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View Full Version : The Fiscal Cliff - Part 2



Marvin S
12-12-2012, 07:00 PM
Obviously no one wanted to answer the questions asked in the OP of Part 1 so will try a new tack. This is for those who are obviously smitten with class envy :(.


Statistics from 2010 show that the top 1% of taxpayers (AGI of $369,691 or more) pay 37.4% of all federal income tax, the highest 5% (AGI of at least 161,579 & inclusive of the original 1%) paid 59.1%, while the top 10% (AGI of at least 116,623) which is inclusive of the previous 2 stats paid 70.6% of all federal income taxes.

Meanwhile the bottom 50% of all filers paid 2.36% of the total federal income tax.


Which means that the middle 40% paid 27.04% of all the federal income taxes, which I would venture to guess would include most who post here.

If my AGI was only $369,691 & I was being demonized by the POTUS as rich I would be quite upset.

There is not enough money among the wealthy to cure congresses spending habit & pay off the debt. Those among the very wealthy that say they should pay more can without asking others to, their support means they expect to get a break unavailable to the other wealthy :(. What sucks is that many of you are falling for that line.

So I'll try to present it in a manner you understand. The attack on the wealthy is an attempt to gain the viriginity of the taxpayer, nothing less. After the deflowering everything will be much easier. & you can see from the stats that you will be on the list.

Should the R's cave I will be very disappointed, fortunately Boehner has as his two sidekicks in the negotiations, Ryan & Kantor. Hopefully they will be successful in cutting tax breaks of which the ability of the hedge funders to take ordinary income & have it taxed at CG rates would be one + the second home deduction of interest should be eliminated. There are others, including in the farm bill. Because of capital demands there will be 70,000 less farmers at the end of this decade, should we continue to subsidize those very wealthy farmers?

murral stark
12-12-2012, 07:07 PM
Obviously no one wanted to answer the questions asked in the OP of Part 1 so will try a new tack. This is for those who are obviously smitten with class envy :(.




Which means that the middle 40% paid 27.04% of all the federal income taxes, which I would venture to guess would include most who post here.

If my AGI was only $369,691 & I was being demonized by the POTUS as rich I would be quite upset.

There is not enough money among the wealthy to cure congresses spending habit & pay off the debt. Those among the very wealthy that say they should pay more can without asking others to, their support means they expect to get a break unavailable to the other wealthy :(. What sucks is that many of you are falling for that line.

So I'll try to present it in a manner you understand. The attack on the wealthy is an attempt to gain the viriginity of the taxpayer, nothing less. After the deflowering everything will be much easier. & you can see from the stats that you will be on the list.

Should the R's cave I will be very disappointed, fortunately Boehner has as his two sidekicks in the negotiations, Ryan & Kantor. Hopefully they will be successful in cutting tax breaks of which the ability of the hedge funders to take ordinary income & have it taxed at CG rates would be one + the second home deduction of interest should be eliminated. There are others, including in the farm bill. Because of capital demands there will be 70,000 less farmers at the end of this decade, should we continue to subsidize those very wealthy farmers?

We subsidize the oil companies, so why shouldn't we subsidize the farmers. I would rather see it go to farmers than oil companies. Are you saying to tax the capital gains income as regular income? If so, I would support that as well as the 2nd home deduction of interest. The horse deduction has to go too.

Marvin S
12-12-2012, 07:14 PM
The horse deduction has to go too.

Actually the Horse's Azz deduction needs to go :o.

murral stark
12-12-2012, 07:18 PM
Actually the Horse's Azz deduction needs to go :o.

Who gets that deduction?:D I was talking about Romney's horse deduction of obscene proportions.

Marvin S
12-12-2012, 07:26 PM
Who gets that deduction?:D I was talking about Romney's horse deduction of obscene proportions.

Were it available you'd be 1st in line :razz:. Someone posted here that Mrs Romney was able to take a $59 deduction total. But you are so busy with your unknowledgeable class envy you probably missed that part :(.

Franco
12-12-2012, 08:47 PM
Should the Repubs cave to Obama's demands? No! Will they? Yes.

If the subsidies to oil companies go, look for Exxon Mobile to be the first to move their corporate HQ ot Dubai where taxes are extremely low. The rest of the oil companies with their world wide HQ in the USA will soon follow.

murral stark
12-12-2012, 08:56 PM
Were it available you'd be 1st in line :razz:. Someone posted here that Mrs Romney was able to take a $59 deduction total. But you are so busy with your unknowledgeable class envy you probably missed that part :(.

Hey Marvin,
I only take the standard deduction each year. Don't make enough money to have to worry about all of those deductions that you "Rich OLD FARTS" can take. It's condescending azzholes like you that made me "hate" rich people and makes me want to "stick it to 'em" every chance I get. I know some people that have alot of "wealth", but they don't talk down to people or look down their noses at them. It's the people like you that walk around with your nose in the air so high that if it rained, you'd drown, that causes the hatred. Your great President Ronald Reagan talked about trickle down. When can we expect to see that? We got the down, just not the trickle.

Marvin S
12-12-2012, 09:17 PM
Should the Repubs cave to Obama's demands? No! Will they? Yes.

If the subsidies to oil companies go, look for Exxon Mobile to be the first to move their corporate HQ ot Dubai where taxes are extremely low. The rest of the oil companies with their world wide HQ in the USA will soon follow.

It remains to be seen -

As for the Oil Companies - they have made less profit than the various US governments have received in tax & fee income since their inception yet there are folks calling for higher taxes on what little they do make & reinvest. Would you blame them for moving? Probably the only thing that keeps them here is the stability of our form of government, as bad as it is ;-).

Franco
12-12-2012, 09:32 PM
It remains to be seen -

As for the Oil Companies - they have made less profit than the various US governments have received in tax & fee income since their inception yet there are folks calling for higher taxes on what little they do make & reinvest. Would you blame them for moving? Probably the only thing that keeps them here is the stability of our form of government, as bad as it is ;-).

Well Marv, we agree on something! The cost to the oil companies to produce a barrel of oil within the USA is the highest in the world. If push comes to shove, believe me they don't need the USA. Though, we will be buying their oil. And may your God help you if the government thinks they can produce oil as safely and productive as the major oil companies do. Dubai is offereing all kinds of incentives to get companies like Exxon Mobile to move there.

Marvin S
12-12-2012, 09:33 PM
It's condescending azzholes like you that made me "hate" rich people and makes me want to "stick it to 'em" every chance I get.

Murral, I do not look down my nose at you as I do not look down my nose at anyone :o. What I do do is feel sorry for you with a damn near empty tool box attempting to compete in any venue :confused:.

You know little of me yet as others have pointed out, you make a feeble attempt to characterize me & them. We grew up in the same environment, I would venture to say that my circumstances were much more trying than yours, yet somehow I managed to rise above that whereas you apparently did not. I would say you might want to think about that but I believe you incapable of rational thought.

BTW, I would explain Risk-Reward ratio to you but again, I did not say capital gains should be taxed as ordinary income - I said - Hedge Fund folks should not be able to treat short term gains as long term capital gains - it has to do with risk-reward, a subject you apparently are not converse in :).

Franco
12-12-2012, 09:42 PM
I am trying to sell as much of my investment property as I can before the end of the year. I placed it all on the market last October with an agent(except of the home I just had built) when I had a feeling Obama would win reelection. I don't mind paying the 15% on Capital Gains but I'll be damned if I am going to pay more. Same for the few stocks I bought last month. Market is up and all was sold today, same reason. And, I won't be reinvesting any of it!

Marvin S
12-12-2012, 09:49 PM
Well Marv, we agree on something! The cost to the oil companies to produce a barrel of oil within the USA is the highest in the world. If push comes to shove, believe me they don't need the USA. Though, we will be buying their oil. And may your God help you if the government thinks they can produce oil as safely and productive as the major oil companies do. Dubai is offereing all kinds of incentives to get companies like Exxon Mobile to move there.

We probably agree on a lot of things from the business world - where we don't agree is how & who would provide the climate to make that happen. I do have the background of responsible positions in 2 major companies in 2 different major industries with 2 different methods of management to draw upon & that's why I believe that my or a similar approach is best for the country :).

We have seen Boeing go to Chicago where they are a player with more competition for attention than they would have had in Seattle, yet they moved. We saw Boeing go to SC for a more favorable work environment. So moves are not out of the question, but I will say this, going to a foreign country should be well thought out before making the move. You are only a regime change away from things changing drastically. In my formal education we were taught that unstable governments require a higher rate of return in order to cover the cost of locating in that country. In the mining business you go where the ore is depostited, so you are restircrted in that manner. But it's only ore if it can be mined at a profit, so if the country makes it cost prohibitive, it's waste :). :( but true.

Marvin S
12-12-2012, 09:58 PM
I am trying to sell as much of my investment property as I can before the end of the year. I placed it all on the market last October with an agent(except of the home I just had built) when I had a feeling Obama would win reelection. I don't mind paying the 15% on Capital Gains but I'll be damned if I am going to pay more. Same for the few stocks I bought last month. Market is up and all was sold today, same reason. And, I won't be reinvesting any of it!

We have harvested some low hanging fruit but I still believe the market is the only place that will provide the inflation hedge to deal with what's going to happen so am still investing. There are bargains out there. I sat on a 12 bagger in GX because i did not want to contribute to Clinton's legacy. Guess what, Gary Winnick was a crook, the company folded, we lost a bundle & Winnick walks free because he contributed to the right politicians including George HW. That will not change my opinion that this is the greatest country in the world & the only way to make money is participate.

huntinman
12-12-2012, 09:59 PM
Murral, I do not look down my nose at you as I do not look down my nose at anyone :o. What I do do is feel sorry for you with a damn near empty tool box attempting to compete in any venue :confused:.

You know little of me yet as others have pointed out, you make a feeble attempt to characterize me & them. We grew up in the same environment, I would venture to say that my circumstances were much more trying than yours, yet somehow I managed to rise above that whereas you apparently did not. I would say you might want to think about that but I believe you incapable of rational thought.

BTW, I would explain Risk-Reward ratio to you but again, I did not say capital gains should be taxed as ordinary income - I said - Hedge Fund folks should not be able to treat short term gains as long term capital gains - it has to do with risk-reward, a subject you apparently are not converse in :).


Bingo................

murral stark
12-12-2012, 10:09 PM
Murral, I do not look down my nose at you as I do not look down my nose at anyone :o. What I do do is feel sorry for you with a damn near empty tool box attempting to compete in any venue :confused:.

You know little of me yet as others have pointed out, you make a feeble attempt to characterize me & them. We grew up in the same environment, I would venture to say that my circumstances were much more trying than yours, yet somehow I managed to rise above that whereas you apparently did not. I would say you might want to think about that but I believe you incapable of rational thought.

BTW, I would explain Risk-Reward ratio to you but again, I did not say capital gains should be taxed as ordinary income - I said - Hedge Fund folks should not be able to treat short term gains as long term capital gains - it has to do with risk-reward, a subject you apparently are not converse in :).

You and I did grow up with the same circumstances, and yes yours probably was more trying than mine. I got out of poverty, just never forgot where I came from. I am very capable of rational thought, what is rational to me may not be rational to you. I have competed in venues that you probably would not do well in. Different circumstances and different venues. You probably did very well in intellectual venues and possibly physical venues, where I did well in physical venues. somebody must've thought I had pretty rational thoughts, because they promoted me up the ladder. You don't get promoted by being stupid. I don't have the extra income or money to be able to play with those hedge funds. I really don't want to be rich because I have seen how money changes people. the worst hipocrites to me are the ones that have risen above their humble beginnings and for get where they came from.

murral stark
12-12-2012, 10:13 PM
Bingo................

And why don't you go back and get under the rock you've been hiding under since Rmoney got his arse kicked.

Franco
12-12-2012, 10:17 PM
We probably agree on a lot of things from the business world - where we don't agree is how & who would provide the climate to make that happen. I do have the background of responsible positions in 2 major companies in 2 different major industries with 2 different methods of management to draw upon & that's why I believe that my or a similar approach is best for the country :).

We have seen Boeing go to Chicago where they are a player with more competition for attention than they would have had in Seattle, yet they moved. We saw Boeing go to SC for a more favorable work environment. So moves are not out of the question, but I will say this, going to a foreign country should be well thought out before making the move. You are only a regime change away from things changing drastically. In my formal education we were taught that unstable governments require a higher rate of return in order to cover the cost of locating in that country. In the mining business you go where the ore is depostited, so you are restircrted in that manner. But it's only ore if it can be mined at a profit, so if the country makes it cost prohibitive, it's waste :). :( but true.

THe United Arab Emirates is one of the most stable areas of the world. Certainly more stable than most of Europe, Asia, Africa, S America.

I got into the stock market in October and now I am out. I'm not going to pay more than 15% on Capital Gains, period!

In 37 years working in radio, I have had the privledge of working with hundreds of small and medium sized businesses and ad agencies. There aren't many retail or services businesses that I am not familiar with or how they make their money. One key to being sucessful in my field is in becoming an expert in other peoples' businesses. I am an "idea man" and a problem solver. If one can't talk their language then one can't be truly successful. I've also spent much of my career working for the biggest and what use to be the best broadcast company in the USA until the Thunder, Wonder, Blunder syndrome affected the corporate bottom line.

Luckily, I live in an area that is thriving. Our area has always been the hub for offshore oil activity but our city leaders had the foresight to wire the city with Fiber Optics which has also made us a medical hub. Not talking service level income for the area but jobs that pay substanial incomes. And, I hear he concerns from the locals as well as the rest of the company in the 45 markets that we are in around the country.

WE are all paying way too much in taxes! Over half of my income goes to; Federal taxes, State taxes, sales tax, gasoline taxes, etc. Enough is enough! I tell folks all the time that we now work for the government and they look at me like duh. Government is now the privlidged class, we work for them and I'm getting out!

The best thing that could happen to this country economically is for the 53% that pay taxes is for all of us to get a huge reduction in the taxes we pay! That would be a major strimulus and not the phoney kind the government is always peddling!

charly_t
12-12-2012, 10:27 PM
Hey Marvin,
I only take the standard deduction each year. Don't make enough money to have to worry about all of those deductions that you "Rich OLD FARTS" can take. It's condescending azzholes like you that made me "hate" rich people and makes me want to "stick it to 'em" every chance I get. I know some people that have alot of "wealth", but they don't talk down to people or look down their noses at them. It's the people like you that walk around with your nose in the air so high that if it rained, you'd drown, that causes the hatred. Your great President Ronald Reagan talked about trickle down. When can we expect to see that? We got the down, just not the trickle.

.................................................. ........are you sure that you hate the people or is their actions that you hate ?

murral stark
12-12-2012, 11:14 PM
.................................................. ........are you sure that you hate the people or is their actions that you hate ?

The ones that I dealt with personally, I hate them with a passion. The other rich people I don't know, I hate their actions but don't know enough of them to hate them personally.

Dan Storts
12-13-2012, 06:39 PM
A number of things said are not based on rational thought as much as reactions in thoughts. Thus, they are thoughtless thoughts. A ratio of thoughts will in this thread will determine those thoughts which are thoughtless.

caryalsobrook
12-13-2012, 07:24 PM
The ones that I dealt with personally, I hate them with a passion. The other rich people I don't know, I hate their actions but don't know enough of them to hate them personally.

I have seen you constantly berate whaat you call the rich. Given the your successes, I guarantee you that there are people in this country that would consider you rich. I wonder how you would respond to someone who thought you were rich and expresed the same opinion of you as you do of those you consider rich.

Personally, such arrogance, snobbary, and downright biggotry surpasses any that I have ever encountered.

luvmylabs23139
12-13-2012, 07:38 PM
The ones that I dealt with personally, I hate them with a passion. The other rich people I don't know, I hate their actions but don't know enough of them to hate them personally.
BUt see lets look at the other side. The section 8 people I was forced to live near make me despise all section 8! Why did I bust my ass to buy a condo only to have the govt move that slime in across from me and below me with my hard earned money??
Why did I try to improve my life only to have the gooberment take my hard earned money and use it to give the leaching slime what I worked hard for and have them destroy it???
GET RID OOF SECTION 8!! CAGE THE DAMN ANIMALS!!!!

murral stark
12-13-2012, 08:02 PM
I have seen you constantly berate whaat you call the rich. Given the your successes, I guarantee you that there are people in this country that would consider you rich. I wonder how you would respond to someone who thought you were rich and expresed the same opinion of you as you do of those you consider rich.

Personally, such arrogance, snobbary, and downright biggotry surpasses any that I have ever encountered.

I make a modest income. The difference is that I still just wear blue jeans,boots, baseball cap. I talk to people the way I want to be talked to, until they give me reason to talk to them differently. People that don't know me and looked at me would never get the impression that I am "rich". Why you might ask, because I don't act snooty I just blend in.

murral stark
12-13-2012, 08:04 PM
The same could be said for the United States depending upon who holds the Office of the President, how Congress aligns with his or her views, who sits on the Supreme Court, etc.



Explain Congress, then.... ;)

Actually, some people do. Boss's son, the guy who has been there the longest, the politician with a good smile and great hair, etc.

Good point.

luvmylabs23139
12-13-2012, 08:10 PM
I make a modest income. The difference is that I still just wear baseball cap..

Please don't tell me you wear it backwards like punk!

murral stark
12-13-2012, 08:19 PM
Please don't tell me you wear it backwards like punk!

No way in heck would I disgrace my cap like that. I saw a bumper sticker once that said, "Pull your pants up, turn your hat around and get a job." I laughed uncontrollably at that one.

HPL
12-13-2012, 08:23 PM
I make a modest income. The difference is that I still just wear blue jeans,boots, baseball cap. I talk to people the way I want to be talked to, until they give me reason to talk to them differently. People that don't know me and looked at me would never get the impression that I am "rich". Why you might ask, because I don't act snooty I just blend in.


What do you drive?

luvmylabs23139
12-13-2012, 08:25 PM
Careful, I wear my baseball cap backwards.

When I'm in my boat heading to my hunting spot so it doesn't blow off my head.
OK OK I'm showing my age~~.... Heck DH got in the dog house way back when for wearing one at Dad's dinner table even though we had been at Great Adventure all day.

murral stark
12-13-2012, 08:26 PM
BUt see lets look at the other side. The section 8 people I was forced to live near make me despise all section 8! Why did I bust my ass to buy a condo only to have the govt move that slime in across from me and below me with my hard earned money??
Why did I try to improve my life only to have the gooberment take my hard earned money and use it to give the leaching slime what I worked hard for and have them destroy it???
GET RID OOF SECTION 8!! CAGE THE DAMN ANIMALS!!!!

Section 8 housing is not owned by the govt. It is owned by private landlords that get subsidies from the govt for low income people. You should hate your neighbors for owning property and accepting Section 8 money, not the people living in the housing.

murral stark
12-13-2012, 08:27 PM
What do you drive?

I drive a 1994 f-150.

HPL
12-13-2012, 08:29 PM
Wow, two years older than mine, but 12 yrs newer than my bronco. What's your wife drive?

murral stark
12-13-2012, 08:29 PM
Wow, two years older than mine, but 12 yrs newer than my bronco. What's your wife drive?

96 crown victoria

luvmylabs23139
12-13-2012, 08:44 PM
Section 8 housing is not owned by the govt. It is owned by private landlords that get subsidies from the govt for low income people. You should hate your neighbors for owning property and accepting Section 8 money, not the people living in the housing.

NO I hate the government because they decided that moving the slime of society into the general population was better than keeping them confined to their cages. They stopped keeping the animals confined and unleashed them on hard working taxpayers, My neighbors??? Well the condo market went to crap and investors from the mid east bought the units around me. AGAIN let me stress had the gov't kept the animals contained rather than sending them into taxpayer zones, via section 8 (SCREW THE TAXPAYER) my condo would have been salable, but not once the govt screwed me with my tax money.
I don;t care what you think of this but there is no way in hell that I should work my but off to own a home and then my taxes (STOLEN MONEY) are used to have drug dealing welfare slime move in across and below me. When they can't even follow basic parking rules and block my car in because they are to dmn stoned and now I can;t go to work to pay for them well screw them and screw them some more.


I could go on and on. I tried everything. Called police, social services (kids) etc. ONe of whore finally got arrested 6 years after I left but I called all the time and sent poilce pics of the liscence plates of the deliverers. the couldn;t or wouldn;t do anything,

luvmylabs23139
12-13-2012, 08:51 PM
Wow, two years older than mine, but 12 yrs newer than my bronco. What's your wife drive?

MY labmobile was 92 Explorer until 10028
Still searching for a replacement.
LOst those really sturdy miwest side by sides too.

murral stark
12-13-2012, 08:52 PM
NO I hate the government because they decided that moving the slime of society into the general population was better than keeping them confined to their cages. They stopped keeping the animals confined and unleashed them on hard working taxpayers, My neighbors??? Well the condo market went to crap and investors from the mid east bought the units around me. AGAIN let me stress had the gov't kept the animals contained rather than sending them into taxpayer zones, via section 8 (SCREW THE TAXPAYER) my condo would have been salable, but not once the govt screwed me with my tax money.
I don;t care what you think of this but there is no way in hell that I should work my but off to own a home and then my taxes (STOLEN MONEY) are used to have drug dealing welfare slime move in across and below me. When they can't even follow basic parking rules and block my car in because they are to dmn stoned and now I can;t go to work to pay for them well screw them and screw them some more.


I could go on and on. I tried everything. Called police, social services (kids) etc. ONe of whore finally got arrested 6 years after I left but I called all the time and sent poilce pics of the liscence plates of the deliverers. the couldn;t or wouldn;t do anything,

so where are these cages you speak of keeping the animals in? that sounds like slavery to me.

luvmylabs23139
12-13-2012, 09:11 PM
so where are these cages you speak of keeping the animals in? that sounds like slavery to me.

NO not at all. Everyone has a choice. If you want to steal from the taxpayers then the cages are the provided housing. NObody has to take that option. They can fend for themselves!!!!

caryalsobrook
12-14-2012, 07:30 AM
I make a modest income. The difference is that I still just wear blue jeans,boots, baseball cap. I talk to people the way I want to be talked to, until they give me reason to talk to them differently. People that don't know me and looked at me would never get the impression that I am "rich". Why you might ask, because I don't act snooty I just blend in.

I have never thought of my in income as modest of lucrative. Some may consider it modest and others as lucrative. I am sitting here wearing a $12 pair of jeans frayed at the pocket and a fairly new $9 walmart shirt. The boots came from Bass pro and did cost $120. My feet are very narrow and I do have trouble finding anything narrow enough. These are satisfactory for cleaning kennels, washing dog bowls, feeding pups and doing "T" with a young dog. Oh yes, I do have to make a bank deposit also. I usually get my hair cut at the barber college for $4 and a tip of $1(got to find a barber here or some will call me a hippie;))
I try to talk to everybody the way I would like to be talked to, but I must admit that at times I let other people influence what I say. That is a failure of mine. I have never tried to blend in. My parents taught me that whether with one of extreme wealth or of meager possessions, to treat them as a respected person.

HPL
12-14-2012, 07:38 AM
Wow, a crown vic! You ARE rich! ;-) Well, at least the four of us are driving American made, my wife is in a '96 windstar. I like my F150 and love the old bronco, but pretty well hate the windstar (engine in sideways, no frame, real pain to do even routine maintenance).

murral stark
12-14-2012, 04:39 PM
Wow, a crown vic! You ARE rich! ;-) Well, at least the four of us are driving American made, my wife is in a '96 windstar. I like my F150 and love the old bronco, but pretty well hate the windstar (engine in sideways, no frame, real pain to do even routine maintenance).

I guess if we would've bought the crown vic in 96, we would be rich. Since we bought it used in '04, not so much.

Golddogs
12-20-2012, 01:12 PM
Obviously no one wanted to answer the questions asked in the OP of Part 1 so will try a new tack. This is for those who are obviously smitten with class envy :(.




Which means that the middle 40% paid 27.04% of all the federal income taxes, which I would venture to guess would include most who post here.

If my AGI was only $369,691 & I was being demonized by the POTUS as rich I would be quite upset.

There is not enough money among the wealthy to cure congresses spending habit & pay off the debt. Those among the very wealthy that say they should pay more can without asking others to, their support means they expect to get a break unavailable to the other wealthy :(. What sucks is that many of you are falling for that line.

So I'll try to present it in a manner you understand. The attack on the wealthy is an attempt to gain the viriginity of the taxpayer, nothing less. After the deflowering everything will be much easier. & you can see from the stats that you will be on the list.

Should the R's cave I will be very disappointed, fortunately Boehner has as his two sidekicks in the negotiations, Ryan & Kantor. Hopefully they will be successful in cutting tax breaks of which the ability of the hedge funders to take ordinary income & have it taxed at CG rates would be one + the second home deduction of interest should be eliminated. There are others, including in the farm bill. Because of capital demands there will be 70,000 less farmers at the end of this decade, should we continue to subsidize those very wealthy farmers?


Interesting commentary.

Real World Economics

Current fiscal crisis isn’t real deal

Decades from now, when historians look back at the “fiscal cliff” crisis of 2012, they are likely to find it the greatest ado about nothing since the turmoil in Andrew Jackson’s administration because Mrs. John C. Calhoun snubbed the wife of his war secretary. Remember that?

The underlying issues are important, to be sure. But the substantive differences between the two sides are not all that great, even while the level of rhetoric and political posturing is extreme.

Once again, the good sense of 80 percent of the citizenry clustered around the political center is being overwhelmed by elected officials cowed by the 10 percent on their respective wings.

Start with the basic issue of marginal personal income tax rates. Moving the top rate from 35 percent to 39.6 percent is not likely to have discernible effects on growth or employment. The rate has been that high or higher for 64 of the past 80 years. It was 90 percent from 1951 through 1963 and remained at 70 percent or more for the rest of the 1960s. This was the period of greatest growth of median incomes and productivity in this eight-decade span.

They remained above 50 percent for most of the Reagan era before dropping to 28 percent in 1988. Predictably, annual deficits grew sharply until presidents George H.W. Bush and Bill Clinton had the guts to ask for legislation to recoup about half of the cuts. Despite wild rhetoric about how this was going to sink the economy, the rest of the 1990s saw good growth.

While we still had a “structural deficit” (i.e. one over the long run if the economy were not booming), we did manage four years of slight budget surpluses, the first since LBJ’s belated tax boost had last balanced the budget in fiscal year 1969.

We threw that away with the 2001 and 2003 tax cuts, which needed a statutory end date of 2010 to hide the fact that they would make the deficit explode over the longer run. These were supposed to spur economic activity. Instead, we had the slowest economic growth of any decade since the Great Depression, even if taken only through the good times that ended in 2007.

Now you might say that there were many other factors that drove 1990s growth, including a one-time technology boom and the Alan Greenspan-led Federal Reserve beginning to goose the monetary throttle as the decade ended. Oil prices also were low relative to longer-run trends.

Similarly, after 2001, the economy had severe exogenous shocks from the 9/11 attacks and the subsequent slump in air travel. We had high oil prices from ongoing turmoil in the Persian Gulf. And we have had five years of financial-sector crises. Admittedly, higher tax rates did not cause the good growth of the 1990s and lower ones were not responsible for the bust in this century. Other factors were more important.

But that is precisely the point. No economist would argue that tax rates and the structure of taxes have no effect on economic growth. But it similarly is hard to find a reputable one who argues that any of the sundry income tax rate changes since 1981 made much difference on overall growth. Other factors were more important, for good and for ill, for the past

three decades and will be for the next three.

For an excellent exposition of this and other tax issues, see “Taxes in America: What Everyone Needs to Know,” by Leonard Burman and Joel Slemrod. Slemrod, regarded by many as the nation’s premier tax economist, served as a staff member on Reagan’s Council of Economic Advisors and is now at the University of Michigan.

Burman worked on taxes at the Treasury in the 1980s, and was the tax expert at the Congressional Budget Office in the 1990s before serving as the deputy assistant secretary of the treasury for tax analysis for two years. Bruce Bartlett’s new “The Benefit and the Burden: Tax Reform, why we need it and what it will take,” also is excellent.

If the president now demanded the top rate be pushed back up to 91 percent, or even the 50 percent that prevailed for most of the Reagan years, arguing about effects on growth would have more relevance. But he has not. And the business and household confidence needed for long- term economic growth depends much more on solving our budget quandary than on the exact level of the top rate.

Equally silly is the president’s insistence that any increase be limited to couples earning more than $250,000 per year. Worse, during the campaign he was wont to assert that the “middle class” really needed tax cuts. This was irresponsible demagogy.

Yes, since tax rates were last changed, nearly all the growth in real income has gone to the high- income group. But the average fraction of income paid as federal individual income taxes at all household income levels is lower now than at nearly any time since 1970.

For a median-income household of four, the fraction is half as large as it was in 1981. Yes, many people feel stretched right now. Yes, many people have seen stagnant incomes. But the fact remains that the burden of the federal individual income tax is lower than in the past.

All this would be less inane if the overall federal tax burden were high. But the fact is that as a percentage of gross domestic product, total federal tax revenues are at their lowest levels in 60 years. And as long as they stay this low we are never going to put our fiscal house in order.

Equally unfortunate is much of the rhetoric about relatively modest changes in Social Security and Medicare.

Yes, moving from the consumer price index currently used to a chained index means that Social Security recipients gradually will see smaller payments over time compared with the current system. Yes, further raising the “normal retirement age” for Social Security or the eligibility age for Medicare will hit poorer people harder than rich people, since the poor are less likely to have good jobs into their late 60s.

Yes, the Medicare age increase would not save much money and savings to the program would be more than outweighed by cost increases elsewhere. And yes, there are better alternatives to achieve the same goals.

However, the fact remains that as now structured, these programs are not sustainable. If the measures advanced so far are unacceptable, then someone has to put these better alternatives on the table. The political reasons both sides are reluctant to do so are obvious, but the common good requires that someone break the deadlock.

Furthermore, remember that any effort to shield those older than 60 from all pain means imposing even more eventual pain on those younger than 40. The baby boomers already are giving their own children and grandchildren one of the rawest deals in U.S. history, and I don’t understand why so many of us are willing to support measures that will make it even rawer.

St. Paul economist and writer Edward Lotterman can be reached at elotterman@pioneerpress.com.

Marvin S
12-20-2012, 05:14 PM
However, the fact remains that as now structured, these programs are not sustainable. If the measures advanced so far are unacceptable, then someone has to put these better alternatives on the table. The political reasons both sides are reluctant to do so are obvious, but the common good requires that someone break the deadlock.

St. Paul economist and writer Edward Lotterman can be reached at elotterman@pioneerpress.com.

The part bolded is what I look at - everything the government is running is a Ponzi Scheme - Ryan at the least put a proposal on the table -

I'm reading a book now called "Do Not Ask What We Do" about selected tax cutters & their foes. Boring to start with but turns into an interesting read.

What it really boils down to is - No one wants to be the 1st to propose something as they will pay the price - & everyone wants to be reelected ;-).

At the same time I am reading a CATO book about the problems in SS circa 1983 data. Those who are opposed to private accounts in SS should read it.

There are lots of good sensible proposals out there, no one wants to be the front man.

Buzz
12-20-2012, 07:24 PM
Republicans didn't have the votes for "Plan B."


What a joke of a party.

luvmylabs23139
12-20-2012, 07:29 PM
Republicans didn't have the votes for "Plan B."


What a joke of a party.
Why does that make it a joke of a party? I look at it as the people that were elected to the house are standing by what the people who elected them want. I know if my rep voted for any tax increase I would vote against her in a primary. I voted for her to cut spending not raise taxes.

luvmylabs23139
12-20-2012, 07:30 PM
Let me add I also wish she would grow a set and eliminate refundable tax credits.

huntinman
12-20-2012, 07:32 PM
Republicans didn't have the votes for "Plan B."


What a joke of a party.

They did what they were elected to do. Told Boehner to "Buzz" off.

Dan Storts
12-20-2012, 07:43 PM
They did what they were elected to do. Told Boehner to "Buzz" off.

The real ones that told Boehner to stick it have one more chance to get rid of him in the final vote for speaker with a tie vote. Then the republicans would have to put up a new nominee in his place and the democrats would have to put someone new in for Pelosi. Then they would have another vote.

Buzz
12-20-2012, 07:55 PM
Why does that make it a joke of a party? I look at it as the people that were elected to the house are standing by what the people who elected them want. I know if my rep voted for any tax increase I would vote against her in a primary. I voted for her to cut spending not raise taxes.

Good luck with that. Ah ha ha ha ha!

luvmylabs23139
12-20-2012, 08:06 PM
Good luck with that. Ah ha ha ha ha!

Why would people who voted for her want to re elect her if she votes to raise taxes? This state just went completely republican on the state level for the first time in over 100 years.( house, senate and governor).
She will not last if she raises taxes.

Buzz
12-20-2012, 08:24 PM
Why would people who voted for her want to re elect her if she votes to raise taxes? This state just went completely republican on the state level for the first time in over 100 years.( house, senate and governor).
She will not last if she raises taxes.

So taxes go up on everybody! Ah ha ha ha ha!

huntinman
12-20-2012, 08:27 PM
So taxes go up on everybody! Ah ha ha ha ha!

Tell your man in the WH to start NEGOTIATING instead of trying to DICTATE.

luvmylabs23139
12-20-2012, 08:31 PM
So taxes go up on everybody! Ah ha ha ha ha!

Blame the fool in the White house!!!

Golddogs
12-21-2012, 10:06 AM
The part bolded is what I look at - everything the government is running is a Ponzi Scheme - Ryan at the least put a proposal on the table -

I'm reading a book now called "Do Not Ask What We Do" about selected tax cutters & their foes. Boring to start with but turns into an interesting read.

What it really boils down to is - No one wants to be the 1st to propose something as they will pay the price - & everyone wants to be reelected ;-).

At the same time I am reading a CATO book about the problems in SS circa 1983 data. Those who are opposed to private accounts in SS should read it.

There are lots of good sensible proposals out there, no one wants to be the front man.

Another good OP ED piece:
Sen. Warren Rudman

Lessons from a champion of responsible budgeting

By Sara Imhof and Tim Penny

“Let me be blunt,” Sen. Warren Rudman said 20 years ago in one of his many appeals for more responsible budget policies in Washington. And as promised, he did not mince words.

The two main political parties, according to the outspoken New Hampshire Republican, were afraid to “speak the truth” to the American people about the enormous fiscal and economic challenges facing the country.

The public, he complained, had been led to believe that these challenges could be easily met with a few simple steps such as slashing congressional perks and eliminating foreign aid.

Rudman said it was time for Congress to shift its focus away from special interests and concentrate on promoting “economic growth and a future for the kids of this country.”

Last month, with Rudman’s passing at age 82, the nation lost a true champion of responsible federal budget policies. Had our national leaders heeded his warnings, perhaps our fiscal future would not look so bleak now.

Yet here we are today, having recently recorded another annual deficit in excess of $1 trillion, comprising nearly 40 percent of the federal budget. The national debt has climbed well above $16 trillion, roughly the size of the country’s Gross Domestic Product.

As we approach the so-called fiscal cliff and another fight over the debt ceiling, and consider how to fund the baby boomers’ retirement years, courageous political leadership on the budget has never been more needed.

But all too often that leadership, from the White House to Capitol Hill, has been lacking.

The year-end fiscal cliff — a combination of expiring tax cuts and poorly designed spending cuts — threatens to put the country back into a recession. Washington needs to quickly find a better alternative to the cliff, while laying the groundwork for more comprehensive, longterm fiscal reforms.

Facing this task, our elected officials would do well to keep Warren Rudman’s example in mind.

His commitment to the cause of fiscal responsibility stretched back to his days in the Senate, where in the 1980s he sounded the alarm about our long-term challenges and sponsored the Gramm-Rudman deficit- reduction legislation.

In 1992, Rudman joined former Sen. Paul Tsongas, a Massachusetts Democrat, and Peter G. Peterson, a former U.S. secretary of commerce, in founding The Concord Coalition. His comments above were made at that time.

The goal was to establish a nonpartisan watchdog organization that would both alert the public to the dangers of large deficits and hold elected officials accountable for votes that added to the red ink. Rudman served as a Concord co-chair until his death.

Rudman understood that the antitax impulse of his own party — and the big-government impulse of the Democratic Party — often meant that neither party could be trusted to watch the bottom line.

He sought to pull and cajole his colleagues away from the fiscal extremes and toward the responsible middle — always with an eye on protecting the country’s standard of living and shielding future generations from inheriting excessive government debt. Some elected officials have followed in his footsteps. Earlier this year, for example, 38 House members voted for legislation based on the bipartisan recommendations of the widely respected Bowles-Simpson commission.

However, that was only 38 out of 435 House members. Likewise, in the Senate, a bipartisan “Gang of Eight” has been working on sound fiscal policy alternatives. But again, more lawmakers are needed.

Now the nation watches as the finger- pointing in Washington continues over the fiscal cliff and longerterm reforms. With time running short, offers have been made and rejected and both parties frequently retreat to their partisan corners.

After the November elections, neither party has the power or credibility to simply push through its own agenda. Bipartisan compromise is the only option — and the only way to reflect the wishes of a closely divided electorate.

We need Warren Rudman’s brand of leadership again. Can Obama and Congress provide it — before it’s too late?

Sara Imhof is Midwest regional director of the Concord Coalition. Tim Penny, a former U. S. congressman, is president and CEO of the Southern Minnesota Initiative Foundation.

He sought to pull and cajole his colleagues away from the fiscal extremes and toward the responsible middle — always with an eye on protecting the country’s standard of living and shielding future generations from inheriting excessive government debt.

cotts135
12-21-2012, 01:20 PM
Obviously no one wanted to answer the questions asked in the OP of Part 1 so will try a new tack. This is for those who are obviously smitten with class envy :(.






Which means that the middle 40% paid 27.04% of all the federal income taxes, which I would venture to guess would include most who post here.

If my AGI was only $369,691 & I was being demonized by the POTUS as rich I would be quite upset.

There is not enough money among the wealthy to cure congresses spending habit & pay off the debt. Those among the very wealthy that say they should pay more can without asking others to, their support means they expect to get a break unavailable to the other wealthy :(. What sucks is that many of you are falling for that line.

So I'll try to present it in a manner you understand. The attack on the wealthy is an attempt to gain the viriginity of the taxpayer, nothing less. After the deflowering everything will be much easier. & you can see from the stats that you will be on the list.

Should the R's cave I will be very disappointed, fortunately Boehner has as his two sidekicks in the negotiations, Ryan & Kantor. Hopefully they will be successful in cutting tax breaks of which the ability of the hedge funders to take ordinary income & have it taxed at CG rates would be one + the second home deduction of interest should be eliminated. There are others, including in the farm bill. Because of capital demands there will be 70,000 less farmers at the end of this decade, should we continue to subsidize those very wealthy farmers?

This site shows a more comprehensive and complete picture of Income and Taxes. Lots of charts and easy to understand graphs.
http://www.businessinsider.com/who-pays-taxes-2012-8?op=1

Marvin S
12-21-2012, 05:38 PM
This site shows a more comprehensive and complete picture of Income and Taxes. Lots of charts and easy to understand graphs.
http://www.businessinsider.com/who-pays-taxes-2012-8?op=1

Informative - Yes but which of those multitude of charts do you consider significant, by name :). It would have been more interesting to get the number of households falling into each of those categories.

You do know who Henry Blodgett is, don't you??????????????

road kill
12-22-2012, 07:11 AM
Obama is clearly seriously concerned!!!

http://www.staradvertiser.com/news/breaking/184496891.html?id=184496891

Unbelievable!