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The fiscal cliff...

It's startling to consider that we've reached a point when half of Congress is unwilling to raise taxes on the upper brackets while the country is in the midst of a historical low in tax rates coupled with high inflation (the plummeting value of the dollar), monopolization of the market, stagnant wages (which are actually falling due to inflation), a historically high debt of 16 trillion dollars and a deficit in the ballpark of 1 trillion per annum. We're hemorrhaging money (which would be less of a problem if we weren't borrowing most of it from the banks).

Meanwhile, the rest of the world is biding its time, waiting to see who's in charge here - the people's democracy or a handful of wealthy men - and The President has to fight tooth and nail for the equivalent of a hand job from The Republicans (a measly 4 percentage points of a tax increase, which would raise taxes to only 39 percent for the ten percent of the population that has managed to acquire 90 percent of the money in this country) despite the fact that taxes on the rich were 70 percent or higher from the mid 30's until the late 70's. How the Hell is a 4 percent increase in taxes supposed to pay for 16 trillion dollars in debt and a loss of 1 trillion dollars per year?

It's not.

So, instead, our "elected representatives" are going to draft some sort of "grand bargain" that will include concessions to The Republicans, who want immediate cuts to programs like Medicare, Medicaid, unemployment, Section 8 and the food stamp program. How the Hell are shanty towns full of sick and hungry people and a decaying infrastructure supposed to help the economy? The only thing we could possibly roll back is Medicaid, and that's only after The Affordable Care Act goes into effect for the majority of Americans. Regardless, there will still be millions of unemployed who have no access to healthcare without Medicaid, so we can't allow it to fold entirely and - certainly - not immediately.

Also, don't be surprised if Democrats and Republicans forget to extend the payroll tax credit and AMT patch. That would put an extra burden on the middle class and if they did that, I wouldn't be surprised to see the working poor rioting in the streets. If they did that, I may have to acquire a Floyd Card and buy myself a Smith & Wesson.

If our representatives are trying to avoid a downgrade of The U.S. credit rating, they're doing an unimaginably shitty job. In the best case scenario, they'll be able to cut the poor out of the equation, pick em up in the paddy wagon and put them in the gainful employ of our growing penal system. (What's sad is that a lot of people - people who suffer from a sort of moral cancer - would applaud such an outcome.) In the worst case scenario, there will be a downgrade of the U.S. credit rating and another market crash.

What we should be debating is whether taxes on the rich should rise to sixty or seventy percent.

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Comment Preferences

  •  Long Story, But I Know A Lot Of Rich People (4+ / 0-)

    top 2% and even like the top .5%. Funny thing of the dozens or so of them I know most are liberals. And they think about (we've talked about it a lot) a 4% increase in their taxes and they  say, "bring it, wel'll pay that."

    I can't stress this enough, they have all said in one way or another they wouldn't even notice it. They will still be able to pay their phone bill. Pay the mortgage on their beach house.

    I mean it is almost like a rounding error for them. I am just stunned I don't hear this said more often on the various political/news programs I watch.

    When opportunity calls pick up the phone and give it directions to your house.

    by webranding on Thu Nov 29, 2012 at 03:40:13 PM PST

  •  We should also be debating (0+ / 0-)

    financial transaction taxes, taxing capital gains at ordinary income rates, closing overseas tax loopholes, and an alternative minimum tax for large corporations. And while we are at it a fee and dividend carbon tax, a waste tax for disposable or poorly made products, total elimination of all fossil fuel subsidies, and get rid of the tax deduction for advertising in excess of $1 million per year per company.

    Trickle Down Economics 101: They get the golden parachute, we get the golden shower.

    by NoMoreLies on Thu Nov 29, 2012 at 04:54:17 PM PST

  •  I don't get it.. (0+ / 0-)

    First let me say that I am in utter agreement that our tax code needs some major revisions. I personally am a huge supportor of the FairTax. That said, it seems to me that most Democrats are missing a major part of the Republicans arguement. Sure they are trying to protect the upper class that financed their campaigns and that is corrupt politics at its best but they are correct about the spending cuts. There truly isn't enough money to cover the current and projected exepences of our government.

    The Republicans, who want immediate cuts to programs like Medicare, Medicaid, unemployment, Section 8 and the food stamp program.
    I don't have a problem with the idea behind any of these programs, but can you honestly say that every dollar they spend is needed? Do you really believe that somehow even though the rest of our government reaks of corruption, these few programs have somehow escaped it? I had a roomate once who had three kids by three different dads who had so much excess food-stamp money she tried to get me to let her pay me her part of the rent in food. We need that?

    Un-employment is a needed thing for some people, I understand that. But three years? Really? After three years you can't move and find a job or two? Come to Oklahoma, there's plenty here.

    Section 8 housing, thats great, no one should ever go homeless in one of the weathliest countries in the world. But when you drive through Section 8 housing here in my part of the world you see people driving brand new cars, buying brand new TV's, talking on brand new cell phones, wearing brand new clothes. And I don't mean the "Obama Phones" Republicans are always bitching about, I mean brand new iPhone 5 and Galaxy III S phones. The phones that cost about $60 bucks a month to operate. I can go on and on with each of these programs and point out places where there is people working the system and ultimately stealing from the people who actually need that money.

    (a measly 4 percentage points of a tax increase, which would raise taxes to only 39 percent for the ten percent of the population that has managed to acquire 90 percent of the money in this country) despite the fact that taxes on the rich were around 70 percent throughout most of the 40s and all of the 50s, 60s and 70s. How the Hell is a 4 percent increase in taxes supposed to pay for 16 trillion dollars in debt and a loss of 1 trillion dollars per year?
    Once again I want to reiterate that I believe we should completely eliminate our tax code and go to the FairTax. So ignoring the fact that our "income tax" system is rediculously inefficient and counterproductive to producing prosperity for everyone in America, lets play out a scenario. Lets look at a man, 60 years old, who's devoted himself to his career. He runs a small business that employs 15 or 20 people and currently plans to keep working well into his 70s or even 80s. He decided to remain single and to not have kids. He never went to college, just learned a skill from someone and figured out how to capitalize on it. He's worked 50+ hours a week since his 20s and and its paid off. He's worked his way up to an annual taxable income of $300,000 a year. Not too shabby and not as rare as some would like to think. I chose this amount because it is clearly over the "$250,000" threshold you hear everyone arguing.

    For those that don't know, the way our tax system works is that every time you jump into a new bracket, you only pay that new rate on the income that falls in that bracket (2011 IRS Tax Tables See page 14. This does not take into account the standard deduction). So the first $8,500 of income gets taxed at 10% totalling $850, the next $26,000 is taxed at 15% totalling $3,900. This continues up the brackets until you get to $174,400. On that first $174,400 of taxable income, he owes $42,449. Then the rest of income gets taxed at 33%. Thats [($300,000 - $174,400) x .33] or $41,448. So for that last $125,600 of income, he had to pay almost as much taxes as he did on the first $174,400. His overall tax burden is $83,897. I go through all of this to ask you, is it really fair for him to pay twice as much taxes even though he doesn't make twice as much money? Further, is it fair to then increase his tax burden further all because he was willing to sacrifice and work hard to get where he was. If you do believe that is fair, then what is his incentive to continue working to make that much money? Why wouldn't he just retire? Hes at an age that he could do that, at which point not only does the government lose most of the $80k they were already getting from him, they lose all the taxes of all the people he was employing until those people find new jobs. And with un-employment paying out for three years, you may have just created 15 or 20 new government dependants who decide its way easier to live on un-employment than it is to work. This all because you wanted to get an extra $5000 bucks out of some guy who's worked all his life for what he has.

    My point is that there is always one last straw that breaks the camels back and you can't tell me that our country won't survive if we tighten the belt and make some cuts. Cuts in the Democrats precious social programs like you mentioned. Cuts in the Republicans precious defense and other equally fiscally irresponsible programs. If you want to use the government to tailor our people, use it to tailor them into people like the man I described. People that are willing to work hard all there life and content with what they have.

    I'm sure many of you will read this and respond in a blind fury. Many of you will see the "OK" in my name and be like "Oklahoma, that state is full of racist bigots and they are nothing but a bunch of social conservative wackos who disagree with Democrats just because they are Democrats" and you know, you would actually be describing people I know, but be far from accurately describing all Oklahomans. What I know from living my short 25 year life here is that most Oklahomans are hard working, friendly people who'd give you the shirt off their back if you needed it. Where they start to get frustrated is when people abuse that generosity and take that shirt just so they don't have to go out and work and earn their own. They get jaded when they see people abusing the system. Wouldn't anyone? That's simply not what the programs were meant for and you can't tell me nothing can be done to fix that.

    •  Remember, Folks, Libertarians are Anarchists (0+ / 0-)

      First, for those of you who are unaware, The "Fair Tax" is a ham-handed approach to tax reform dreamed up by neanderthals that goes something like this: replace all taxes with a 30 percent sales tax, which - stop, think about it for a second - would penalize commerce, incentivize credit use and reward monopolists while lowering government revenue, thereby increasing the debt and deficit. Anyone with a modicum of street smarts, common sense or critical thinking skills can point out the idiocy of that proposal.

      Second, there is no evidence that lowering taxes and deregulation improves the economy. Actually, lower taxes lead to greater income inequality. The failure of Congress to regulate the shadow-banking industry and its eventual decision to repeal The Glass-Steagall Act created the unregulated environment that made today's ongoing depression possible. In addition, the idea that companies will suffer if the wealthy - who have siphoned the country's wealth into offshore bank accounts and hedge funds - are taxed is ridiculous. Half of those assholes (e.g. Mitt Romney) have made their living by exploiting traditional business models. Those who profit from traditional business models (e.g. former Costco CEO, Jim Sinegal) won't cutback on employees or wages for their own personal gain since doing so would hurt both their business and their income.

      Third, less than ten percent of the country makes 300,000 dollars a year while almost half the population possess less than one percent of the wealth. As far as I'm concerned, those who reap the benefits of a loose tax code or profit from the illegitimate methods of income creation found in the finance sector, those who have benefited from the engineering of our marketplace should sacrifice a piece of their prosperity for the common good. That's what democracy is: a government of the people, for the people that serves the interests of the common good. The influence a handful of wealthy men wield over policy, over wealth creation and law is not in the interest of "the common good." Anyone serious about preserving what remains of our democracy will advocate for raising taxes on the wealthy, for campaign finance reform and market regulation. The Libertarian platform wantonly calls for the continual reduction of government - they are advocating for the quick disassembly of your democracy - yet they dare place their hands on their hearts and sing the national anthem?

      Let's not kid ourselves, people. There is no "big government" and the premise that it's somehow - magically - the source of all our problems is a convenient distraction from reality. There is no such thing as "less government." There's just government . . . and you're in the unique position to participate in it, either by voting or contributing to your community. Now, some people will argue that, "my job is a valid contribution to this community," and they're right . . . But that doesn't validate the claim that corporate power is a legitimate and trustworthy steward of the common good. If you think it's reasonable to entrust a handful of men at the top of the corporate pyramid with the common good, you suffer from a terrible delusion. The fallacy that "government is the problem" has become an object of belief that obscures the fact that government is a constant but mutable force in human history.

      Fourth, as far "straws that break camels' backs" go, wait and see what happens when austerity hits. More of the middle class will slip into poverty, local economies will continue to flounder, to drown and eventually the masses will raise their voices, then raise Hell. Even the docile sheep that are The American People have a breaking point.

      Everyone would like these programs to run efficiently. Cost-sharing and regulation could reduce prices and save a lot of taxpayers money, but we can't afford to underestimate the importance of these programs, which is exactly what your anecdotal evidence and specious claims attempt to do. Allow me to clear up some of your misunderstandings and the confusion you've helped to create.

      Let's start with your description of unemployment: it's incorrect. Follow this link and educate yourself.

      Second, the average monthly food stamp amount per participant in the country is $133.84/month, which equals about $4.31/day.

      Third, your description of the poor is enough evidence to support the argument that you've experienced limited exposure to the poor . . . and it does make you sound like a bigot.

      I think you suffer from a kind of moral cancer, OKLibertarian. I suggest you reevaluate the facts, reflect, meditate and just do whatever the Hell you have to do to cut it out, because it's really fucking sad.

      •  Well I truly am glad your replied.. (0+ / 0-)

        Unfortunately, I can’t say there’s a whole lot in your reply that I agree with. I wrote a five page response to your response which I admit is rather sad. I guess I really am hopeful that you might come around. Since I doubt you'll read the whole thing, I'll start by saying this, then if you decide you can't afford to "waste" your time reading the rest of my response, at least you have this to ponder.

        Take this example. A man in debt up to his eyeballs making minimum wage buys a pair of shoes that cost $100.

        I see a person perpetuating his poverty. As sad as that is, it is entirely the fault of the man buying the shoes. What do you see? Judging by your response to my previous post, I imagine that you see a company exploiting the poor.

        I truly hope you will read through my long winded reply. I would thoroughly enjoy a continued debate on this subject.

        So it begins:

        replace all taxes with a 30 percent sales tax
        This tells me that you either haven’t taken the time to read the bill all the way through, or you truly don’t understand economics. While I can’t go so far as to say the bill is perfect, I do believe it is the direction our tax code should head. Simply stating that the tax rate is 30% is muddying the waters as well. I would go through the difference but something tells me you won’t care. The bill is designed to be revenue neutral, which means that the revenue of our government would remain the same. No one pays taxes on necessities. And to explain how that works, since obviously we don’t want the government tracking every purchase we make, the government simply cuts everyone a check each month for the amount of taxes they will have to pay up to the poverty level for their income bracket. For example, if the government determined that poverty level for a family of four was $2,000 a month, the government would cut every family of four a check for the amount of taxes they will have to pay on the first $2,000 they will spend for that month. After that, taxes would be paid out of the family’s income.
        would penalize commerce, incentivize credit use
        I don’t see how anyone could argue that a sales tax would hurt commerce. First off, it would increase the amount of money people bring home every month, which was exactly the liberals argument for the big stimulus Obama passed during his first term. Secondly, it incentivizes productivity because people aren’t working their rear ends off just to have a big chunk taken out of their paycheck before they even see it. Third, it doesn’t incentivize credit use, it incentivizes saving and investing. The FairTax gets rid of capital gains tax and estate tax along with the income tax. I don’t know how anyone can argue that promoting lack of productivity through an income tax is better than promoting savings through a sales tax. America as a whole, not just the government, has a problem with saving, hence why most people’s retirement accounts are underfunded.
        lowering government revenue, thereby increasing the debt and deficit.
        I already explained that the FairTax is designed to be revenue neutral, but I wanted to also make the point that the federal government already receives too much money from the citizens.
        Second, there is no evidence that lowering taxes and deregulation improves the economy. Actually, lower taxes lead to greater income inequality.
        First, please listen to this, it’s a little lengthy but if you don’t do it now, you surely won’t do it after you read the rest of this. Podcast from The Cato Institute Second, any change in the tax rates has a significant impact on the economy and I don’t see where anyone has ever tried to argue that they don’t. You’re saying is that lowering tax rates doesn’t help the economy, yet everyone else in the country is arguing that letting the tax rates go up for the middle class would be devastating to our economy. I classify this as an argument that raising taxes hurts the economy. Now how can you believe that raising taxes would hurt the economy but deny that lowering taxes helps the economy? Further, if you believe that people having more money in their pocket to spend helps the economy, does it not make sense to then make sure that you increase the amount of money in the pockets of the people who have the most disposable income? Next, I’m not sure what your first chart is supposed to show me other than the tax rates for higher income earners have always been higher than those of lower income earners. There’s nothing on that chart to correlate the tax rates to the state of the US economy at those times. As for the income inequality piece I say that America spends entirely too much damn time worrying about how much the other guy makes. If people would put as much effort in their own wealth building as they put into griping about other people’s wealth, maybe they wouldn’t be poor. Taxation has little if anything to do with income inequality. What causes income inequality is that wealthy people are taking the time to make sure their kids learn how to do something productive that will result in them making more money while poor people are waiting on the government to teach their kids for them. And don’t give me the “well rich people have time to do that kind of thing” bologna because if you don’t have time to raise your kids you should have just aborted them.
        The failure of Congress to regulate the shadow-banking industry and its eventual decision to repeal The Glass-Steagall Act created the unregulated environment that made today's ongoing depression possible.
        While I appreciate your recitation of liberal talking points, I really do wish you understood the real problem. The problem isn’t that there wasn’t enough “government regulation” rather that there wasn’t enough “consumer regulation”. The true problem is that people, like yourself, want to be naïve and expect some “big brother” figure to take care of things for you. For instance, the mortgage collapse of 2008 would have never happened if people had been smart enough not to buy houses they couldn’t afford. They should have been smart enough and skeptical enough to understand that the banks number one goal is to turn a profit. They don’t care about anything but that. Now are the banks at fault too? Sure, they were entirely too greedy. But they had government backed groups like Fannie Mae and Freddie Mac saying “go ahead and make the loan, we’ll guarantee it” and the banks in their ignorance and greed believed it. The idea that any entity is too big to fail is absurd. If a big entity like Bank of America failed, someone else would step up, take their place and hopefully fix the problem. When the government jumps in before that can happen, they simply reinforce the bad behavior. Now don’t respond in a blind fury about how I think we shouldn’t have any government regulation because that’s not at all what I’m saying. My point is that there are some places where government under-regulates and many places where it over-regulates. The government should be more worried about holding itself accountable than private entities.
        In addition, the idea that companies will suffer if the wealthy - who have siphoned the country's wealth into offshore bank accounts and hedge funds - are taxed is ridiculous.
        Maybe I wasn’t clear. I wasn’t simply saying that companies will suffer if the wealthy are taxed. I was saying that one, the wealthy people are the companies and two, that the rest of us will suffer. While I don’t understand the notion of taxing someone with intent to make them suffer, the fact is that, as you’re so fond of pointing out, the wealthy people you want to tax are all in positions that will permit them to dodge the taxes or pass them on to someone else down the line. It’s that simple and there’s no other reality than that.
        Those who profit from traditional business models (e.g. former Costco CEO, Jim Sinegal) won't cutback on employees or wages for their own personal gain since doing so would hurt both their business and their income.
        Do you know what a traditional business model is? It’s the same as the one that the “assholes” like Mitt Romney use. It’s quite simple when you boil it down. Bring in more money than you spend. Taxes fall under that spending category and every business owner has a bottom line they have to meet. For some it may be income=outflow but for most it is more income to less outflow so if you add things into the outflow they have the option of increasing income, which isn’t entirely in the business owners control, or decrease outflow which would come in the form of whatever they deem expendable.
        less than ten percent of the country makes 300,000 dollars a year while almost half the population possess less than one percent of the wealth.
        And what do you bet that half the population you’re so worried about not having any money were the same ones blowing over half a billion dollars in the power ball last week? I already explained the cause and fix for income equality, so I won’t bother making you read it twice. I don’t think it will help.
        As far as I'm concerned, those who reap the benefits of a loose tax code or profit from the illegitimate methods of income creation found in the finance sector, those who have benefited from the engineering of our marketplace should sacrifice a piece of their prosperity for the common good.
        You make it sound as if the entire reason that the successful people in this country have what they have is because the government gave it to them. While I will certainly agree that our capitalist free market society is the only reason that these people have done well for themselves, I can’t see how that could ever be construed as the only factor. If that was the case then we would all have more money than we know what to do with. The people you’re asking to sacrifice are the exact same people that did the engineering of our marketplace. Most importantly, I do not, and will never understand how anyone could possibly believe that taking money from people who’ve worked their way to the top and made an effort to make something for themselves, and give it to the people who are too damn lazy to make even a fraction of the same effort. Instead we should be analyzing what they’ve done and try to teach it to the masses.
        That's what democracy is: a government of the people, for the people that serves the interests of the common good.
        No, a democracy is a form of government of the people for the people in the sense that we each have a vote and thus an equal say in the rules that govern our lives. The idea that the government should serve the perceived common good of the masses is a socialist idea. While socialism might be a wonderful theory, in actuality it breeds complacency and mediocrity, where democracy breeds independence and excellence. The unfortunate side effect of such freedom is that when the masses don’t remain educated and involved, the same government that is charged with protecting their freedom will eventually rule over them.
        The influence a handful of wealthy men wield over policy, over wealth creation and law is not in the interest of "the common good." Anyone serious about preserving what remains of our democracy will advocate for raising taxes on the wealthy, for campaign finance reform and market regulation.
        If you’ve stuck it out this far you might be relieved here, as I actually agree with something you said here. The wealthy do influence policy and law which is not in the best interest of America. And I agree that there should be campaign finance reforms. The problem is we view this differently. From my perspective, the out of touch, rich politicians America keeps voting into office are the ones we need to do something about. Can you honestly tell me that you trust each and every person in our federal government? Trust them not just to ensure you have enough, but to ensure you will prosper? If you do you’re just as naïve as the rest of the masses and I pity you. For all your rhetoric and fancy words, you don’t have enough sense in your head to understand that the one person that you can rely on without out fail is yourself. That you and only you are ultimately responsible for the life you achieve. If you achieve a life of prosperity, pat yourself on the back. If you achieve mere mediocrity, you have no one to be angry with but yourself. Quit blaming others for your short comings.
        The Libertarian platform wantonly calls for the continual reduction of government - they are advocating for the quick disassembly of your democracy - yet they dare place their hands on their hearts and sing the national anthem?
        You’re damn right; Libertarians do want reduction in government. Libertarians have an idealistic world view just like socialists. In both views we want equality, but we disagree on the definition of equality. To us, equality stops at opportunity and the idealist part comes in where we hope that people will be ambitious enough to seize that opportunity.
        Let's not kid ourselves, people. There is no "big government" and the premise that it's somehow - magically - the source of all our problems is a convenient distraction from reality.
        Yet another misunderstanding; it’s not that big government is the source of the problem. The problem is the people themselves. Government is merely the perpetuator of the problem.
        There is no such thing as "less government." There's just government . . . and you're in the unique position to participate in it, either by voting or contributing to your community. Now, some people will argue that, "my job is a valid contribution to this community," and they're right . . . But that doesn't validate the claim that corporate power is a legitimate and trustworthy steward of the common good. If you think it's reasonable to entrust a handful of men at the top of the corporate pyramid with the common good, you suffer from a terrible delusion. The fallacy that "government is the problem" has become an object of belief that obscures the fact that government is a constant but mutable force in human history.
        Define irony: you believe that “entrust[ing] a handful of men at the top of the corporate pyramid with the common good … [is] a terrible delusion” yet you want to trust a handful of different men equally corrupt to fix the problem. You think that just because you cast a vote for a person they magically become an ethical and trustworthy person? Do you really believe you can trust the elected officials of our government? If so then you are the one that needs to “reevaluate the facts, reflect, meditate”. Even in your comments on the different social programs I mentioned focus entirely on adjusting the private market rather than fixing the corruption inside the programs. Not even an argument that the corruption doesn’t exist. Free market is simple, the demand drives the price. That’s marketing and economics 101. If people were smart enough not to pay for something that is overpriced, the seller wouldn’t be able to charge it.

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