Tax Increases Are Not a Debt Solution

[BostonPirate]

So what's has the answer?

If we tax the upper 2% at maybe 60 to 80% -- will that solve the problem?

no

If we get rid of all the loopholes and deductions except the personal, the dependent and the education one, and lower the tax rates across the board by ten percent, it could supply us half the money we need.

Imagine a world in which the IRS is no longer needed. Imagine the better ways we could spend the cash.

I think its estimated that the IRS budget could be reduced by fifty percent.

This method would stop the Big money people from evading, and it would make Corporations pay every red cent they owe, it would put money into the pockets of those that earn less than one million to go buy things and it would give small business the fiughting chance to succeed against the behemoths like wallmart, that now have the tax code stacked in their favor so completely that no one can open a small business anymore.

Corporations have GOT to lose their status as equal to human beings, OR if theyt don;t then every member of the board and every stock holder that owns the corps must be charged with any crime the corporation commits.

 

[thewiz]

Funny thing about Marco Rubio. When he was in Florida, he oversaw the implementation of a tax scheme that pretty much exempted the richest from paying taxes on the multitude of properties they had assembled in the state.

The property tax reform legislation mirrored that which was put in place in Michigan while I was a city manager. The unfortunate thing in Michigan is that taxes can go down -- they do not go up. If a community had property values increasing, the tax measure requires that the millage rate be lowered on property which hugely benefits those with the higher property values (aka "rich).

In Florida, people with high valued homes were allowed to transfer their existing property value to any other area of the state so you could have a shack in central northern Florida and then move that value to, say, Miami Beach or Marco Island. You'd pay the same low property tax bill.

Mr. Rubio stated many times that "no public employee or public service" would be impacted and that if it were, it was a result of local mismanagement, not the state's efforts to screw up the tax structure. Of course jobs would explode in Florida and everyone in the world would want to move there.

Fast forward to today. We have been doing a lot of work in Florida. The recession and collapse of the housing market mean that properties formerly costing $400,000 or $500,000 are today selling (if you can get one to sell) for $200,000 or $250,000. These were condos I looked at in Ft. Lauderdale on the beach.

Most local governments have seen their property values (and subsequent tax collections) halved. The problem is that Mr. Rubio's tax program allows values to increase only 3% or the rate of inflation, whichever is less. Most cities and counties will take 20 to 30 years to get back to what was being collected two years ago. Of course prices do not increase for government services so no one will be laid off -- NOT. If you believe that, you're only fooling yourself.

Florida today has one of the highest home foreclosure rates, one of the highest unemployment rates, huge state, county, and city deficits, and is seeing schools and other services collapse. So much for "trickling down."

The wealthy have never enjoyed such low taxes. The fairy tale that if you cut what they pay, they will spend it and employee people is just that -- a fairy tale. They can buy it now; cutting their taxes won't encourage them to do so (plus they likely don't need it because they have two already).

One does not go out and hire for the sake of hiring; there has to be a demand. Businesses that do otherwise are called "the former American auto companies" and you can see what happened to them at the start of this recession.

And "small businesses" of which are frequently discussed? A business usually makes 2 to 4 percent profit on what they sell. In order to make $250,000 in "profit", they would be selling millions. How many "small" busineses that you know of can do that? And if you are making $250,000 and you cut the tax rate by 3%, you save $7,500. How many employees are you going to hire? And if you don't need those employees because you can handle what you have with what you've got....how likely are you to hire for a "tax break" -- even a 50% one (which is what would likely be required at that margin to hire an employee along with benefits and fringes)?

No, the tax breaks are for the very wealthy and are not going to result in jobs. They are going to result in more wealthy people and less middle/lower income individuals.

 

[Kulindahr]

So what's has the answer?

If we tax the upper 2% at maybe 60 to 80% -- will that solve the problem?

By itself? No.

End the Bush tax cuts for all levels, eliminate all but the dozen most common deductions taken by those in each bracket (and if the dozens overlap, let them), raise the individual exemption to the poverty level, and it both helps the deficit and boosts the economy.

Put the top rate at Eisenhower's 90%, then in the third year start introducing deductions and credits for things that help in the U.S. -- job creation credits, etc. I'd even go for being creative: any unnamed piece of federal transportation infrastructure that is in desperate need of repair can be named after whoever steps up to pay for rebuilding it up to the latest standards -- bridges should be at the top of the list. Make the lettering on the sign with the name more visible or larger proportional to the investment/total cost. Let those be (nonrefundable) tax credits. I wouldn't mind driving on the Koch Turnpike or the Soros Interstate Bridge, if I knew they were sound! And the names would end after twenty years unless the parties stepped forward to keep the item repaired and maintained.

After six years, start dropping that rate at a scheduled pace, until it hits 33%.

That will make a hole in the deficit while dealing with infrastructure.


Another set of tax credits should be U.S.-based energy sources -- solar, "anything to oil", wind, geothermal. Give discounted credits for energy from our immediate neighbors -- for example, Baja California has a lot of room for solar installations.


But the amounts from the rate between 33% and 90% should NOT go into the general fund, they should go directly to paying debt. I'd rather hit debt held by countries with poor civil rights conditions first, but common sense would say pay those with the highest interest first.


And any balance budget amendment should specify that a budget which is not paying down the debt is NOT balanced.

 

[Kulindahr]

The problem right now is at the demand side, not at the supply side.

So long as there is unused production capacity, the issue is always with the demand side -- and the US has incredible unused production capacity.

 

[BostonPirate]

So long as there is unused production capacity, the issue is always with the demand side -- and the US has incredible unused production capacity.

And considering the unemployment rate, it should be a no brainer as to what the fix is.

America needs to start making stuff again...

remember this one?

[ame]http://www.youtube.com/watch?v=QO7VUklDlQw[/ame]

[ame]http://www.youtube.com/watch?v=EyfOBm8-QzU[/ame]

that was the response to unemployment in the 70's and early eighties.

and THAT is why the unions matter today and why busting them is a priority for the GOP.

They do NOT want a labor uprising in america to interfere with their corporate takeover.

 

[Kulindahr]

As long as this "we need to cut taxes to spur job creation" narrative exists, businesses are just going to bleed out the economy in order to push the dialogue so far to the right that taxes on wealthy executives are criminally low. It's pitifully clear.

How about we tax executives at 95% -- but give them a double credit for the annual wages of every job they create in the U.S.? (non-refundable, so they can't end up with more money)

 

[justdra]

I'm all for closing loopholes for everyone, that includes working class. Every year at work, I know people with kids that get back over $7000 grand back and have to make sure I pay in enough taxes just to break even and don't wing up owing more. If a coporation can make billions a year, there should be NO loopholes they can use to get out of paying their share of taxes. The threat of making them pay their fair share will make them stop hiring hasn't worked in the past few years. They have be using the loopholes and still refuse to hire. How will the Reps, once they win the WH, and I'm sure they will in 2016, figure out how to give the coporations their loopholes back if they are taken away?

 

[bankside]

Closing tax loopholes means taking more tax dollars from the economy. It is more taxes! That's a good thing!

Last year, Apple Computer took more money from the economy. General electric took more money from the economy. Coca Cola took more money from the economy. Pepsi too. Eli Lilly took more money from the economy.

We worry when any of those parts of the economy collapses. We should also worry if the government sector collapses, because it is part of the economy too. We should especially worry if a political party wants to push the government sector off a ledge, just as we would worry about a political party that wanted to eliminate mining, or software development, or car manufacturing. We should want the government sector to grow as we want the rest of the economy to grow, because that's what makes sense for economic stability.

At the same time, we should expect the government sector to improve year over year, just as we expect better products from manufacturers, better value from retailers, more choice in restaurants, etc. But it makes no sense to hope for its demise. Tax increases are a debt solution just as greater revenue is a solution for any business seeking a return to fiscal equilibrium. The question is, what do you get for the money?

 

[rareboy]

Jack.

It didn't make sense.

Anyone who thinks it does has drank a lot of the Koch Bros Kool-aid.

 

[BostonPirate]

Sorry Bob, there was no republican majority in December 2010. Democrats had control of both houses and the president signed the bill. You guys own the tax cuts.

no...

the GOP held the country hostage, much as it is doing now, and by refusing to compromise and actually legislate, forced the president to give the tax cuts to the wealthy to preserve the cuts for the poor.

The answer to most of americas problems would be solved if the GOP tried to actually keep its promise of making jobs, instead of killing jobs, statehouse by statehouse, and their reckless behavior has brought this nation to its knees.

The bush tax cuts put us in this mess, and the GOP is insistent to keep it that way, and I guarantee you, the cutting of programs to pay for the wealthy's 400 percent increase in income, as they produced NO JOBS tells the entire story for us.

 

[Jack Springer]

^^^

I was just trying to enlighten you guys. Make you think from beyond the closed doors of liberalism.

 

[BostonPirate]

^^^

I was just trying to enlighten you guys. Make you think from beyond the closed doors of liberalism.

and of course we are just doing the same for you, but for us its getting you to think beyond the iron curtain of the GOP purity

 

[JayQueer]

I watched this video today. It made a lot of sense to me.

Please take the time to watch it -- I know it's long but the Senator makes a lot of good points. He doesn't name-call either.

We need real tax reform and a plan to keep us from continually having this problem.

If you're going to just make a comment without watching this and just trash the speaker or me -- go start your own thread.

http://www.youtube.com/watch?v=VTgdXN3ad04

I'm with you Jack Springer. It's nice to see that common-sense conservative ideas can resonate with gay people.

We are T. E. A. (Taxed Enough Already)

 

[Kulindahr]

^^^

I was just trying to enlighten you guys. Make you think from beyond the closed doors of liberalism.

It would be better for thinking if the speaker didn't employ the same tired falsehoods.

 

[White Eagle]

Actually, we do tax wealth, Jack.

And this is all a lie. There are no tax increases on the table right now. Just cuts in loopholes and tax shelters.

Americans WANT this to happen overwhelmingly and they also BLAME the republicans and conservative most for causing it in the first place, and now blocking the wealthy from paying taxes. I want one simple answer from you JAck, as a human being, and as a friend.

What is more important, feeding children and giving care to the elderly, OR giving the wealthy a deduction on a summer home, a private jet, or any other obscenity they have.

The rich dont pay taxes and I want FIRST to hear why that is moral, and that is logical for our nation to do that.

Yeah, Jack. What he said!

 

[Kulindahr]

I'm with you Jack Springer. It's nice to see that common-sense conservative ideas can resonate with gay people.

We are T. E. A. (Taxed Enough Already)

What the Tea Party types in the House of Representatives are up to is not conservative.

Conservatives believe in calling on everyone top help pay their bills. Conservatives believe in not decreasing revenue when you're already in the hole. The Tea Party types don't.

And conservatives don't threaten to destabilize an entire country's economic system just to get their way. They don't threaten the poor and sick with cutting off their food and care. They don't neglect their responsibilities, like taking care of the highways.

 

[bankside]

When the taxes paid do not cover the services offered, you are not Taxed Enough Already™. You are Shirking Your Responsibility™. Dining and Dashing™. Stealing from the Next Generation™. Being Fucking Cheap™.

In short, you Need to be Taxed More™. Get it?

 

[T-Rexx]

I must say I find the notion that you can't solve the debt crisis by tax increases very strange.

The debt crisis was caused by the Bush tax cuts.

Why do Republicans think we can't fix it by attacking the cause?

 

[TheFireGod]

So what about the current wars and occupations?

All this talk about cutting spending and the Hawks steer away from 'Defense' for patriotic reasons.

 

[thewiz]

All one has to do to see what affect tax cuts upon tax cuts have on the economy (and will have) is to look to Michigan.

There, tea-party governor Snyder (and his Lieutenant Governor Calley) pushed through one of the biggest cuts for business in the history of the state. Businesses have never enjoyed as low of a tax rate and it was sold on the basis that "the economy will shift into high gear." Lt. Gov. Calley happens to be a friend and used the words "explode" when describing the impact of the legislation.

Of course it was passed and paid for by cutting aid to schools (actually employing a tax shuffle which funded colleges from dollars that were specifically earmarked by ballot during the Engler administration and that was going to shift Michigan's economy into high gear). The saved money was given as tax cuts to businesses and the wealthy.

State employees have been repeatedly beat up along with local government workers who must pay a mandated higher share of their benefits or else the entire community sees its revenue sharing from the state reduced. Interesting concept since the revenue shared was originally collected by the cities but taken over by the state so as to be "uniform and efficient."

The result? Well, first the governor hit the road and begged corporations and businesses to hire in order to make the massive cuts appear to be working. And second, it was reported that Michigan's unemployment rate is going UP and not down despite the auto companies again hiring some of the 10's of thousands of jobs that were shed during the recession.

It was interesting that the auto companies -- the greedy, despicable things that should have been allowed to fail (if one listens to Mitt Romney but that, too, depends on the day of the week) -- seem to be getting healthier and are re-employing by the thousands along with reinvesting in plants in communities.

I realize TARP and the rescue of the auto companies was not popular but if you think things were/are bad; you have no idea what would have happened if they had failed. Being a former manager of a community in Michigan that had two major suppliers to the auto industry, both of the suppliers went into bankruptcy because of the auto industry meltdown but survived. They also employed 1,700 people in a community of 12,000 that I used to manage. Those were not minimum wage jobs; they were very good paying jobs with benefits and both are again hiring. The two companies' headquarters were in the city and one had five plants and 3,000 employees spread across the U.S. while the other had more than 8,000 employees in other states supplying the auto industry.

In addition to the payroll, the companies paid roughly 30% of the property taxes collected in the city not to mention the untold contributions to Little League, food banks, blood banks, schools, and various other non-profits.

You can continue cutting spending but the fastest growing job sector shedding employees is now local and state government. Those are not faceless bureaucrats in the land of Oz (where I now enjoy living btw)....they are the people that collect your trash, plow our street, fix the pothole in the road, keep your water running (and safe to drink) along with treating the waste that you forget about when you push the "flush" lever. They keep the trees trimmed and the street lights on together with support from others at city hall (and one cannot operate without the other).

Everyone loathes these employees (along with teachers it seems) and declare they won't pay more. Okay....educate your children, nieces and nephews yourself. Clean out the sewer lines in the street yourself and fix the sidewalks, mow all the roadsides and parks. Hang the banners, pick up the litter after parades, empty the trash cans around town, and don't forget to clean out all the storm sewers lest that crap go into the rivers and streams.

It's nice to say "we have a spending problem and not a debt problem." It's a nice catch phrase but it is also not totally true. Why not reset all spending to the Clinton era along with tax rates? It produced a SURPLUS budget. Now if you want to continue the wars and add any new ones -- you pay for them with INCREASED taxes. It's what was NOT done. Instead we CUT taxes and took the wars off-budget (meaning you could spend whatever one wanted without Congressional approval and without anyone knowing the amount). It also made going to war easy because no one sacrificed (except our volunteers and their families in the military but then, that was just their job -- and my son is one of them).

It's time to cut the bullshit along with smoke and mirror games in Washington. As one who used to vote mostly Republican, this next election I am contemplating pulling the nuclear lever and going all Democrat. What is occuring now shows me that the other party would sacrifice -- me and anyone else who is not a millionaire -- for an ideological concept that has proven to be a failure over and over again.