The Democrats have it wrong

Would have to disagree as this presents a sense of entitlement for the wealthy created by the republicans which can distort what is possible from democratic government authority.

Under President Obama's job initiative policy He imposed financial penalties on companies that profit from Americans but move offshore to limit costs, He also imposed some tariffs on Chinese imports to help poorer American manufacturers have a level playing field. For the above assumption to be remotely possible it would mean that there is an absolute free market that disregards the interests of the American people.

Ultimately this means that billionaires and wealthy corporations will have to accept higher tax rates or there will be democratic laws made that hinder their profitability on American soil.

 

The private sector is doing just fine for those companies who outsource and/or sell into the global economy. The millions of small US businesses are kind of like the tail on the dog in the sense they are knocked around based on how the home economy is doing while the larger businesses involved in the global economy just keep growing.

If we're to employ 10-30 million people in the near term, I think the impetus for this comes first from the larger companies, which in turn excites the local economies. In order for the larger companies to increase employment by 10-30 million in the USA, we have zero choice but to figure out how to compete in the global economy...no matter what this means from lowering wages, to reducing taxes/regulations, to trade agreements, etc.

 

If we exclude FICA taxes which are dedicated welfare taxation (imposed by Democratic adminstrations) then higher income earners always pay a higher income tax percentage on net income than lower income workers.

Of course I've always objected to the programs that FICA taxes support as they are crappy programs but liberals like them so I assume they like the fact that they are funded with regressive taxation as well. They were created by liberal adminstrations so who's to blame for that?

But if we want to actually address the wealthy paying a higher percentage all of the time then we need to dump income taxes completely and replace them with a consumption tax with prebates. While everyone pays the same rate the prebate is proportional relative to the purchase of new goods and services. For those that purchase only the necessities, which the prebate covers, then that individual pays zero in net taxes. For those that spend millions of dollars on new goods and services the prebate is so insignificant as to not matter at all. The consumption tax is the only tax that is truely progressive and absolutely fair. Everyone pays the same rate and everyone get the same prebate but those who spend more pay more in taxes proportionate to their spending.

Spending, not income, is a better foundation for taxation.

 

OK, generally. But we are not talking about what has always happened.

No one said anything about "prebates".

 

A simpler way would be to not tax staple food, a portion of housing expense (amount defined by the community, NYC being much higher than small town KS), the first $10K of a car purchase, a set of medical / dental procedures, etc. Done right, the poor pay little in consumption tax.

Consumption tax doesn't penalize savings, but does penalize credit purchase.

 

I just clicked on that and I can already see problems. For example, I can only cut foreign aid in half. Why can't I get rid of it entirely? Secondly, "eliminate earmarks" carries a savings of $14 billion, even though in reality, it wouldn't save a cent. Then there's some vague stuff like "cut federal whatever by x amount", without actually telling me what I'm cutting or who I'm firing. Then, I'm not even given options like "completely get rid of medicaid" or "cut military budget in half"

Regardless, yeah, balancing the budget without raising taxes is insanely easy.

 

In discussions of a consumption tax replacing income taxes "prebates" have always been a condition for the consumption tax. This is admittedly different that what some politicans have proposed when they address a national sales tax or a value added tax that would be in addition to income taxes.

A consumption tax without a prebate would be as regressive as FICA taxes which is unacceptable IMO. The level established for the prebate also establishes how progressive the consumption tax is. That is one reason I oppose the FairTax.org proposal as it is not progressive enough. FairTax.org proposes that the prebate level be established at the poverty level (about $10K/yr) while I've previously proposted it should be double the poverty level (about $20k/yr). The actual prebate is based upon the consumption tax rate multipled by the prebate level (e.g. a 25% tax rate with a $20K level would equal a $5K/yr prebate). This would be very progressive for someone only earning $20K/yr as they would receive their full $20K in wages (no FICA or income taxes) plus an additional $5K/yr as a prebate increasing their disposable income from less than $18,500 (FICA taxes withheld alone) to $25K/yr.

But this really belongs in other discussions as once again the topic on this thread is really that expendature reductions must come before any additional taxation is addressed. I would place it in this context by the analogy of a individual. If a person's expendatures are exceeding their income the first thing the person should attempt to do is reduce expendatures. If that isn't enough then they would look for additional means for obtaining more income such as taking on a second job. The American People are already working a fulltime job to pay taxes and before the government asks them to take on a second job to pay more taxes it needs to first reduce expendatures as much as possible.

 

The post to which I responded said nothing about prebate.

I agree that a payment would make an otherwise regressive consumption tax more progressive on the bottom end, and only make it regressive on the top end.

 

Obviously some things get missed and without a prebate a consumption tax would be highly regressive. On the flip side a consumption tax can be as progressive as people want it to be based upon the "prebate level" although the higher the prebate level the higher the tax rate has to be. There is a balance there somewhere and that would be key.

Of course any tax system really needs to pay for the expendatures. Where I have the greatest heartburn isn't with government borrowing during serious economic emergencies. My heartburn is having deficit spending during average or better years in the economy. There is no excuse for those deficits and it robs the ability of the government to respond during serious economic emergencies.

Of note I didn't consider the recent recession to be a serious economic emergency. Bad to be sure but it did not endanger the country. It only endangered multi-millionaires. The unemployment was and is certainly a problem for many but none of the spending so far has done anything to reduce unemployment. It attacks a symptom and not the cause of the recession.

 

Few of the 8 million who lost their jobs or millions more who lost their homes were millionaires.

 

Originally Posted by perdidochas View Post
Please show the figures and/or a source.

I think it's wrong:

Using 2008 tax data (latest I could find on IRS website easily)

http://www.irs.gov/taxstats/indtaxst...129270,00.html

I chose the Individual income tax (not business) of those making $100K or more. The total amount of taxable income was 1,085,707,695,000, or roughly $1 trillion dollars. Now, that's not using Obama's definition of rich, but a tougher version of rich, namely $100k or above (upper middle class), and it's taking ALL of their income.

Using the Obama definition of rich ($200k and above), we get a paltry
$340,514,046,000. Again, that's taking ALL of their income.


Hmm, we were sold social security as a retirement plan that we paid into. Why should it be need-based?

Table 4a 2008

 

Germans pay high taxes.

 

Absolutely true and TARP ensured that these millionaires, many of which were foreigners, didn't even lose any money or, at worse, only lost a very small amount of money. Then, if that wasn't enough, to add insult to injury the Democratic controlled Congress removed the one redeeming part of TARP where money repaid to the government was to be used to pay off the borrowing for TARP. This money was added to the Stimulus Package spending and frittered away by the Federal government.

And yes, about 8 million Americans lost their jobs. These jobs were predominately supported by new home construction whether directly or indirectly. The fact was that we'd been building too many new homes which lead to over-employment in this field and when the new home market topped out not only did these jobs no longer exist but we had about 2.5-3 million excess homes. Similiar to the auto industry that peaked at 18 million new cars when the sustainable rate was only 13 million new cars and the demand dropped to 9 million the new home construction industry has dropped well below "average" demand and will stay there until the marketplace consumes the excess new homes already built.

The Stimulus Package didn't address this problem at all. Predominately the Stimulus Package distributed money to the States for infrastructure (roads, ect.) projects where there was already full employment. It did nothing to address those out of work from the new home construction industry. Hanging drywall and building a bridge really have nothing in common.

 

I disagree the Stimulus didn't address the problem, as both temporal evidence and multiple independent analyzes show.

But the point is your statement:

Of note I didn't consider the recent recession to be a serious economic emergency. Bad to be sure but it did not endanger the country. It only endangered multi-millionaires.

is IMO wrong based on the evidence I presented. The recession endangered millions who were not multi-millionaires. It was also very much a serious economic emergency.

 

"The requested page does not exist. Please check your URL."

Do you have a good link?

1) Obama never gave that definition of "rich" that I've found. You've been snookered by conservative propaganda.

2) I'm not sure what you mean by "taxable income." The total amount of income is about $13 trillion, which is gross personal income. All of that it potentially taxable. $1 trillion in the approximate amount of annual income tax revenue over the past 12 years.

The richest 10% garned about 41% of the total income.

http://cbo.gov/ftpdocs/98xx/doc9884/12-23-EffectiveTaxRates_Letter.pdf

That would mean the richest 10%'s total income is in the neighborhood of $5.3 trillion dollars.

Because many don't want to pay more taxes and we have huge deficits.

"The requested page does not exist. Please check your URL."

Do you have a good link?

 

I funished the link where President Obama established that the wealthy were those earning over $200K/yr for a single person and $250K/yr for a couple during the discussion over whether the extend the Bush era tax cuts. Perhaps that post was missed.

 

At least this differentiates between several millions losing their jobs and a serious economic emergency. Yes, people losing their jobs is a personal emergency for them and their family but it is not a national emergency.

As for the economy being threatened by the recession that never really happened. Yes, about 5% of the banks would have and did go belly up. Their assets were purchased by other banks. We were no where near the Depression of the 1930's and virtually all economists stated in 2007-2008 that the US didn't face the possibility of a depression like the 1930's because our economy was far more diversified today.

As for addressing the fundamental reason for the 2008 recession how did the Stimulus provide any relief for the new construction home industry. How many new homes did it build employing those that had lost their jobs? As I properly noted drywallers, framers, residential electricians and plumbers are not trained or suited to work on highways and yet that is where a large piece of the Stimulus money was spent (at least in my state).

Obviously when hundreds of billions of dollars are dumped into the ecomomy it creates jobs but the problem was that it didn't create jobs for those that were out of work in the new home construction industry. Until new homes are needed again nothing the government does will affect the reason behind the unemployment numbers we have today.

 

I've never seen such a link, sorry.

 

You are looking at what actually happened versus the potential situation.

I agree that we averted a crisis. But it was very much an emergency in late 2008 and early 2009.

This makes no sense. If the Govt created jobs it does have an affect on the unemployment numbers. As does that fact that about a million jobs have been lost by terminations by state and local governments.

 

http://www.politicalforum.com/4382092-post415.html

 

Thanks, but that post and cite doesn't have Obama saying anything, much less defining the "rich" as being over 200/250k.

Until someone shows me otherwise, I stand by my statement:

1) Obama never gave that definition of "rich" that I've found. You've been snookered by conservative propaganda.

 

Actually, he has mentioned as much in several speeches.
This is one of them.

[ame="http://www.youtube.com/watch?v=z-SavgJlBLA&feature=related"]http://www.youtube.com/watch?v=z-SavgJlBLA&feature=related[/ame]

 

Did you watch your own video?

The only thing Obama said was that folks making more than $97,000 are the "upper class."