s it DID come true...

[Mark_Henderson]

Originally posted by Flagg Wanderer
Eh? That's not what I said at all. Not even remotely. I said the deficit is good (NOW) because it takes advantage of LOWER interest rates. I said that the rates were LIKELY to rise, and so borrowing now makes sense.

And it's still a good time to rip your kitchen apart, though it would have been better to do it 6 months ago. Believe me, hold that debt for a couple years as leverage, and you'll be singing a different tune.

Obviously, a few of us took some economics in college. But, I think as armchair economists, you're losing track of some basic facts.

Yes, it is relatively better to acquire debt at a time of lower interest rates. But, that debt does not necessarily give you any "leverage". For example, if you borrow a bunch of money in a time of historically low interest rates and throw it away (give it to charity, blow it on drugs, whatever), it's not relevant that interest rates may be twice as high 5 years later.

If the government is borrowing money in the current low interest rate environment and using that money to buy a military base, or something of real value, then yes, they will have purchased it on the cheap. They will have an asset that they could later sell and then lend out the money at a higher interest rate.

But, increasing debt by decreasing tax revenue collected, primarily from the wealthy, doesn't buy the US government any "leverage". If it's such a great deal to be blindly acquiring debt in times of low interest rates, the rich would be happy to give the Bush tax cuts back to the government and improve their "leverage" by borrowing that money themselves.

[Flagg the Wanderer]

Originally posted by Mark_Henderson
Obviously, a few of us took some economics in college.
Hmm. That may be true. I know I did, before I went on to become an accountant and financial manager for international mutual funds while I saved up for law school to study international trade and finance law.

But I do so like to be talked down to. It's endearing.

But, I think as armchair economists, you're losing track of some basic facts.

Yes, it is relatively better to acquire debt at a time of lower interest rates. But, that debt does not necessarily give you any "leverage". For example, if you borrow a bunch of money in a time of historically low interest rates and throw it away (give it to charity, blow it on drugs, whatever), it's not relevant that interest rates may be twice as high 5 years later.
I'm pretty sure I didn't suggest that, but even so, I think you're wrong. If you assume that you're going to blow the money at some point (an extremely safe investment considering that we're talking about the United States government), you're absolutely better off to be paying a 5% interest rate on money that has gone bye bye than on waiting and blowing it later on and paying a higher rate.

If the government is borrowing money in the current low interest rate environment and using that money to buy a military base, or something of real value, then yes, they will have purchased it on the cheap. They will have an asset that they could later sell and then lend out the money at a higher interest rate.
True. Although the government doesn't tend to spend with an eye towards investment. The government, by its nature, does not behave in the marketplace like a typical market participant. It does, however, spend money. And it borrows in order to spend, particularly in wartime.

But, increasing debt by decreasing tax revenue collected, primarily from the wealthy, doesn't buy the US government any "leverage". If it's such a great deal to be blindly acquiring debt in times of low interest rates, the rich would be happy to give the Bush tax cuts back to the government and improve their "leverage" by borrowing that money themselves. Actually, that's more or less exactly what is happening right now (apart from the giving it back to the government part.) If you do some research on the borrowing rate of bulk monies, they are through the roof right now - people who can afford to do so are borrowing enormous amounts of money over the past 12 months, to invest and use in a number of different ways. It's cheap money, and it doesn't come around very often.

[dropKickMurphy]

All this discussion about the pros and cons of the deficit seems to be missing an important point.

The deficit increases when the government spends more money than it takes in.

Just as my debt increases if I spend more than I make. So I have 2 choices: make more or spend less. For example, I can take a second job; or I can skip that vacation this year. Either approach will be just as effective in reducing my deficit.

It's not quite as simple for the government. In order to take in more money, the government must raise taxes. But, higher tax rates create a drag on the economy, which is a limiting factor on how much additional revenue is generated. Cutting spending is a far more effective (but politically difficult) method of reducing the deficit.

While Greenspan was issuing warnings earlier this year about the potential harmful effects of the deficit , he also warned that raising taxes would be even more harmful to the economy.

Bush's tax cuts did not just benefit the wealthy. They benefited every taxpayer. They allowed more people to spend and invest more money in the private sector; which is far more efficient than the public sector in making productive use of that money to create new jobs and economic growth.

What Bush needs to do is reign in the spending. There are some tough choices to be made: healthcare spending, Social Security, defense of Western Europe, to name a few.
But this president was elected by conservatives, not liberals. People who believe, correctly, that the best thing the government can do to induce growth in the economy is to keep taxes low and reduce spending.

[jim_vh]

Originally posted by dropKickMurphy
All this discussion about the pros and cons of the deficit seems to be missing an important point.

The deficit increases when the government spends more money than it takes in.

Just as my debt increases if I spend more than I make. So I have 2 choices: make more or spend less. For example, I can take a second job; or I can skip that vacation this year. Either approach will be just as effective in reducing my deficit.

It's not quite as simple for the government. In order to take in more money, the government must raise taxes. But, higher tax rates create a drag on the economy, which is a limiting factor on how much additional revenue is generated. Cutting spending is a far more effective (but politically difficult) method of reducing the deficit.

While Greenspan was issuing warnings earlier this year about the potential harmful effects of the deficit , he also warned that raising taxes would be even more harmful to the economy.

Bush's tax cuts did not just benefit the wealthy. They benefited every taxpayer. They allowed more people to spend and invest more money in the private sector; which is far more efficient than the public sector in making productive use of that money to create new jobs and economic growth.

What Bush needs to do is reign in the spending. There are some tough choices to be made: healthcare spending, Social Security, defense of Western Europe, to name a few.
But this president was elected by conservatives, not liberals. People who believe, correctly, that the best thing the government can do to induce growth in the economy is to keep taxes low and reduce spending.

the economy ran very well with the higher tax rates at the end of the clinton years. it was after bush came in and blew the suplus out of the water with tax cuts aimed at the high end that the deficit blew up.

about everyone benefitting:
by income quintile:
<20% $87 per year
20 to 39% $160 per year
40 to 59% $827 per year
60 to 79% $1500 per year
80 to 95% $3144 per year
top 1% $59,292 per year
link (http://tinyurl.com/26xn5)

how much of a difference is that 1500 or less per year going to make for 80% of the people in this nation? and why is it better to borrow the money from the top 1% in the form of govt bonds rather tha tax it from them?

and about dragging the economy down, the problem with taxes is that it reduces spending. the top !% wont be spending that extra $50k anyway, it will just go to their investments. if you gave that money to the 40% and lower bunch, they would spend it and jack up the economy.

[dropKickMurphy]

Originally posted by jim_vh
....and about dragging the economy down, the problem with taxes is that it reduces spending. the top !% wont be spending that extra $50k anyway, it will just go to their investments. if you gave that money to the 40% and lower bunch, they would spend it and jack up the economy.

What happens to this money when it goes into these investments? It fuels research and development of new products ...provides capital for entrepreneurs to launch new and innovative companies... resulting in the creation of new jobs. Every dollar invested in the private sector does far more to create new opportunities for people than a dollar that is swallowed up by the government.

I agree 100% that the wealthy should be paying their fair share. For example, I think it is insane for taxpayers to be carrying the enormous cost of new stadiums for the benefit of billionaires like Paul Allen.

Anytime taxes are raised it seems to be the fair thing to do to shift more of the burden to the wealthy. But, when taxes are rolled back, many people seem to always want the lower income people to get the lion's share of the benefit.

It seems fair, but look at the bigger picture. If we continue in this direction, do we want to end up like some European nations where higher income people can have 90% of their income taken by taxes?

It isn't just the ultra wealthy who are affected by this. By punishing people for their success, we discourage people from trying to build wealth. We discourage investment. More importantly, we send the message to people that this country believes that there is something inherently wrong with striving for financial success.

If that's what you believe, you're entitled to your opinion. But if you do believe this.... that a primary role of government should be to redistribute wealth from the haves to the have-nots... then let's call it what it really is.

Socialism.

[Mark_Henderson]

Originally posted by dropKickMurphy
Anytime taxes are raised it seems to be the fair thing to do to shift more of the burden to the wealthy. But, when taxes are rolled back, many people seem to always want the lower income people to get the lion's share of the benefit.

It seems fair, but look at the bigger picture. If we continue in this direction, do we want to end up like some European nations where higher income people can have 90% of their income taken by taxes?

... then let's call it what it really is.

Socialism. [/B]

DKM -

Since you agree that some degree of progressive taxation makes sense, then if you also agree that at some point a fair distribution of the tax burden has been reached, the equitable way to roll back taxes would be to maintain the percentage of the tax burden paid by people of different income levels.

If you agree with the added deficit spending incurred because of the Bush tax cuts, then you have to agree with two facts:

1. The tax rates during the Clinton years were so high that they were a drag on the economy. Given that these were historic boom years, I think that's a tough argument to make.

The biggest chunks of the federal budget go to defense, social security & medicare. Social security is underfunded and the defense budget ain't going to be dropping any time soon. So, unless you can pull a rabbit out of the federal budget hat, why is it imperative to cut revenue (and to pass legislation to make those cuts permanent), when the previous level of taxation was clearly not so high as to hamper the economy?


2. The degree of progressive taxation by income level during the Clinton years was so extreme that it unfairly overtaxed the rich.

You agree that some progressive taxation is ok, but the Bush cuts on capital gains, inheritance & income tax have shifted the tax burden so that a lesser percentage of the total tax load is paid by the upper brackets than during the Clinton years. Warren Buffet said that Bush's capital gains tax cuts reduced his marginal tax rate to that of his maid.

Is it socialism to say that the relative tax bracketes should remain where they were during the Clinton years? Did Bill Gates make his billions under a socialist system?

Your use of the word socialism doesn't seem to me to be much different than people referring to the Bush administration as Nazis. I don't think even Jerry Brown would propose a 90% tax bracket. That's just a straw man, like when the NRA claims that if there's any regulation at all on Uzi's, the government is going to confiscate everybody's guns.

[jim_vh]

if they won't raise the taxes they should cut the spending. where willl the repubs find $440 billion in spending cuts?

[dropKickMurphy]

Originally posted by Mark_Henderson
DKM -

Since you agree that some degree of progressive taxation makes sense, then if you also agree that at some point a fair distribution of the tax burden has been reached, the equitable way to roll back taxes would be to maintain the percentage of the tax burden paid by people of different income levels.

If you agree with the added deficit spending incurred because of the Bush tax cuts, then you have to agree with two facts:

1. The tax rates during the Clinton years were so high that they were a drag on the economy. Given that these were historic boom years, I think that's a tough argument to make.

The biggest chunks of the federal budget go to defense, social security & medicare. Social security is underfunded and the defense budget ain't going to be dropping any time soon. So, unless you can pull a rabbit out of the federal budget hat, why is it imperative to cut revenue (and to pass legislation to make those cuts permanent), when the previous level of taxation was clearly not so high as to hamper the economy?


2. The degree of progressive taxation by income level during the Clinton years was so extreme that it unfairly overtaxed the rich.

You agree that some progressive taxation is ok, but the Bush cuts on capital gains, inheritance & income tax have shifted the tax burden so that a lesser percentage of the total tax load is paid by the upper brackets than during the Clinton years. Warren Buffet said that Bush's capital gains tax cuts reduced his marginal tax rate to that of his maid.

Is it socialism to say that the relative tax bracketes should remain where they were during the Clinton years? Did Bill Gates make his billions under a socialist system?

Your use of the word socialism doesn't seem to me to be much different than people referring to the Bush administration as Nazis. I don't think even Jerry Brown would propose a 90% tax bracket. That's just a straw man, like when the NRA claims that if there's any regulation at all on Uzi's, the government is going to confiscate everybody's guns.

My use of the term "socialism" was in response to the statement:
"the top 1% wont be spending that extra $50k anyway, it will just go to their investments. if you gave that money to the 40% and lower bunch, they would spend it and jack up the economy."

I stand by my assertion that a person who believes that a primary role of government is to redistribute wealth is, by definition, a socialist.
I don't buy that this is even remotely similar to comparing the US to Nazi Germany. Socialism is an economic model that I don't happen to believe in. That doesn't mean that people who do agree with socialism are evil in any way. On ther other hand, no one could argue that what the Nazis stood for was anything but evil.

We do agree with each other that it is entirely fair for the wealthiest people to bear the highest tax burden. I think it would be fair to come to an agreement as to what percentage of the tax burden they should carry; and subsequent tax increases and cuts should keep them paying at this level.

Where I disagree with you is when you state "...the Bush cuts on capital gains, inheritance & income tax have shifted the tax burden so that a lesser percentage of the total tax load is paid by the upper brackets than during the Clinton years..."

The figures from the Congressional Budget Office do not bear this out. In fact, they show that the % of the income tax burden carried by the highest income groups actually increased after the Bush tax cuts.

Look, we both know that there are plenty of ways to manipulate statistics to support either side of the argument. Arguments that the lowest income groups did not receive their fair share of the cuts are skewed by the fact that the lowest income groups include many people who paid no tax at all....before and after the tax cut. Including these people, who obviously did not get a tax cut, in the figures makes it appear that the lower income brackets did not receive their share of the cuts.

[Mark_Henderson]

Originally posted by dropKickMurphy
My use of the term "socialism" was in response to the statement:
"the top 1% wont be spending that extra $50k anyway, it will just go to their investments. if you gave that money to the 40% and lower bunch, they would spend it and jack up the economy."

I stand by my assertion that a person who believes that a primary role of government is to redistribute wealth is, by definition, a socialist.
I don't buy that this is even remotely similar to comparing the US to Nazi Germany. Socialism is an economic model that I don't happen to believe in. That doesn't mean that people who do agree with socialism are evil in any way. On ther other hand, no one could argue that what the Nazis stood for was anything but evil.

We do agree with each other that it is entirely fair for the wealthiest people to bear the highest tax burden. I think it would be fair to come to an agreement as to what percentage of the tax burden they should carry; and subsequent tax increases and cuts should keep them paying at this level.

Where I disagree with you is when you state "...the Bush cuts on capital gains, inheritance & income tax have shifted the tax burden so that a lesser percentage of the total tax load is paid by the upper brackets than during the Clinton years..."

The figures from the Congressional Budget Office do not bear this out. In fact, they show that the % of the income tax burden carried by the highest income groups actually increased after the Bush tax cuts.

Look, we both know that there are plenty of ways to manipulate statistics to support either side of the argument. Arguments that the lowest income groups did not receive their fair share of the cuts are skewed by the fact that the lowest income groups include many people who paid no tax at all....before and after the tax cut. Including these people, who obviously did not get a tax cut, in the figures makes it appear that the lower income brackets did not receive their share of the cuts.

DKM - I agree with you that stats can be manipulated in a variety of ways and we could both Google up multiple examples. But, the CBO numbers you posted are so counterintuitive -- that the Bush tax cuts actually redistributed the burden MORE to the wealthy, that I think they must be leaving something out. In addition to income taxes, do these figures also account for the massive Bush cuts in capital gains and estate taxes? Karl Rove did some effective marketing by changing the terminology from "estate tax" to "death tax", but the fact is, people in the lower 50% usually have neither capital gains nor estates; they're living from paycheck to paycheck.

As for your use of the term "socialist", it seems that we'd both agree that there's a pretty wide swath of ground between darwinian Adam Smith & socialism. How is it that any tax structure which is somewhat to "the left" of another is "socialist"? If Bush were to die tomorrow and Cheney proposed a tax program with twice the cuts of Bush's, that did indisputably give more back to the wealthy, would those who support the current Bush plan then be socialists?

Socialism may not have the evil connotations of Nazism (though to listen to AM radio it would be hard to tell), but to dichotomize in this way isn't much different than calling a right wing administration "fascist" or "reactionary" or whatever term one might choose.