Obama on Fiscal Responsibility

[ikol]

Economic Darwinism at it's finest.

 

So you're more in favor of economic intelligent design?

[MattZ]

Without reading the rest of the discussion on this point I do have a major problem with this statement. If the business is hanging on by a thread it is a business issue. I fail to see how if you earn $100 and pay $28 tax on it that by increasing the tax to$30 will make the owner close up shop. His net profit goes from $72 to $70 go ahead and add all the zero

[bobbob1313]

I was referring to Alternet.

 

I'm not sure how I feel about the estate tax and all that makes me feel. It's not necessarily earned income, so why should it be subject to income taxes? Isn't the fact that your family can not have to worry about money one of the main reasons to accumulate wealth?

[John Smith]

Again, I think my point continues to be missed. I am not saying anything for you or futureage1 to disagree with, although you both continue to disagree with me. I am saying that whether you agree with it or not, my employer (and many others) need to decide whether to keep running their businesses or not. You may think the 7 with however many zeros after it doesn't matter. I agree with you. And my point is, again, all that matters in this discussion is what HE THINKS.

 

And the "hanging on by a thread" point was not meant to illustrate whether this is a business problem vs a tax issue. What I tried to do there was to present reality for people like my boss. This is reality -- his business is on the edge. He needs to make a decision about whether to re-invest in the biz and whether to keep plugging away. He sees more risk now (he has to reinvest) given an uncertain future, more downside, and lower upside with higher taxes and more regulation. You may not agree with his calculation, and I may not agree with his calulcation. But it is his calculation to make. If people like him start deciding that it's not worth it anymore, there will be more layoffs, and a slower recovery. What are you guys disagreeing with?

 

I'm really not understanding you. Of course it is his decision to make. But if his business is profitable, and it is his livelyhood and it is working sucessfully right now a tax increase is irrelevant. If someone uses Joe the plumber economic theory and whines that they may close their doors if they have to pay one more dollar in tax, then perhaps they should shut their doors. SOmeone like you could simply take up the client list and run your own new business. For them it is just blatrhering historonics and putting on a show. If he treally is saying thsi shit he is saying I'll give it all up for the sake of $2 because it's mine. Waaa waaa waaa. This only really works if he has a real alternative.

 

In all honesty I work in the tax department of one of the world slargest companies and we make no decisions based on income tax issues. They are all based on business decision.s For instance the former president and his minions keep streeing how lowering taxes causes business to create more jobs. I can tell you truthfully that my company did not create one single job over the last eight years because of tax cuts...we create them for business reasons period.

[MattZ]

I'm really not understanding you.

 

You aren't the first. I run into this a lot.

Let me put it this way. I am all for letting the Bush tax cuts expire. But the "top 2%" don't exist in a vacuum where we tax them and everything goes on hunky dory as planned. The top 2% will change behaviors based on a variety of factors including the tax code. Now, whether it's my (hopefully) rare and extreme example where it ends up being a negative piece of the pie in a business's larger decision to close, or it works itself out as a cost that gets passed down in some other form (e.g., business owner cuts expenses by laying off workers to juice his income pre-tax so that he nets to the same spot), I just think there are consequences to these actions. Consequences that I don't understand and can't predict. But I am pretty confident that they are there and to engage in this discussion without acknowledging they exist seems to be dishonest. Again, I don't have any answers here.

[tugmoose]

Economic Darwinism at it's finest.

So, what's the answer? Who is responsible for these kids forced to eat cheese sandwiches? Should they layoff more teachers so all kids can have identical lunches?

[austrya]

Thanks for the reminder that I need to send the kids to school tomorrow with a check for their lunches.

[Moss]

So, what's the answer? Who is responsible for these kids forced to eat cheese sandwiches? Should they layoff more teachers so all kids can have identical lunches?

 

How about buying a few less tanks or something. Or does that mean the evildoers will get me.

[tugmoose]

How about buying a few less tanks or something. Or does that mean the evildoers will get me.

Fine. So let's start a priorities list. Where does "Upgrade Free Lunches" fall? Before or after Universal Health Care? Heat and Housing?

[Moss]

Fine. So let's start a priorities list. Where does "Upgrade Free Lunches" fall? Before or after Universal Health Care? Heat and Housing?

 

OK

 

Free lunches because it should be easy

Heat and housing

Health care

Tanks

 

I'm not being flip (well I was but I'm not now), I hear what you are saying. It just seems sad we can't feed hungry kids.

[tugmoose]

OK

 

Free lunches because it should be easy

Heat and housing

Health care

Tanks

Yes, free lunches should be easy, BECAUSE THEY ALREADY HAVE THEM!!!

 

(sorry to shout.)

[Moss]

Yes, free lunches should be easy, BECAUSE THEY ALREADY HAVE THEM!!!

 

(sorry to shout.)

 

Well then it should be easy to upgrade from the shitty cheese sammiches.

[tugmoose]

Well then it should be easy to upgrade from the shitty cheese sammiches.

OK then. Hey, you with the tumor, not so fast!

[jff]

Well then it should be easy to upgrade from the shitty cheese sammiches.

 

Having eaten my share of hot public school lunches, I'd rather have a cheese sandwich.

[Analogman]

OK

 

Free lunches because it should be easy

Heat and housing

Health care

Tanks

 

 

And water.

[Moss]

OK then. Hey, you with the tumor, not so fast!

 

I know I'm being overly simplistic. I don't have any answers. I do know our priorities have been out of wack for a long time.

[Artifice]

ETA: One last point -- I am not advocating that we should lower taxes on the top 2% either! My only point is that I am concerned about the impact. I don't know how this all plays out, and while it is easy to tax the top 2% at higher rates (higher cap gains too), I am concerned about unintended consequences. Again, there is nothing here to disagree with. If this causes my employer to go home, this results in me losing my job. I'd say that's an unintended consequence.

 

Besides the other testimony youve seen here, I'll tell you how it'll impact small business owners, as I deal with them profesionally (not a CPA). These companies are predominantly LLCs, LLPs & S Corps - a/k/a "pass through" entities. The income from these companies gets taxed on the business owners personal returns via schedule E. Raising "corporate taxes" doesn't do anything to these guys.

 

Raising the top marginal rates on personal income by 1% means that, ostensibly, they'll have to pay 1% more on the amounts they make in excess of - what is it now $200k? BUT, they can also just expense more on their businesses, or do a dozen other offsets. One of the ones they could do is pay themselves salary, which still gets taxed anyway, but now they have to pay FICA, etc, like the rest of us shlubs... To a salaried professional (like myself), that particular brand of crying ranks right up there with the Cap Gains earners who receive no salary (and therefore pay no withholdings taxes), yet still cried about 28% cap gains rates, even though they get to carry losses forward, net out, like kind exchanges, etc. Poor guys. Now that those are taxed at 15%, you often see effective tax rates for these guys in the 3-5% range, while most salaried people pay about 11-12% (or more if no kids) even if they have a good accountant.

 

If you wanna gripe about fairness, the discussion should always be done at the effective tax rate level, because posted rates are meaningless when nobody pays them.

 

And back to these kids - I'm not crazy about the stigma of singling these kids out because their parents are deadbeats. I understand its easy, and perhaps even effective, but way to make the kid pay for the sins of their parents. Also, I do think every kid should be fed a nutritious meal, and I really don't care how commie that sounds.

[John Smith]

So, what's the answer? Who is responsible for these kids forced to eat cheese sandwiches? Should they layoff more teachers so all kids can have identical lunches?

 

I think the republicans/christian right have the answer F those people. If they can't aford it it's not MY responsibility. If they can't survive let them starve. So what if the underclasss gets larger and larger perpetuating it's self. Just don't make me look at them when I walk down the street. Go USA Go USA!

[John Smith]

You aren't the first. I run into this a lot.

Let me put it this way. I am all for letting the Bush tax cuts expire. But the "top 2%" don't exist in a vacuum where we tax them and everything goes on hunky dory as planned. The top 2% will change behaviors based on a variety of factors including the tax code. Now, whether it's my (hopefully) rare and extreme example where it ends up being a negative piece of the pie in a business's larger decision to close, or it works itself out as a cost that gets passed down in some other form (e.g., business owner cuts expenses by laying off workers to juice his income pre-tax so that he nets to the same spot), I just think there are consequences to these actions. Consequences that I don't understand and can't predict. But I am pretty confident that they are there and to engage in this discussion without acknowledging they exist seems to be dishonest. Again, I don't have any answers here.

 

 

Saying that the top 2% will change their behaviors if their taxes are increased is and has been the accepted argument of the right for years and years and years. For most of the Reagan years, the golden age for

[Guest Jules]

Ahh fuck it. You guys know everything.

[lost highway]

I think that a lot of people who are responsible for the worst, biggest, chunk of this disaster will be the last to feel its sting. That cruel irony aside I think a lot of what put the U.S. in its current economic situation is an attitude that transcends class or political affiliation. It is so true that it sounds trite: short sighted -ness, buy now/pay later, any growth is good growth etc. From naive people buying explode-able mortgages to greedy fat cats trading them. I mean shit, do you think Detroit would have taken a dump if investors didn't have so much control over corporations?

 

Everyone from Richie Rich, to Bob middle class can effect a company's decisions when they own stock. Anything that makes the numbers look good will be gravy with someone who plans on owning a chunk of a company for less than two years. That kind of thinker would have gotten pretty peeved if GM had ditched most of their gas guzzlers and started experimenting with hippy-mobiles in 2002. No one (with shares, or a seat at the board) minded that the geological, and economical, and political evidence suggested that gas was hitting a crunch sooner than later.

 

Sorry, a bit of a rant. What Obama is doing is difficult. Most of it strikes me as necessary. Not all of it will work as intended. But, it is just this kind of discomfort that can turn this country's head around and realize that a healthy economy might move just a little slower than ours did at the top of the bubble a few years back.

[Guest Jules]

Besides the other testimony youve seen here, I'll tell you how it'll impact small business owners, as I deal with them profesionally (not a CPA). These companies are predominantly LLCs, LLPs & S Corps - a/k/a "pass through" entities. The income from these companies gets taxed on the business owners personal returns via schedule E. Raising "corporate taxes" doesn't do anything to these guys.

 

Raising the top marginal rates on personal income by 1% means that, ostensibly, they'll have to pay 1% more on the amounts they make in excess of - what is it now $200k? BUT, they can also just expense more on their businesses, or do a dozen other offsets. One of the ones they could do is pay themselves salary, which still gets taxed anyway, but now they have to pay FICA, etc, like the rest of us shlubs... To a salaried professional (like myself), that particular brand of crying ranks right up there with the Cap Gains earners who receive no salary (and therefore pay no withholdings taxes), yet still cried about 28% cap gains rates, even though they get to carry losses forward, net out, like kind exchanges, etc. Poor guys. Now that those are taxed at 15%, you often see effective tax rates for these guys in the 3-5% range, while most salaried people pay about 11-12% (or more if no kids) even if they have a good accountant.

Everything written here is so misleading and assumptive it makes me sick. This is the kind of crap that makes me not even want to participate in these kind of threads. Just because it's "not that much money" or "they can just offset it by other means" doesn't make it ok. It's socialism at it's finest. And I, for one, don't like it. So take this crap across the pond.

[Guest Jules]

Everything written here is so misleading and assumptive it makes me sick. This is the kind of crap that makes me not even want to participate in these kind of threads. Just because it's "not that much money" or "they can just offset it by other means" doesn't make it ok. It's socialism at it's finest. And I, for one, don't like it. So take this crap across the pond.

[mountain bed]

Everything written here is so misleading and assumptive it makes me sick. This is the kind of crap that makes me not even want to participate in these kind of threads. Just because it's "not that much money" or "they can just offset it by other means" doesn't make it ok. It's socialism at it's finest. And I, for one, don't like it. So take this crap across the pond.

Ahhh, my brother....if we don't get to a one-world socialism how can we ever get to the 'rapture'?

[bjorn_skurj]

See, it's a parallel to what Willie Sutton said when asked why he robbed banks. The American people as a whole (pardon the pinko language) voted for this when they elected Obama and the Democrats. (Dude obviously has his detractors, but he still has a two-thirds approval rating, I think.) To enact what the people voted for, Obama is going where the money is, where it has been migrating to since Reaganomics. It is authoritative redistribution of wealth, sure. But it's being done in an attempt, which may well not work and then IHVH help us, to restore a sustainable balance to the economy and resuscitate the middle class. Does the middle class deserve this kind of help, after buying houses/HDTVs/fancy vacations they can't afford? Maybe, but what are the consequences of them taking their licking? Democracies can weather quite a bit in terms of bad economies, but if it gets TOO bad, very bad things can happen, like in Germany in the early '30s. And since the middle class still gets to vote - there's a plank of the GOP 2012 platform for you: only people with FICA scores over 680 can vote! - are they really, overwhelmed by a wave of contrition and self-denial, going to vote to punish themselves? Ultimately, I still hearken back to what the guy from the London School of Economics said on the radio one night last fall when TARP was being unrolled - "It is better to have high taxes and a job, than low taxes and no job."

And I will also posit a form of noblesse oblige onto the wealthy - they didn't get rich in a vacuum, so they are obligated to pitch in a little more when things are sucky.