Opportunity Cost: Tax Payer's Enemy
Most American tax payers could not give a definition of the term “opportunity cost”. Just as most Americans could not tell you what al-Queda was, prior to 9/11, 2001. Not knowing however, did not stop al-Queda from attacking America, and not knowing what opportunity cost is, will not stop those oppressive and suffocating costs from forcing future tax increases on income earners in America and pushing the nation toward bankruptcy.
There is a simple economic truth that is lost in the political battle for your vote. That truth is this: During positive economic growth, taxes should generally be raised, and during economic downturns, taxes should generally be cut, if balance is to be maintained for the government and taxpayers across generations. Politicians routinely lie to their constituents on this matter however, telling voters what they want to hear, instead of the truth about the economics of taxes.
For example, Republicans continue to make the blanket statement that cutting taxes creates more revenues. It sounds too good to be common-sensically true. That's because it is. In the 2002 and 2004 elections Republicans could routinely be heard touting the lie that cutting taxes would increase government revenues. The Congressional Budget Office, the Federal Reserve, the former Comptroller of of the U.S., David Walker, economists now have the numbers. Tax cuts, while stimulating expansion of businesses and jobs where consumer demand is healthy, do create an increase in revenues from the new business expansion and growth. However, this increase in revenue to the federal government does not equal the total of revenues lost by the tax cuts. Only a percentage of the lost revenue from the tax cuts is recovered through new revenues from business expansion.
Conversely, Democrats will tell voters that increasing spending which puts more Americans to work through retraining, education spending, and extension of unemployment benefits, will stimulate the economy by increasing wage earning consumers and the amount of money they spend, and thereby increase tax revenues down the road. Like the Republican lie however, the cost of deficit spending to increase employment, does not necessarily equal the new tax revenue growth created by those newly employed. The national debt increases, and the amount spent on the interest payments on that debt grows as well; more than the tax revenue increase from expanding the work force. The work force will expand and contract, the interest on debt gets paid, regardless.
Debt limits one's options. There simply is no truer statement than this often heard from Libertarians. There is a loss of freedom of choice when one is carrying debt. Each month, a debtor has to pay a certain percentage of their income to pay back a portion of the principal on their debt, and in addition, interest payments associated with that borrowing. The percentage of one's income spent on debt, is money one cannot spend on other needs and wants going forward. This is the definition of opportunity cost by example. One's opportunities to choose what to buy and for how much in the future are reduced by the previous choice to borrow and repay a debt.
The tax payers in America have chosen to re-elect politicians who have nearly doubled our national debt in just 8 years. The politicians they re-elected doubled the national debt in order to spend money on current voters and national 'needs', borrowed from future wage earner's page checks, in order to get the votes of voters in current elections. Pay very close to attention to that last sentence, because it is crucially and fundamentally true. Deficit spending and debt results in future wage earner's higher taxes taken from their paychecks.
The American economy and the value of its IOU's, called U.S. dollars, rests on a concept known as the full faith and credit of the American government to pay its debts. If the American government were to ever default on making its interest and principal payments on its debts, the government would be subject to remedies petitioned by its foreign creditors. Needless to say, such an event would result in the collapse of our economy, inflation and unemployment would skyrocket, and rapidly growing percentages of Americans would be thrown out of their homes and jobs. To put it simply, the government cannot afford to NOT raise taxes on future workers. If the government doesn't raise taxes on future workers, it will not be able to pay its debts and everything economic comes crashing down.
The big problem is, no one knows how much we can tax future workers before we compromise the full faith and credit of the United States. Because no one knows where that limit is, (which would require seeing into the future of events and challenges facing future tax payers), prudence and caution are mandatory to insure we do not cross that line into the bankrupting of America in our near, or even distant, future.
The government cannot afford to continue increasing its national debt, or it will have to raise taxes so high on future workers that those workers will revolt. They will revolt against working for less and less net pay to the point that workers are forced into choosing to buy food instead of paying their tax debts. Many of these workers will seek employment in the underground economy (drugs, prostitution, crime, and tax evasion) where income is not reported, and therefore not taxed. (This underground economy already exists).
Others owning businesses will find themselves unable, due to increasing taxes, to pay as many employees and begin to lay off workers to reduce their costs, which in turn will reduce the number of customers they can serve. Still other future workers will protest their government's taxes and demand the government lower taxes, which would cause the government to default on its debts and the entire economy crashes as a result.
One often hears the argument that our government has survived very high debt in the past as at the end of World War II and the Great Depression, and we prospered afterward. That was true, then. It will not be true now or in the foreseeable future. The difference is that after WWII, America had an enormous amount of economic growth ahead of it in a rapidly growing work force and consumer base (baby boom), and vast untapped export markets to develop. Our economy then could tap into bringing women permanently into the new work force in the 1950's, 60's, 70's and beyond. Most of the nation's in the world then, were not as innovative nor as productive as ours, making a bright future of American exports possible. That is not the case today.
Today, many of America's natural resources, used in the past to manufacture goods and export them, are no longer abundant or cheap. And an untapped work force of new and educated and innovative consumers, is in ever shorter supply, unlike the period after World War II. Many thought we could deal with the worker shortage by turning a blind eye to illegal immigration. But, illegal immigration has proven to cost more to our economy and government spending than it brings in the form of taxes paid to the federal government.
Our growing dependence upon foreign imports of oil, food, and manufactured goods at the rate of 3/4 of a trillion dollars per year more than we export, literally means a loss of 3/4 trillion dollars per year to foreign economies. (This trade deficit has been growing for 30 years straight.) The opportunity to use that money going overseas, to create jobs here, to make and sell American products for American consumers, is lost. It is an opportunity cost that is costing American's jobs, wage increases, and increasingly, causing more and more Americans to file bankruptcy and forfeit their homes, and middle class status.
The opportunities to choose options in our future, 2, 5, 10, and 30 years from now, which are in our best interest instead of the interest of our foreign creditors, are growing ever more limited. And as our future choices become more limited, their cost those chioices continue to rise. Voters and their reelected politicians have chosen to add 2 trillion more dollars to our national debt in the hopes of stemming an economic meltdown today.
While no one wants an economic meltdown today, the addition of 2 more trillion dollars to our national debt in addition to the 4.5 trillion already added since 2001, is seriously compromising our choices going forward. Voters can no longer afford to tolerate politicians who insist on voting for legislation and spending and tax cuts without prioritizing current benefit and future cost. We have arrived at the time when we must stop acting like the wealthiest nation in the world, and start acting like the most indebted nation in the world, which in reality, we have become.
When the consumers are strong and buying and business is having trouble keeping up with demand and borrowing money to expand production is difficult, targeted (as opposed to blanket) tax cuts toward business and investors in businesses, can make sense. Such tax cuts will stimulate further economic development and jobs. But, there is a future price to be paid for such tax cuts when the government is carrying debt.
On the other hand, when the economy is slowing like now, due to consumers struggling to find the money to keep purchasing, businesses cut jobs due to lack of demand, not lack of money to expand their business. In such times as these, targeted tax cuts (as opposed to universal tax cuts) aimed at consumers can make sense when the economy is threatened by falling consumption. But, again, such tax cuts are not without a cost down the road when national debt is high and growing.
Debt in previous generations was considered more a last resort than a first choice. Our government over these past many years, has increasingly abandoned this traditional view of debt, Republicans and Democrats alike. Our debt now threatens our ability to respond to future crises, our ability to elect less expensive options, our ability to choose at all in some cases. Reducing spending by the federal government means redefining what our goals are, and how we will act in the future. Reducing spending will reduce our deficits.
But, reducing spending to the point of eliminating our deficits and lowering our national debt, will make poverty in our society grow dramatically, and sow the seeds of voter and citizen discontent. The solution to our debt problem must be a combination of redefining who we can afford to be, cutting spending and raising some taxes in a fashion that yields the greatest benefit for the most Americans present and future. That is no easy task. But, that task, if undertaken, can only be undertaken by the voters. Our current lot of politicians have no stomach for it.
If one loves this nation, one will insist that she be managed with the goal of insuring her future, not increasing her future risk. If one loves one's children, and seeks a future for them equal or better than the quality of life the parent has enjoyed, reelecting politicians responsible for this selling out of America's future for next year's reelection, must be halted. If one wishes to meet their end with the knowledge that they lived responsibly and with the best of intentions for those to follow them, one has an obligation to exercise the power of their vote for its intended purpose, to remove politicians who would sacrifice our future for their political career.
Voting out incumbents, voting for challengers, in a time of national crisis caused in no small part by politicians, is the only responsible vote. When enough American voters choose to vote responsibly in this manner, most of the challengers they elect will observe the lesson of the politicians they replace, and seek to govern for the nation's future, as well as their own, as the appropriate way to earn their reelection. The opportunity cost of reelecting today's Congress, has simply become too high.
The one certain truth about debt is this. Pay now, avoid debt, and one gets the best price. There is nothing one can buy through debt, that won't end up costing very much more on credit, if and when it is payed off. And the only reason debts are not payed off, is bankruptcy. Weighing the cost of debt against human suffering and privation, and making careful targeted decisions to optimize our future, should be the single greatest priority of every politician in office. Since, it isn't, it is up to the voters to make their removal from office their top priority. We simply will not achieve responsible government by reelecting irresponsible politicians.
Posted by David R. Remer at October 19, 2008 01:35 PMwomanmarine, this excerpt from the article pretty much covers the thrust of the article:
At one point last week the Morgan Stanley $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank.
While the rescue was necessary, it would appear the implementation leaves a lot to be desired. That said, the implementation hasn’t yet begun from what I understand. The government is still working out the details and arrangements, and now would be a great time for voters to contact their Congress persons and insist this tax payer money NOT BE USED for Bonuses to reward failure.
Compensation according to employment contract is fine, as far as I am concerned. Bonuses for bankrupting the company however, are outrageous and an insult to tax payers present and future.
Posted by: David R. Remer at October 19, 2008 11:45 PMThe rescue bail-out is proceeding just as I expected.
It is exactly what happens when you let the fox in the hen house.
- Staff at 6 banks, including Goldman Sachs and Citigroup, are in line to pick up the payouts despite being the beneficiaries of a $700 Billion
rescuebail-out from the US government that has already prompted criticism. But their greed and gall trumps all criticism. - Financial workers at Wall Street’s top banks will receive
rescuepay deals worth more than $70 Billion, of which a huge portion will be discretionary bonuses, despite their greed and incompetence plunging the global financial system into its worst crisis since the 1929 stock market crash. Cha Ching! - Only days before Lehman Brothers collapsed into bankruptcy protection, Lehman Brothers gave its staff $6.12 Billion in pay-outs.
- None of the banks that “The Guardian” contacted wanted to comment on the record about these greedy pay-out plans. Citigroup and Goldman Sachs shares declined more than 45% since the start 2008.
- Naturally, people are disgusted by the greed of these huge investment banking bonuses to executives, such as Lehman Brothers’ boss Dick Fuld, who was paid $485 Million in salary, bonuses and options between 2000 and 2007. Cha Ching! And U.S. tax dollars are funding it.
- Last year Merrill Lynch’s chairman Stan O’Neal retired after announcing losses of $8 Billion, and took a final pay-deal worth $161 Million. Cha Ching!
- Citigroup’s Chuck Prince left last year with a $38 Million in bonuses, shares, and options, for his fine handi-work and multibillion-dollar write-downs. Some peoples’ greed knows no bounds. Cha Ching!
So, I would like someone try to explain how this
This rescuebail-out will not only merely delay the inevitable, but make it worse later by devaluing the U.S. Dollar, which has been plummeting drastically (see below).
The federal government tells us inflation is currently only 5.37%, but that’s Bull $#!+
The federal government and Federal Reserve have been monkeying around with the way inflation is measured, to fool Americans, and hide the rampant money-printing and the incessant, ever-increasing inflation that it causes. The inflation measurement method almost halved inflation values when it was changed during Reagan’s 1st term in 1983, and again in Clinton’s 2nd term in 1998.:
- ____ INFLATION RATES by 3 DIFFERENT METHODS ______
- 16.0% |———————————————————-
- 15.5% |———————————————————3 (15.6%) pre-1983 method
- 15.0% |———————————————————3
- 14.5% |——————————————————-3-
- 14.0% |——————————————————-3-
- 13.5% |——————————————————3—
- 13.0% |——————————————————3—
- 12.5% |——————————————————3—
- 12.0% |——————————————————3—
- 11.5% |——————————-3——————-3—-
- 11.0% |——————————3-333—————3—-
- 10.5% |—————————-3——-3————-3—-
- 10.0% |3————-3———33———3——-33-3——
- 09.5% |-3———-3 3——3————-3—33—3——8 (9.8%) pre-1998 method
- 09.0% |—3——-3—-3333—————-3-3———-8-
- 08.5% |—-3—-3——————————3————8-
- 08.0% |——333——————————————-8—
- 07.5% |——————————-8——————-8—-
- 07.0% |——————————8-888—————8—-
- 06.5% |—————————-8——-8————-8—-
- 06.0% |8————-8———88———8——-88-8——
- 05.5% |-8———-8 8——8————-8—88—8——c (5.37%) today’s method
- 05.0% |—8——-8—-8888—————-8-8———-c-
- 04.5% |—-8—-8——————-c———8————c-
- 04.0% |c—-888——————-c-ccc—————-c—
- 03.5% |-c————————-c——-c—————c—
- 03.0% |—c———-c———cc———c————-c—-
- 02.5% |—c———c-c——c————-c——cc-c——
- 02.0% |—-c——c—-cccc—————-c-cc—c——-
- 01.5% |——c—c——————————c—————
- 01.0% |——-cc————————————————
- 00.5% |———————————————————-
- 00.0% |———————————————————-
- _______2——2——2——2——2——2——2——2—A
- _______0——0——0——0——0——0——0——0—U
- _______0——0——0——0——0——0——0——0—G
- _______1——2——3——4——5——6——7——8—-
- WHERE:
- 3=Pre-1983 Inflation measurement method
- 9=Pre-1998 Inflation measurement method
- c=Current Inflation measurement method
So, inflation today is actually 15.6% based on the pre-1983 inflation measurement method (not 5.37%).
Regardless of which inflation measurment method used the U.S. Dollar is falling fast.
- _________ U.S. Dollar to EURO Rate_________
- 0.95 |——————————————————-
- 0.90 |x——————————————————
- 0.80 |-x—————————————————-
- 0.85 |—x——————x——————————-
- 0.80 |——-x———x——-x—————————
- 0.75 |————x——————-x———————
- 0.70 |——————————————-x———-
- 0.65 |————————————————-x—-
- 0.60 |——————————————————-
- 0.55 |——————————————————-
- _____—2———2———2———2———2———2
- _____—0———0———0———0———0———0
- _____—0———0———0———0———0———0
- _____—4———5———6———7———8———9
- ____ U.S. Dollar to British Pound Rate _________
- 0.650 |——————————————————-
- 0.625 |x——————————————————
- 0.600 |-x—————————————————-
- 0.575 |-x—————-xxx——————————-
- 0.550 |—xxx——-x———-x—————————
- 0.525 |———-xxx—————-x———————-
- 0.500 |————————————-x——-xxx—-
- 0.475 |——————————————x————
- 0.450 |——————————————————-
- 0.425 |——————————————————-
- _____—2———2———2———2———2———2
- _____—0———0———0———0———0———0
- _____—0———0———0———0———0———0
- _____—4———5———6———7———8———9
- _________ U.S. Dollar to Chinese Yuan _______
- 0.84 |——————————————————-
- 0.83 |xxxxxxxxxxx—————————————
- 0.82 |——————x————————————
- 0.81 |———————-x——————————-
- 0.80 |—————————x—————————
- 0.79 |——————————x————————
- 0.78 |———————————x———————
- 0.77 |————————————x——————
- 0.76 |————————————-x—————-
- 0.75 |—————————————x—————
- 0.74 |—————————————-x————-
- 0.73 |——————————————x————
- 0.72 |——————————————-x———-
- 0.71 |———————————————x———
- 0.70 |———————————————-x——-
- 0.69 |————————————————x——
- 0.68 |————————————————-x—-
- _____—2———2———2———2———2———2
- _____—0———0———0———0———0———0
- _____—0———0———0———0———0———0
- _____—4———5———6———7———8———9
- _________ U.S. Dollar to Swiss Franc _______
- 1.40 |x——————————————————
- 1.35 |-x—————————————————-
- 1.30 |—-xx—————x-x—————————-
- 1.25 |—x—-x———x——-x————————-
- 1.20 |———-x—x—————-x———————
- 1.15 |————x————————-x—————
- 1.10 |——————————————-x———-
- 1.05 |————————————————-x—-
- 1.00 |——————————————————-
- 0.95 |——————————————————-
- _____—2———2———2———2———2———2
- _____—0———0———0———0———0———0
- _____—0———0———0———0———0———0
- _____—4———5———6———7———8———9
For example, regardless of which measurement method, $1 U.S. Dollar has been devalued significantly since year 2000 for all 3 inflation measurement methods:
- Year: __ Pre-1983 _____ Value
- _______ Inflation ______ of $1.00
- _______ Rate __________________
- 2000: ___ 10.0% _____ $1.00
- 2001: ___ 07.8% _____ $0.92
- 2002: ___ 09.0% _____ $0.84
- 2003: ___ 08.0% _____ $0.77
- 2004: ___ 09.5% _____ $0.70
- 2005: ___ 11.0% _____ $0.62
- 2006: ___ 10.0% _____ $0.56
- 2007: ___ 11.7% _____ $0.49
- 2008: ___ 15.6% _____ $0.42
__________________________________________________
- Year: __ Pre-1998 _____ Value
- _______ Inflation ______ of $1.00
- _______ Rate __________________
- 2000: ___ 6.20% _____ $1.00
- 2001: ___ 3.95% _____ $0.96
- 2002: ___ 5.80% _____ $0.90
- 2003: ___ 4.15% _____ $0.87
- 2004: ___ 6.00% _____ $0.82
- 2005: ___ 6.40% _____ $0.76
- 2006: ___ 5.90% _____ $0.72
- 2007: ___ 7.70% _____ $0.66
- 2008: ___ 9.80% _____ $0.60
__________________________________________________
- Year: __ Post 1998 _____ Value
- _______ Inflation ______ of $1.00
- _______ Rate __________________
- 2000: ___ 3.38% _____ $1.00
- 2001: ___ 2.83% _____ $0.97
- 2002: ___ 1.59% _____ $0.96
- 2003: ___ 2.27% _____ $0.94
- 2004: ___ 2.68% _____ $0.91
- 2005: ___ 2.39% _____ $0.88
- 2006: ___ 3.24% _____ $0.85
- 2007: ___ 2.85% _____ $0.83
- 2008: ___ 4.28% _____ $0.79
Why do we have this incessant inflation, and what are the dangers?
Well, ask the banks and their incumbent puppets in Congress (and the voters who repeatedly reward those incumbent politicians with 85%-to-90% re-election rates).
How did we get such a screwed-up monetary system?
Ask yourself WHO benefits most from such a system?
It must be nice to create money out of thin air at a 9-to-1 ratio (i.e. only requiring 10% in reserves), and charge INTEREST on it too.
And then, when the bank collapses, the tax-payers are imposed with attempting to bail-out the banks, which will still fail, since printing more money may delay collapse, but will simply amplify the problem by growing the debt pyramid ever larger.
And today, there are still some people (e.g. Phil Gramm who tells us we are whiners and we have a mental recession) arguing whether we are in a recession or not.
A recession, by some definitions is negative GDP growth for 2 quarters.
Well, what is not know by many is that inflation can hide negative GDP growth.
If GDP growth is measured in ANY past currency (such as below in BOTH 1950 and 2005 Dollars), negative GDP growth is obvious:
That huge dip above in GDP is masked (hidden) when viewing GDP in current 2008 Dollars.
That sort of dive in GDP (relative to both 1950 and 2005 dollars) has never happened to such a large degree since year 1900 (or before, if not ever).
Therefore, if the Misery Index is:
- Misery Index = Unemployment rate + Inflation rate
Then the current Misery Index since 2001, based on the pre-1983 Inflation measurement method, is: 15.6% + 6.1% = 21.7% (as of the end of Aug-2008).
And that 21.7% Misery Index is only less than the 21.97% for Jimmy Carter for 1977-1980.
And that 21.7% is very likely to get much worse (if it hasn’t already since the end of Aug-2008) before 31-DEC-2008, making the Misery Index for 2001-to-2008 that worst ever since year 1948 (or before).
David R. Remer wrote: The government is still working out the details and arrangements, …I’ll bet they are. Cha Ching! And what are the puppets of the puppeteers likely to arrange?
David R. Remer wrote: Compensation according to employment contract is fine, as far as I am concerned.With tax payers money?
There was a time in America where people not only had the freedom to succeed, but the freedom to fail.
Now the tax payers are being forced to prop-up greedy, incompetent, failed banks.
There are over 8000 banks nation-wide, and the majority of them did not indulge in risky investments (such as Wells Fargo).
Yet, tax payers are being forced to keep these failed banks and their staff afloat.
Tax payers are being told that they will make a profit from buying up massive toxic debt.
Who really believes that?
Most tax payers are against it, but it no longer matters, because their politicians don’t care, and why should politicians care when voters repeatedly reward politicians for ignoring voters.
David R. Remer wrote: The government is still working out the details and arrangements, and now would be a great time for voters to contact their Congress persons and insist this tax payer money NOT BE USED for Bonuses to reward failure.The best way to contact YOUR Congress persons is through the ballot box … that is, if you can still get an accurate vote count, and not be nullified by an estimated 3% of voters that are illegal aliens.
At any rate , the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
Some interesting articles:
Consensus Emerges to Let the Deficit Rise
Time for bankers to risk an apology?
Posted by: womanmarine at October 20, 2008 08:20 AMI have seen estimates that by 2050 our children and grandchildren would be required to send more than 70% of their income, on average, to government to cover these costs for Social Security, Medicare, Medicaid, and debt service.
The only way that will happen is if we enslave them. They surely will not be foolish enough to decide electorally to follow up on our promises to make them pay for our generosity ot ourselves.
Full faith and fantasy is more like it.
Posted by: Lee Jamison at October 20, 2008 09:30 AM“I have seen estimates that by 2050 our children and grandchildren would be required to send more than 70% of their income, on average, to government to cover these costs for Social Security, Medicare, Medicaid, and debt service.”
Lee as long as we have the borrow and spend mentality so prevalent today do you think it will take much longer for our children and grandchildren to wise up to our deceptions and well….well put a pillow over our heads and strangle the boomer generation as we sleep?
To try to dismantle OASDI and leave the orphans, widows,disabled and elderly starving in the streets or raise taxes on those that benefited the most from the borrowing seems to be our choices at this point. Either way opportunity costs should be paid by this generation not the next generation.
Apologies by bankers?
Apologies won’t fix the economy.
Greedy banks and CEOs already got their bonuses and billions$, and some are like rutting pigs at the government tit for more. Oink, Oink!
The U.S. has turned into a socialist Bail-Out Nation (mostly, to take care of the wealthy who influence and control a government that is FOR-SALE):
There are so many bail-outs, some were probably missed.
But look at the number of bail-outs today compared to the number before year 2001.
The numbers are growing, as the debt pyramid grows ever larger.
So, let’s say you own a business, and you have 3 competitors in your city.
And let’s say you ran your business honestly and efficiently, but 1 of your competitors did not, and was on the verge of bankruptcy.
How would you and the other 3 competitors like it when the federal government and Federal Reserve step in and give those failed businesses money to stay in business?
How would you and the other 3 competitors like it when the failed business continues to fail, and the federal government and Federal Reserve continue to prop up that failing business?
Perhaps you would finally say, if you can’t compete fair and square, why not do like the failed bank, and get some of our own bail-outs too?
With regard to banks, depositors are already insured upto a limit (which was increased from $100K to $250K per individual).
So why is it necessary to bail-out the staff of the bank, and rich crooks on Wall Street?
It’s not.
The American voters are getting fleeced on a massive scale.
The American voters are being told it is for their own good.
But why shouldn’t the politicians fleece the voters when the voters repeatedly reward the politicians for all of it with 85%-to-90% re-election rates.
Lee Jamison wrote: Full faith and fantasy is more like it.Exactly.
It’s pure delusion.
Since when did the principles and laws of math suddenly become invalid?
Since when did the solution for massive debt, borrowing, money-printing, pork-barrel, and spending become more of the same?
Since when did the laws of the classic pyramid-scheme become valid?
There are laws in some states against pyramid schemes and Ponzi schemes, yet the Federal Reserve runs the biggest pyramid-scheme in all of history, devaluing the currency, while extracting wealth from the the citizens of the nation, to prop up greedy banks and crooks on Wall Street, and telling the voters it is for their own good.
These massive bail-outs in the Trillion$ may delay some pain now, but will make the problem much worse later for many decades into the future.
You don’t have to be a rocket scientist to see that the dishonest, usurious, predatory, inherently inflationary monetary system can only grow the DEBT ever larger, because the monetary system only creates the PRINCIPAL portion of DEBT from thin-air at a ratio of 9-to-1 (only requiring 10% in reserves), while the INTEREST portion of the DEBT (i.e. DEBT = PRINCIPAL + INTEREST) does not exist, which creates pressure to borrow more PRINCIPAL to pay the ever growing DEBT. As a result, DEBT has grown and is still growing to many times GDP (as shown below):
- $55.0T |—————————————-D (Debt~$54 Trillion)
- $52.5T |—————————————-D
- $50.0T |—————————————-D
- $47.5T |—————————————-D
- $45.0T |—————————————D-
- $42.5T |—————————————D-
- $40.0T |—————————————D-
- $37.5T |————————————-D—
- $35.0T |————————————D—-
- $32.5T |———————————-D——
- $30.0T |———————————D——-
- $27.5T |——————————-D———
- $25.0T |——————————D———-
- $22.5T |—————————-D————
- $20.0T |—————————D————-
- $17.5T |————————-D—————
- $15.0T |————————D—————-
- $12.5T |———————D——————G (GDP~$13.9 Trillion)
- $10.0T |—————-D—————G ——-
- $07.5T |———-D————G —————-
- $05.0T |-D——-G ——————————
- $02.5T |-G —————————————
- $00.0T +(1956)————————- (2008)YEAR
- D=Debt
- G=GDP
- The DEBT pyramid has been growing for many decades.
And that $54 Trillion of nation-wide debt (shown above) does not even include the $12.8 Trillion borrowed from Social Security, leaving it pay-as-you-go, with a 77 million baby-boomer bubble approaching (which if included, would place the nation-wide debt at $67 Trilion ($219,672 per person for all 305 Million Americans).
How much larger do you think the nation-wide debt and federal debt can grow?
That’s hard to say.
It depends on inflation, because $10 U.S. Dollars by year 2010 may not be enough to buy a cup of coffee.
Especially when we are already borrowing and printing the money to merely pay the INTEREST alone on the
Yet, some believe more borrowing and money-printing is the solution! ? !
Does that make sense?
Many systems are going to fail because of this one major root problem (a dishonest money system), which grows DEBT ever larger, erodes the currency, and destabilizes all sectors of the economy.
The result of this circular problem (the DEBT pyramid) is incessant inflation, which is economically destabilizing for most people, because it erodes their their savings, their entitlements, their purchasing power, and their incomes. What was once affordable becomes unaffordable (e.g. education, healthcare, food, electricity, fuel, etc., etc., etc.).
This election, it’s obvious that Democrats are going to be rewarded for what has been perceived as ONLY a Republican problem.
Howver, the Democrats had a majority in the House, and what was accomplished?
And it was mostly Democrats (but most Republicans too) in BOTH houses who went along with Bush’s, Henry Paulson’s, and Bernanke’s bail-out schemes.
Why?
Well, who do you think makes 83% of all federal campaign donations of $200 or more?
A very tiny 0.3% of the wealthiest of 200 million eligible voters make a whopping 83% of all federal campaign donations of $200 or more.
The federal government is FOR-SALE.
The vast majority of 99.7% of American voters are vastly out-spent by a very tiny 0.3% of the wealthiest voters who make 83% of all federal campaign donations of $200 or more.
Cha Ching!
And what do most voters do?
They reward those same politicians with 85%-to-90% re-election rates!
Not too smart is it?
We’re crappin’ in our own nest, and some of us are gettin’ crapped on more than others in the process, but its only a matter of time before the DEBT pyramid grows so large, and the U.S. Dollar becomes so worthless, that the bough that overflowing nest we’re crappin’ in finally snaps.
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
Q: George Bush was asked: “What do you think of the Credit Crunch?”
A: George Bush replied: “It is my favorite cereal.”
David,
Your preaching about debt will someday be seen as foresighted. But not today. We are conditioned to need lower taxes and need our own favorite spending programs. There is a lot of potential savings in Defense but that is politically untouchable (e.g. whatever danger cutting our nuclear sub force in half would result in is small compared to the danger of a terrorist attack).
The Fed always raises interest rates to slow growth in good times. Why not slow growth by raising taxes (and lowering them back in bad times)? Same result and you accumulate some money to pay for all this at the same time.
Posted by: Schwamp at October 20, 2008 11:01 AMFormer US Federal Reserve Chairman Alan Greenspan once argued, before the advent of monetarism, that
“under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth… The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit… In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.
Posted by: Rodney Brown at October 20, 2008 11:41 AMj2t2, the only way forward that permits our nation to halt the deadly foreign borrowing, while insuring 10’s of millions of Americans don’t fall from the Middle Class into poverty, is through wealth redistribution. Even the Bush White House now gets this, as evidenced by their willingness to halt golden parachutes and give the SEC authority to investigate and alter prescriptions for CEO and executive compensation.
Ironically, those lower middle class righties who now support McCain’s lies about Obama giving checks to non-tax payers in his tax cut plan, are complicit in a self-fulfilling prophecy. They will get no checks from the Obama tax cuts, but, they will follow and support those who would abandon the Middle Class to poverty by calling for an end to Soc Sec. and Medicare/Medicaid.
Those on the left, have only one responsible course going forward, and that is reforms that more equitably distribute the nation’s wealth in a fashion which sustains and promotes the nation’s integrity and stability going forward, preserving the capitalist system that innovates and rewards success while insuring the Middle Class remains the majority of the population and fit and willing to work for a decent standard of living.
Are they up to this challenge? There is no way to tell at this point in time. I do know, America must change direction and that resistance to change is going to be ugly, fierce, and potentially dangerous to the integrity of these United States.
Posted by: David R. Remer at October 20, 2008 12:55 PMSchwamp, your awareness is dead on. The hope is that your awareness is more ubiquitous in the middle class than the MSM reflects. If it is, we can preserve our democratic republic and alter the structure of our economy to be more sustainable at the same time.
Posted by: David R. Remer at October 20, 2008 12:58 PMRodney, the gold standard is a genie that cannot be put back in the bottle. Observe Ron Paul’s traction in this race.
Adherence to the gold standard would not have permitted the funding of the defeat of communism and the Soviet Union via the arms race, which bankrupted the Soviet Union.
There is an opportunity cost to every decision that is ever made.
Posted by: David R. Remer at October 20, 2008 01:01 PMAn Obama win will only further prove that Americans now value freedom less and are willing to give up freedoms in their pursuit of a govt that will take care of them.
That is the only “opportunity cost” reference that means anything to our nation, and its a damn shame.
Posted by: kctim at October 20, 2008 01:47 PMkctim, you seem to forget that most fundamental conservative experience in the history of early America, that we can raise a barn far more efficiently and faster as a community, than any of us can alone.
Your side continues to want to promote those that have and leave those without to their own devices. Together we can save this nation: divided as your side would have us, we would surely fail.
Your side elected and reelected the worst president in modern history. Why should the rest of America listen to your side and trust its judgment going forward? That would be illogical and irrational, to put it simply.
Rodney Brown, I agree with that quote from Greenspan.
However, I also agree with David R. Remer.
We probably can’t get that genie back in the bottle.
And we probably don’t want to go back to a gold standard.
The U.S. doesn’t have the gold to back up all of the currency in circulation (M3 Money Supply was $10.15 Trillion in year 2005).
In Year 1941, there were 649.6 million ounces of gold.
In Year 2008, there is supposedly 147.3 million ounces of gold.
At $789 per ounce (price as of 20-OCT-2008), the 147.3 million ounces is worth $116.22 Billion.
That $116.22 Billion in gold is less than the two AIG bail-outs of $122 Billion ($84 Billion of SEP-2008 + $38 Billion on 8-OCT-2008).
That $116.22 Billion in gold is about what the M3 Money Supply was in year 1950 ($135 Billion in year 1950).
That $116.22 Billion in gold is 89 times smaller than the $10.36 Trillion National Debt.
That $116.22 Billion in gold is 110 times smaller than the $12.8 Trillion borrowed and spent from Social Security, leaving it pay-as-you-go, with a 77 million baby boomer bubble approaching.
That $116.22 Billion in gold is 465-to-576 times smaller than the $54-to-$67 Trillion of nation-wide debt.
So, while the gold standard helped preserve the currency, there’s really no reason why the currency has to be incessantly eroded today.
The reasons for the erosion of the currency is quite simply to create money out of thin air, and give it to someone to spend.
When they spend that money, all other money becomes worth less.
The monetary system should try to target ZERO percent inflation and ZERO percent deflation.
Deflation is bad, because people can’t the as high a price for the goods they produced as they previously received (i.e. their assets are declining in value).
Deflation is bad, because if bought (or borrowed money) to buy an asset for $100K that can now only be sold for $50K, you are upside-down on that asset (or loan).
Deflation is good if you have a lot of cash, but bad if you have a lot of assets, and very bad if you have a lot of debt.
Inflation is bad, because people can’t get the as much goods at the price they previous paid (i.e. their incomes and savings are shrinking in value).
Inflation is bad, because if you earn $50K and inflation is 15.6% (as it is today, based on the pre-1983 inflation measurement method), that $50K becomes worth only $42.2K in one year.
Inflation is good if you have a lot of debt, but only if you are able to keep-up with the debt payments and interest, which is usually a problem when unemployment rates are high.
Either way, inflation and deflation are economically destabilizing, and lead to more unemployment, foreclosures, homelessness, poverty, starvation, crime, pain, and misery.
The problem is that the federal government and the Federal Reserve have been perpetuated incessant inflation for the last 52 years (since year 1956).
It doesn’t have to be that way.
But no monetary system, regardless of whether it is backed by something of value or not, is vulnerable to abuses.
That is, no monetary system can work if laws are not enforced, and abuses are allowed to exist (and some for a very long time).
That is, all that was required was for the federal government and Federal Reserve to target ZERO percent interest.
But they didn’t, because of greed.
Greed led to excessive money-printing.
After all, if you get to create money out of thin air at a 9-to-1 ratio, and earn interest on it by loaning it to everyone possible, its easy to see why you would try to print all the money you can, eh? Cha Ching!
It must be nice to be able to create money out of thin air at a 9-to-1 ratio (i.e. only requiring 10% in reserves) and then earn interest on it too!
And when someone is foreclosed upon, the bank can confiscate the real property, converting the money printed out of thin air into real assets. Cha Ching!
The only problem is, the greed got out of control, and the inflated property bubble burst and the confiscated property was worth less than the original loan.
OOOPpppps.
So the banks got together and said, we’ve got to find a way out of this.
And low and behold, who was their pasty?
You. And me. And the tax payers.
The banks and corporations got together with the FOR-SALE politicians and said we’ll stick the tax payers/voters with the toxic debt.
And the politicians go along, because they know the voters will even reward the politicians for it with perpetual re-election.
And that is exactly what has been going on for many decades (with positive inflation since year 1956).
And The National Debt (as a percentage of GDP) started growing out of control about 32 years above (since about 1976):
- 120% |————————-x———————————
- 110% |————————-x———————————
- 100% |————————x—x——————————
- 090% |————————x—x——————————
- 080% |————————x—-x—————————x $10.36T Debt = 75% of $13.86T GDP
- 070% |————————x——x———————x-x-
- 060% |———————-x———-x—————x—x—
- 050% |———————-x————x———-x———-
- 040% |——————-x-x————-x——x————-
- 030% |————x—-x———————xx—————-
- 020% |———-x-x-x——————————————
- 010% |x-x-x-x—-x——————————————-
- 000% |——————————————+———————YEAR
- ____1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 22
- ____9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 00
- ____0 0 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 0 00
- ____0 5 0 5 0 5 0 5 0 5 0 5 0 5 0 5 0 5 0 5 0 58
And that chart does not include the $12.8 Trillion borrowed and spent from Social Security, leaving it pay-as-you-go, with a 77 Million baby-boomer bubble approaching.
Include the $12.8 Trillion of Social Security Debt, and the federal Debt-to-GDP is 167% of the $13.86 Trillion GDP!
Today, some Congress persons asked Bernanke various questions.
Some asked what would have happened had they not chosen to bail-out the banks, corporations, and Wall Street.
Bernanke said there would have been more unemployment, and other bad things.
What Bernanke failed to say is that those same things are going to happen anyway, and that it will probably be worse since due to more inflation, and possibly a complete collapse of the currency.
But what can we expect from someone who runs one of the biggest pyramid-schemes ever created in all of history?
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
Posted by: d.a.n at October 20, 2008 02:43 PMFreddie Mac Secretly Paid Republican Firm to Kill Regulation
Posted by: womanmarine at October 20, 2008 02:57 PMHow many people were forced to help raise those barns, David? Having been to a number of those types of events, I can honestly tell you that I knew of not one person who was there against their will. What did we do if there were not enough hands? Well, if we truly believed in raising that barn, we worked harder and got it done. We didn’t wait for govt to force others to do it for us.
Together we can save this nation: divided as your side would have us, we would surely fail?
How are we “together” when I must think, believe and support what you deem is right? Are two sides really “together” when one side is forced to be there? Are two sides really “together” when one side thinks their beliefs are the only worthy of respect?
Sorry David, but “your sides” version of “together” is what has us so divided.
The people should only trust the principles this country was founded on. They will not, the Obama will win and our freedoms will suffer. The American people embracing such a thing is what is truly illogical and irrational.
Posted by: kctim at October 20, 2008 03:26 PMThe Smaller family barns from 4-12 cows were built by friends and the community and the favor was returned, And if you was fortunate and worked the land hard and some good old fashioned luck like not dying and a large family you expanded then anyways here the The Pennsylvania Dutch for a price built the big barns they were a sight to see. we have one that’s two hundred years old.
Posted by: Rodney Brown at October 20, 2008 04:00 PMJust a note: marginal tax rates do not have near the effect on economic growth as does monetary policy.
Posted by: googlumpugus at October 20, 2008 04:21 PMkctim said: “How many people were forced to help raise those barns, David? Having been to a number of those types of events, I can honestly tell you that I knew of not one person who was there against their will.”
That line of reasoning leads to voluntary taxes, kctim. That is not how ANY government in the world can operate. You aren’t really suggesting voluntary support of the federal government, are you? What a laugh!
goo, that depends very much on the problem being addressed, doesn’t it. Monetary policy is limited in the economic variables it can address. So too, fiscal policy is limited in the variables it can address. While there is some overlap, largely they address different economic conditions.
If economic growth is being strangled by high unemployment and poverty, marginal tax rates can be vastly more effective than monetary policy which does not reach consumers directly nor quickly.
In the area of economics, such general blanket statements are prone to being insufficient and incomplete.
Posted by: David R. Remer at October 20, 2008 05:02 PM“Voting out incumbents, voting for challengers, in a time of national crisis caused in no small part by politicians, is the only responsible vote. “
Contrary to what people might think from listening to the advertiser paid media, there are 7 people running for POTUS, on the Illinois ballot in this order:
Barack Obama (DEM)
John McCain (REP)
Cynthia McKinney (GRN)
Bob Barr (LIB)
John Joseph Polachek (NEW)
Charles O. Baldwin (COI)
Ralph Nader (IND)
There are 4 people on the ballot for US Senator here:
Richard J. Durbin (DEM)
Steve Sauerberg (REP)
Kathy Cummings (GRN)
Larry A. Stafford (LIB)
and 3 people for Rep in Congress, in my district:
Janice D. Schakowsky (DEM)
Michael Benjamin Younan (REP)
Morris Shanfield (GRN)
If you don’t like the way the government is run, don’t like bailing out crooks, and don’t like voting for people who will appoint the friends and associates of the crooks to regulate themselves, then don’t vote for someone with a DEM or REP after their name. The ideas all come from outside those two parties, the BS all comes from within them.
Posted by: ohrealy at October 20, 2008 05:28 PMKctim,
I think you missed the point of this post. Republicans have put our children and children’s children into indentured servitude. Oh, and talk about being forced to participate in something, most Democrats never wanted anything to do with this war to begin with. Can just you Republicans pay for it? Is that what you are suggesting? Because I would agree on that.
Posted by: Max at October 20, 2008 05:42 PMDavid:
I agree with some of your sentiments here but would tweak them.
First of all, taxes need to be cut from time to time because they are not indexed. There is not revenue problem in our country (except caused by recessions/downturns).
That is why it “appears” we can cut taxes and raise revenue. It’s because of bracket creap.
I don’t think the problem is on the revenue side. We have done very well for ourselves by keeping revenue at or near 20% of GDP.
I would argue from the spending side. We have a huge problem in this country with government spending. Now it is expected to balloon as we look like we are approaching Democrat control of the house senate and presidency. This looks like George Bush on steroids.
Here are a couple of stats that trouble me on taxation.
The bottom 40% of Americans pay no federal income tax or have a negative tax rate. The top 1% of Americans pay 40% of the Income tax bill. One worry I have is that if we target the top 1% there will be a reaction. Increasing the top 1% taxes can cause a great deal of harm if not done carefully as there must be a backlash. (Honey we are moving to Singapor). To that that few of citizens pay so much is dangerous to our future financial well being.
Just as wealth distribution is out of wack and causes problems for middle america as it stagnates there financial lives, so to does concetrating revenue dependence at the top make our future revenue vulnerable. (The wealth can simply move, or move their money or both).
I think going forward we are in a dangerous position because this political jerk to the left may cause fear in the wealthy and they may harm to economy in order to change the political landscape.
Posted by: Craig Holmes at October 20, 2008 05:47 PMCraig Holmes,
The middle class had carried the tax burden for decades…the middle class is shrinking…the bottom 40% does not include the great tax-paying middle class, because what used to be the lower middle class is now classified as poor.
Posted by: Marysdude at October 20, 2008 06:55 PMCraig,
PS: If the wealthy insists on driving the middle into the poorhouse, they should expect to pay the tax burden, after all the poor cannot do it, there are less middle class to do it…who does it leave that can afford it?
Posted by: Marysdude at October 20, 2008 06:58 PMkctim said: “How many people were forced to help raise those barns, David? Having been to a number of those types of events, I can honestly tell you that I knew of not one person who was there against their will.”
Remer responds, “That line of reasoning leads to voluntary taxes, kctim. That is not how ANY government in the world can operate. You aren’t really suggesting voluntary support of the federal government, are you? What a laugh!
I am laughing Remer, but at you…not kctim. The idea of folks voluntarily helping their neighbors in our past is to be applauded and one can only hope become fashionable again. Never let it be said that liberals of Remer’s philosophical bent would ever allow people to do for themselves what they believe government will do.
Remer then makes a giant leap by concluding that these are the kind of actions and thinking that lead to…horror of horrors…voluntary support of the federal government. Perhaps Remer could provide some more laughs and share with us all how this has happened in our past.
Godless, soul-less, hypocrites and parasites would prefer their helping hand be that of government over neighbor.
“Joe Biden recently asked why his Democrat Party isn’t seen as the “Party of God.” He then went on to answer his own question with this stunning observation: it’s because Democrats are “uncomfortable talking about God.” If they would only talk more about God, their party would be seen as the “Party of God.””
“Obama and the Democrats say they want to help the poor, virtually everything they do makes the plight of the poor worse. Their tax, welfare, and anti-school-choice policies don’t spread wealth, they spread misery. They also spread dependency on Democrats, which may be the ultimate reason why Obama, Biden and the Democrats will never do anything to become the “Party of God.” They’ll only talk about it and hope enough religious voters don’t notice their lack of fruit.”
excerpt from; http://townhall.com/columnists/FrankTurek/2008/10/20/the_party_of_god
Posted by: Jim M at October 20, 2008 07:21 PMCraig Holmes wrote: The top 1% of Americans pay 40% of the Income tax bill.Here we go again.
That’s a true statement, but it is dishonest and devious spin to obfuscate and hide the fact that the wealthiest top 1% pay a lower percentage of their gross income to federal taxes than most people in the middle class in America.
I love it when I see this sort of crap, because it is so easy to debunk.
Need proof?
Just ask Warren Buffet, who paid 17.7% in total federal taxes on a gross income of $46 Million in 2006, while his secretary paid 30% in total federal taxes on $60K.
The tax system is regressive because:
- numerous tax loop-holes and ridiculous complexity which makes it ripe for abuse (mostly, tax loop-holes for the wealthy);
- capital gains and some dividends are taxed at 5% to 15% (which also mostly benefits the wealthy);
- capital gains are exempt from Social Security and Medicare taxes, but not labor income (which also mostly benefits the wealthy);
- income above the cap ($94,200 in year 2006, $97,500 for year 2007, $102,000 for year 2008) are exempt from Social Security taxes.
- 35% |——————————————————————————————-
- 33% |————————-o—o—o——————————————————-
- 30% |—————— o———————-o———————————————= (30% total
- 27% |—————-o————————————-o———————————- federal tax for
- 24% |—————o————————————————o————————- secretay making $60K)
- 21% |————-o————————————————————-o————-
- 18% |————o————————————————————————-o-= (17.7% Warren
- 15% |———-o——————————————————————————- Buffet’s total
- 12% |———o——————————————————————————— federal taxes on
- 09% |——-o———————————————————————————- $46 Million)
- 06% |——o————————————————————————————
- 03% |—-o————————————————————————————-
- 00% |ooo—————————————————————————————
- ____$0__30K__60K__90K_120K_150K_180K_210K_240K … … $GROSS INCOME …
Yet, some people think the weatlhiest 1% should get a tax cut?
Neither of McCain’s or Obama’s tax plans will make the tax system fair, but McCain’s will make the tax system more UNFAIR than it already is, by lowering taxes on the wealthy who ALREADY pay a lower percentage of their gross income than most Americans, who pay on average a larger percentage than Warren Buffet’s 17.7% .
Craig Holmes wrote: Increasing the top 1% taxes can cause a great deal of harm if not done carefully as there must be a backlash. (Honey we are moving to Singapor).That’s their choice to leave the U.S. if they want.
But leaving the U.S. due to excessive taxation is ridiculous when the wealthy, such as Warren Buffet, pay 17.7% of their gross income to federal taxes.
I’d like to know what countries those people would like to move to that tax less than the 17.7% that Warren Buffet and other wealthy people pay.
Craig Holmes wrote: To that that few of citizens pay so much is dangerous to our future financial well being.True. But that is not what is happening.
Please provide us the proof that the wealthy in the U.S. pay a larger percentage of their gross income than MOST Americans.
Good luck, because most Americans pay much more than 17.7%.
Especially when you consider that the employee and employer BOTH pay a combined 15.3% for Social Security and Medicare alone.
Now add in income tax, and it’s no wonder someone making $50 to $150K is paying 30% in total federal taxes (including the half of Social Security and Medicare that the employer supposedly pays, but actually comes out of the employee’s income, because all corporate costs and taxes are merely passed along to consumers).
And don’t show me ajusted incomes after a myriad of tax loop-holes and deductions (not to mention massive subsidies and welfare for the wealthy).
Otherwise, these claims of over-taxing the wealthiest 1% is a clever obfuscation, a devious obfuscation, and a lot of nonsense.
You know how many times we’ve heard that crap about the wealthiest Americans paying most of the taxes?
No one argues that.
The question is, are they paying an equal percentage?
Or do you believe the wealthy shouldn’t have to pay an equal percentage?
If that’s the case, than that explains everything.
Craig Holmes wrote: The bottom 40% of Americans pay no federal income tax or have a negative tax rate.Here we go again.
That’s a true statement, but it is more dishonest and devious spin to obfuscate and hide the fact that all wage-earning Americans pay Social Security and Medicare taxes which are 7.65% from the employee and another 7.65% from the employer (which we all really know comes out of the employee’s pocket), for a total whopping 15.3% in Social Security and Medicare taxes.
For someone making only $15,000 per year, their Social Security and Medicare taxes are $3060, leaving $11,940.
And after the standard deduction ($5,150) and personal exemption ($3,300), which everyone gets, that leaves only $3,490 of taxable income.
40% of Americans, on average, have ZERO net wealth.
20% of Americans, on average, have negative net wealth (i.e. debt).
Also, many states have taxes too.
So to make it sound as if 40% of Americans are paying no taxes is nonsense.
What do you want to do to these low income earners (40% of Americans) to do. Give blood?
Craig Holmes wrote: The bottom 40% of Americans pay no federal income tax or have a negative tax rate.Some people with very low incomes do receive an income credit, but they doesn’t mean they paid no federal taxes, due to the whopping 15.3% for Social Security and Medicare taxes.
So, this spin trying to mislead people into believing that 40% of Americans paying no taxes and/or 40% receive welfare is dishonest.
But, I am not at all surprised by it.
At any rate, the voters have the government that the voters elect, and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful.
Jim M, your comments completely fail to acknowledge the nearly 7 trillion dollars of national debt created in the last 8 years by REPUBLICANS. Or are you one of those Cheneyites who believe we can borrow and never pay back because debt and deficits don’t matter?
Absurdities never cease to be found in your comments. I appreciate your candor however in revealing that you don’t believe we should pay as we go for what we spend. I know this because you oppose taxes, which are the only means of supporting a national military, NASA, interstate infrastructure, etc. You would make taxes voluntary. Why, so you could get free what others voluntarily pay to support?
Sounds about right for right winger.
Posted by: David R. Remer at October 20, 2008 08:51 PMCraig said: “First of all, taxes need to be cut from time to time because they are not indexed.”
Regardless of deficits and debt obligations, Craig? Should we not keep taxes high when we can afford to in order to pay off our debts and recapture the opportunity costs of interest payments on that debt?
Craig said: “I would argue from the spending side. We have a huge problem in this country with government spending.”
That’s an understatment! And it took a Republican administration to create a 1 trillion dollar single year deficit for the first time in history, even when adjusted for inflation. It is truly beyond belief, that Republicans in power who got there on fiscal responsibility campaign promises should be responsible for the greatest debt burden placed on tax payers ever in the history of any 8 year period.
Republicans learned the fiscal talk, but, they had no intention, obviously, of ever doing the fiscal walk, as promised. It is therefore, no wonder that common sense moderate Americans refuse to believe Republicans on economic issues anymore.
On spending, Democrats were bad. Republicans have been a deceptive and lying nightmare. Bush promised for 4 years running after being elected to cut the deficit in half. He has instead doubled and then tripled it, along with the help of a Republican controlled Congress.
Craig said: “Increasing the top 1% taxes can cause a great deal of harm if not done carefully as there must be a backlash. (Honey we are moving to Singapor).”
I appreciate what you are saying here, Craig. But, it really does raise patriotic and national loyalty issues. I would be for a law that says any American citizen with assets over 25 million dollars may not extract more than half of their assets to a foreign residence under penalty of forfeiture to the US tax payers. If one makes one’s wealth in America, underwritten by all the benefits, protections, tax payer assistance of our American system and government, they should not be free to take those assets to a foreign government and society, lock stock and barrel.
If they wish to leave America, that’s fine. But, they may not take all the wealth that America provided them, with them, when that wealth exceeds what anyone would call very wealthy.
But, from what I am reading, there are only a half dozen or so very wealthy families who seem to have no love for America, its government, or paying their fair share for the opportunities this nation provided them to become very wealthy. So, its not like a mass exodus would take place if taxes on the super wealthy were raised.
There is point at which wealth grows so large, that taking half in taxes does not make a dent in the lifestyle that can be enjoyed on the remaining half.
There is also a point at which the accumulation of wealth into too few hands to the extent that masses suffer from homelessness, lack of medical care, sanitation, and dignity, becomes a net liability to a nation and not an asset. This is alluded to in the Wealth of Nations and addressed directly in ethical terms in Adam Smith’s other work, Theory of Moral Sentiments.
Craig very astutely said: “I think going forward we are in a dangerous position because this political jerk to the left may cause fear in the wealthy and they may harm to economy in order to change the political landscape.”
That is a very real threat posed by those 6 families I referred to above. But, that is where reform and new laws need to be implemented. No citizen, regardless of wealth, can be permitted to sabotage the nation for their personal preferences. There are rights insured by our Constitution, but, that is not one of them.
Posted by: David R. Remer at October 20, 2008 09:15 PMDavid R. Remer wrote: There is point at which wealth grows so large, that taking half in taxes does not make a dent in the lifestyle that can be enjoyed on the remaining half.True, but I certainly hope you are not condoning taking half of the wealthiest Americans income just because they can afford it?
What we should have is what is most fair, and still raises the required revenues.
And we should have massive spending cuts as promised by both McCain/Palin and Obama/Biden.
Both said they were going to go through ever department, commission, committee, agency, etc., etc., etc., and cut unnecessary programs, waste, and bloated bureacracy.
Of course, it’s extremely unlikely either Obama/Biden or McCain/Palin will actually reduce spending and waste to any significant degree, as with many of their other numerous empty promises.
But it sounds good, and many voters actually believe it.
However, I don’t think the federal government, which has been deficit spending since year 1956, will ever stop the deficit spending, massive debt, out-of-control borrowing, rampant money-printing and irresponsible spending, until it completely destroys the nation.
Most Americans polled believe a flat income tax percetage is the most fair system (for example).
As you well know (but some obviously still don’t believe it), the current tax system is regressive, as evidenced by Warren Buffet. That’s largely because capital gains are taxed a only 5%-to-15% and are exempt from Social Security and Medicare taxes.
At any rate, the voters have the government that the voters elect, and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful.
Posted by: d.a.n at October 20, 2008 10:26 PMDavid:
Regardless of deficits and debt obligations, Craig? Should we not keep taxes high when we can afford to in order to pay off our debts and recapture the opportunity costs of interest payments on that debt?
No. That approach simply gives congress a higher spending limit leaving the deficits in the same position. Congress would simply add spending, unless we were fortunate enough to have a democratic president and an republican congress again.
You loose the opportunity cost from the increase taxes, and keep loosing the opportunity costs from the interest payments. Interest payments opportunity costs have been dropping for sometime as a percentage of GDP.
That’s an understatment! And it took a Republican administration to create a 1 trillion dollar single year deficit for the first time in history, even when adjusted for inflation. It is truly beyond belief, that Republicans in power who got there on fiscal responsibility campaign promises should be responsible for the greatest debt burden placed on tax payers ever in the history of any 8 year period.
And wow has that gotten worse since the Democrats took over congress. At some point the Democratic Congress must be held accoutable.
I appreciate what you are saying here, Craig. But, it really does raise patriotic and national loyalty issues. I would be for a law that says any American citizen with assets over 25 million dollars may not extract more than half of their assets to a foreign residence under penalty of forfeiture to the US tax payers. If one makes one’s wealth in America, underwritten by all the benefits, protections, tax payer assistance of our American system and government, they should not be free to take those assets to a foreign government and society, lock stock and barrel.
Sounds like socialism.
If you trapped them here, the backlash would be huge. The unintended consequence of denying freedom to these people would be to choose another path to avoid taxation.
Here is an idea that seemed great at the time:
http://query.nytimes.com/gst/fullpage.html?res=9D0CE4DC1239F932A15754C0A967958260
Basically the luxury tax on things the wealthy buy, backfired as they stopped buying them, which only hurt the people who produced them!!
That is a very real threat posed by those 6 families I referred to above. But, that is where reform and new laws need to be implemented. No citizen, regardless of wealth, can be permitted to sabotage the nation for their personal preferences. There are rights insured by our Constitution, but, that is not one of them.
It sounds like you are advocating socialism. And when we target the top 5% there will be a consequence. They pay 95% of Federal Income Taxes now.
There is point at which wealth grows so large, that taking half in taxes does not make a dent in the lifestyle that can be enjoyed on the remaining half.
You are still not dealing with the unintended consequences of increasing taxes. The biggest one I know of is it slows economic growth. We can look to Europe as a model. Economic growth in Europe has been pathetic for years.
It’s far better to reduce spending.
Posted by: Craig Holmes at October 20, 2008 11:46 PMDavid:
Do you really think raising taxes lowers the deficit? I would want to see some evidence of that. I think raising taxes gives congress a higher spending limit keeping the deficit the same.
My evidence is Europe. Many European countries have double the taxes, and still have deficits.
I think you are way wrong on this. If we look worldwide, higher taxed countries should be in much better shape fiscally than lower taxed countries.
Look at Iceland for instance. they are almost bankrupt. Their spending is over 40% of GDP.
I don’t think you can prove your premise of higher taxes meaning lower debt if one looks aroudn the world. I actually think if you look worldwide you will find that tax rates have very little to do with fiscal discipline.
You can’t prove your thesis from world economics. World economicts would teach us that higher taxes has nothing to to with reducing deficits. The only way do do that is reduce spending.
Increasing taxes simply means increase spending.
Craig asked: “Do you really think raising taxes lowers the deficit?”
I used to be in debt. Increasing wages allowed me to get out of debt and sooner by applying my raises as extra payments on my debt. Of course raising taxes CAN help lower the deficit. You been sniffing those GOP funny math books again?
Cutting spending CAN also lower deficits. And Raising Revenues and Cutting spending lowers the deficits even more. At some point, it even becomes possible to lower the debt.
If you are going to argue that politicians will just spend more if revenues are raised keeping the deficit constant, the same argument should be applied to cutting spending which potentially lowers the deficit, enabling them to pass other spending by an equal amount of cuts in other spending.
The math doesn’t change, Craig. +2 and -2 equals zero, no matter whether you are talking toothpicks or dollars.
The issue is not the math. The issue is whether voters will reelect those politicians for whom debt and deficits don’t matter to them, like Dick Cheney and GW Bush, both of whom have publicly discounted debt and deficits as unimportant at one time or another.
The John Warners for whom there can never be enough revenues or spending to make the U.S. safe, and the Ted Kennedy’s for whom there can never be enough revenues or spending to elevate every child, man and woman, and senior citizen to the level of prosperity and dignity called for in the American ideals, have to be removed from office.
When they are sent packing by voters for whom debt and deficits and DO Matter, then the politicians who replace them will observe that reelection depends on working off the debt and avoiding deficits except in times of true national emergencies threatening the survival of our nation.
d.a.n said: “True, but I certainly hope you are not condoning taking half of the wealthiest Americans income just because they can afford it?”
Do we not amputate a gangrenous leg to save a patient’s life? Is the U.S. future survival not threatened by our growth in debt and service on that debt?
I am condoning increasing taxes on those whose lifestyles will not be altered significantly by an increase in taxes as a means of raising additional revenues to pay of our debt and eliminate our deficits. Of course, I also condone cutting every single dollar of tax spending that is not essential to improving our nation’s future economic condition. Doing both can go a very long way toward undoing the damage to our future economy by the tax cutters and big spenders in D.C.
Posted by: David R. Remer at October 21, 2008 01:02 AMCraig said: “And wow has that gotten worse since the Democrats took over congress. At some point the Democratic Congress must be held accoutable.”
Yeah, that’s quite a pickle the GOP created for themselves. As long as the economic and financial crisis of the Republican government are plaguing Democrats in power, the Democrats get a free pass. Funny how that works. GOP shouldn’t have created this mess in the first place.
Democrats will not be held accountable for Republican voodoonomics when current threats to the economy still exist as carryover from Republican rule. When these threats have been put behind us, OR, there is no more Republican obstructionism taking place by Senate filibuster or presidential veto, then Democrats will have lost all cover of Republican blame and will themselves be held accountable for the economy going forward.
Posted by: David R. Remer at October 21, 2008 01:07 AM
David
“You aren’t really suggesting voluntary support of the federal government, are you? What a laugh!”
It is not the federal govts job to provide healthcare, so no, I am not suggesting voluntary support of federal govt, just support of the Constitution.
Max
The point of this post is “opportunity cost” and David outlines his doom and gloom views of our debt and what he believes will happen if we dare cut spending and don’t raise taxes. The Obama’s freebie promises will greatly add to that debt and magnify our debt problem.
IMO, we do not have to lessen our freedoms even further in order to deal with this problem.
Our federal govt is responsible for providing for our military, it is not responsible for living our lives for us.
David:
All of us understand basic arithmatic. What I am stating is there is no evidence that I can see from world economics that raising taxes has much to do with cutting federal deficits. If that were the case Europe would have zero debt.
I think it is fool hearty to advocate raising taxes until the spending issue has been dealt with and is signed into law.
History is pretty clear. Raising taxes = increased spending. I will offer Europe of my first example.
Posted by: Craig Holmes at October 21, 2008 10:43 AMDavid R. Remer wrote:Bad example.Do we not amputate a gangrenous leg to save a patient’s life?
- d.a.n said: “True, but I certainly hope you are not condoning taking half of the wealthiest Americans income just because they can afford it?”
Very bad example.
Some could interpret that to mean that the wealthy are like a rotting, gangranous leg that must be amputated (or punished).
Not all ends justify the means, and especially not when the desired ends will still not be accomplished by the means recommended.
David R. Remer wrote:Yes. But that does NOT justify taxing one group a higher percentage of their growss income more than another group.Is the U.S. future survival not threatened by our growth in debt and service on that debt?
- d.a.n said: “True, but I certainly hope you are not condoning taking half of the wealthiest Americans income just because they can afford it?”
We already have that problem now (i.e. the current tax system is regressive and unfair).
David R. Remer wrote: I am condoning increasing taxes on those whose lifestyles will not be altered significantly by an increase in taxes as a means of raising additional revenues to pay of our debt and eliminate our deficits.That depends on what you mean by raising taxes.
I can never go along with that if that means imposing higher tax percentages (on gross income of all types) on some groups of people more than other groups of people.
If you are condoning higher tax percentages (on gross income of all types) on the wealthy, merely because they can afford it, then I find that as disturbing as the unfair and regressive tax system we already have now.
Also, I don’t see the logic in taxing anyone’s gross income that is already at or below the poverty level, which pushes people into poverty and possibly onto welfare, creating more losses, bureaucracy, and waste.
The fairest thing (and most Americans polled agree) is that we should all pay an EQUAL percentage on our gross income (on all types of income).
Taxing the poor a higher percentage than the rich is unfair. Right?
So how is taxing the rich a higher percentage than the poor fairer?
All of the incessant, non-stop bickering about taxes would diminish if the progressive and regressive tax proponents would compromise on a fairer neutral (flat) tax, which most Americans feel is most fair.
David R. Remer wrote: Of course, I also condone cutting every single dollar of tax spending that is not essential to improving our nation’s future economic condition. Doing both can go a very long way toward undoing the damage to our future economy by the tax cutters and big spenders in D.C.That’s right.
We are not going to solve our problems by taxation alone.
The tax system should be made fairer.
If 17.7% in total federal taxes is OK with Warren Buffet, it should be the same for ALL Americans (such as this).
But massive spending cuts are necessary too, and spending cuts are the true source of huge cuts in the deficits and national debt.
However, I don’t think the debt will ever start to decrease in an orderly fashion.
I believe the debt-pyramid is now too far out-of-control, and there will be considerable pain and misery as consequences of so much debt grows year after year.
The National Debt is over $10.3 Trillion, and that doesn’t include the $12.8 Trillion borrowed from Social Security, leaving it pay-as-you-go, with a 77 million baby-boomer bubble approaching (13,175 new entitlement recipients per day).
The federal government and Federal Reserve will continue to do as I’ve predicted.
They will grow the debt pyramid ever larger, by creating more money out of thin air.
As predicted, they will resort to creating more money out of thin air and start giving it away.
Already, another economic stimulus plan is being comtemplated, even though the 1st one had very little impact.
Also, the federal government has been deficit spending since year 1957.
And the federal government has been deficit spending BIG TIME since year 2002.
YEAR _______ National Debt ________ Increase per year _____ Increase per day
9/25/2008 ; $9,790,496,000,000.00 ; $782,842,600,000.00 ; $2,144,774,322.57
9/30/2007 ; $9,007,653,372,262.48 ; $500,679,473,047.25 ; $1,370,785,689.38
9/30/2006 ; $8,506,973,899,215.23 ; $574,264,237,491.73 ; $1,572,249,794.64
9/30/2005 ; $7,932,709,661,723.50 ; $553,656,965,393.18 ; $1,515,830,158.50
9/30/2004 ; $7,379,052,696,330.32 ; $595,821,633,586.70 ; $1,631,270,728.51
9/30/2003 ; $6,783,231,062,743.62 ; $554,995,097,146.46 ; $1,519,493,763.58
9/30/2002 ; $6,228,235,965,597.16 ; $420,772,553,397.10 ; $1,152,012,466.52
9/30/2001 ; $5,807,463,412,200.06 ; $133,285,202,313.20 ; $364,914,996.07
… … … … … … … … … … . .
6/30/1960 ; $286,330,760,848.37 ; $1,624,853,770.15 ; $4,448,607.17
6/30/1959 ; $284,705,907,078.22 ; $8,362,689,332.41 ; $22,895,795.57
6/30/1958 ; $276,343,217,745.81 ; $5,816,045,849.38 ; $15,923,465.71
6/30/1957 ; $270,527,171,896.43 ; -$2,223,641,752.89 ; -$6,087,999.32
I think it is now too late for an orderly retirement to this much debt.
It isn’t going to go away without significant problems, pain, and misery.
Things are bad, and will be bad for many years to come, but if the rampant money-printing continues, it will be much worse, because:
- (1) It will destroy savings, retirements, entitlements, and incomes
- (2) It will destabilize all sectors of the economy because the currency will be worthless, and only some foreign currencies will be accepted;
- (3) It will lead to massive unemployment, because incomes will become increasingly worthless due to rampant inflation (which is already really 15.6% by pre-1983 inflation measurement methods).
- (4) Oil, currently traded in U.S. Dollars, will make it more and more difficult to buy oil if we continue to erode the value of the dollar, which has already been plummeting (one-simple-idea.com/USD_Falling.htm) for years.
- (5) Many more foreclosures (one-simple-idea.com/DisparityTrend.htm#Foreclosures) will grow worse than they already are, which are already at all time record levels. Homelessness will increase, and tent cities and shacks will pop-up in every city in America.
- (6) More of the nations 8000+ banks will fail (much worse than the few hundreds banks failing today).
- (7) Crime will increase.
- (8) Government corruption (at all levels) will increase.
A recession (and perhaps a depression) is unavoidable now.
The biggest danger we face now is making it worse with massive economic instability that will result by crashing the U.S. currency.
And that appears to be exactly what the federal government and Federal Reserve are doing, because they don’t see any other choice available to them, and Congress can’t control spending.
The federal government and Federal Reserve are already borrowing and printing the money to merely pay the $429 Billion of interest on the $10.4 Trillion National Debt.
The problem is already out of control.
Remember when you said there is a point where the debt will become so large that it can not be stopped from rapidly exploding out-of-control?
We have reached that point, and it is now obvious.
The federal government and Federal Reserve can only delay the now-inevitable collapse with more massive debt, borrowing, money-printing, stimulus checks, bail-outs, pork-barrel and spending.
Already, $1 U.S. Dollar by pre-1983 inflation measurement method has decreased in value to 42 cents since year 2000.
The two candidates telling us how they will give us tax cuts, health care, jobs, and a number of other promises is truly ridiculous.
The debt pyramid is approaching a collapse.
That can be said that with considerable certainty, based on the mathematics of any pyramid scheme (the ever increasing percentage of nation-wide debt-to-GDP), and the cycle of fiscal, and moral bankruptcy:
- ,-(1) Corruption, oppression,
- | (2) courage, Responsibility, outrage, civil unrest,
- | (3) liberty, growth, abundance,
- | (4) selfishness, complacency, fiscal irresponsibility
- | (5) apathy, dependency, fiscal & moral bankruptcy,
- ` - - return to step (1)
After all, for over a year (or more), no one has yet been able to answer one simple question, which demonstrates the likelihood of the Dollar crashing:
- Where will the money come from to merely pay the INTEREST on $54-to-$67 Trillion of nation-wide debt (One-Simple-Idea.com/DisparityTrend.htm#NationWideDebt) , much less the money to reduce the current PRINCIPAL debt of $54-to-$67 Trillion , when that money does not already exist? Especially when now, 80% of the U.S. population owns only 17% (or less) of all wealth (One-Simple-Idea.com/DisparityTrend.htm#WealthDistribution), and 1% of the wealthiest owns 40% of all wealth (up by 20% from 20% in year 1976); a wealth disparity gap that has never been worse since the Great Depression (and the gap is widening);
Posted by: d.a.n at October 21, 2008 10:45 AM
Eisenhower had higher tax rates and Kennedy lowered them in a slow time and the country and government did well as a whole ,and if we could get our government to reduce waste abuse and fraud and contain itself from reckless deficit spending on both sides of the aisle it sounds -sound to me David, and i also like d.a.n.’s flat tax and could we apply the same theory.
Posted by: Rodney Brown at October 21, 2008 11:43 AMkctim said: “
You don’t appear to know your Constitution. May I suggest you ponder these words in the Constitution: “promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity”
Notice it doesn’t say either, or, but both together. There is no posterity with 47 million Americans uninsured and 4.7 million of those driving up taxes for everyone else via Emergency Room health care. General welfare means ‘for the good of all’.
Your comment invokes the Constitution apparently without 1) recalling these superordinate words that begin it, and 2) without having considered their meaning.
Unfortunately, this is true of a majority of Americans, today. Is it any wonder voters can’t hold their politicians responsible to the Constitution?
Posted by: David R. Remer at October 21, 2008 12:41 PMd.a.n said in reply to my comment: “Do we not amputate a gangrenous leg to save a patient’s life?”
Bad example. Very bad example. Some could interpret that to mean that the wealthy are like a rotting, gangranous leg that must be amputated (or punished).
Every example is a bad example that doesn’t make the reader’s point. Actually, it is an excellent example. A half billion in compensation for ruining a financial corporation so large as to threaten the nation’s economy fits the analogy of a gangrenous leg, to a Tee as far as I can see. Lehman, one leg. Bear Stearns, another leg. AIG an arm, CountryWide, another arm. And so on.
Do you have any idea how much health care could be provided, or how much return on investment to shareholders these kinds of compensation packages represent? I do not believe that their aren’t better capable persons waiting in the wings to take these CEO and executive positions at 1/20th the cost. What this has become is a bidding war for reputation and fame, instead of competitive compensation for education, experience, and talent. We have ample education, experience, and talent available and willing to run our corporations at radically lower compensation.
Proportionality is word that has been discarded from Wall Street and Board Rooms of corporations. It is a word that needs to be, and will be reinstated by the U.S. Government going forward, and about damn time, too!
Rodney, the flat tax is something we do agree on entirely. It is the fairest of them all.
Posted by: David R. Remer at October 21, 2008 12:53 PMCraig said: “there is no evidence that I can see from world economics that raising taxes has much to do with cutting federal deficits.”
I am not surprised, Craig. But, that lack of evidence today is NOT causal, but consequential. Take a look at the following from page 62 of this source.
This international trend toward carrying ever higher deficits is a direct result of the maturation of democratic elections and democracies, in which, politicians secure their reelections with deficit spending even during tremendous international economic growth periods like the 1980’s.
There is no rule or law of human nature that demands that this be true. The simple fact is, as economics became more complex, the voters became less aware and involved in voting on the basis of sound economic policy, such as raising taxes during economic growth periods to pay down debt. Take note of the graph on page 62, for 1960 in the graph. These nations through to this time, made it nearly a universal prescription to raise tax revenues to pay off war debt of preceding periods, resulting in balanced budgets.
There is no impediment to returning to that standard, save the ignorance of voters to their responsibility to hold their politicians responsible on election day for deficits and debt.
Posted by: David R. Remer at October 21, 2008 01:18 PMRemer writes about me; “Absurdities never cease to be found in your comments. I appreciate your candor however in revealing that you don’t believe we should pay as we go for what we spend. I know this because you oppose taxes, which are the only means of supporting a national military, NASA, interstate infrastructure, etc. You would make taxes voluntary. Why, so you could get free what others voluntarily pay to support?
Once again Remer feels free to lie about not only my memories of military service in NYC but now about my position on taxes and spending. I speak of neighbor helping neighbor and he construes that as being against taxes. How silly.
Then Remer reveals his ideology of a Soviet-Style “ism” by saying; I would be for a law that says any American citizen with assets over 25 million dollars may not extract more than half of their assets to a foreign residence under penalty of forfeiture to the US tax payers.”
I am reminded of the Iron Curtain which contained enslaved peoples from escape. Remer advocates an economic Iron Curtain to enslave the wealth of those considered by him to have to much. Is this what Obama advocates; or just the writing of one who would have his envy enforced by government?
Here’s another revelation by Remer; “No citizen, regardless of wealth (insert poverty), can be permitted to sabotage the nation for their personal preferences. There are rights insured by our Constitution, but, that is not one of them.”
I ask, would Remer support his statement if the word “wealth” was replaced by the word “poverty”?
Posted by: Jim M at October 21, 2008 01:27 PMJim M, the ignorance contained in your comment which equates social policy like our military with Communism only serves to prove my my comments valid. Thank you.
Posted by: David R. Remer at October 21, 2008 01:29 PMDavid R Remer,
As usual, you speak very well. You put together a sound argument and also voiced your opinion in a magnificent way. I feel you always have your critics and I am not always on your side. I think a revamp is in order, whether or not your ideology should be adopted for an uneducated nation is another thing. You speak too well to allow for the average person to understand where this is coming from and where it would be going. People are not taught to think outside of the box. We are all graded on how well we recite the history books, not how we disagree with past actions.
As for Jim M, we do not live in Soviet Russia, our people will never be Soviets. You are making outlandish comparisons because you cannot keep your emotions in check. Make claims devoid of your personal frustrations so we can see what point you are trying to make, I was in the military too, the only reason you are so keen on the system, is due to the direct benefit a Republican made to your bank account. When a Republican gets into office all the military gets a pay increase. This doesn’t happen for most Americans, and, “Here’s another revelation by Remer; ‘No citizen, regardless of wealth (insert poverty), can be permitted to sabotage the nation for their personal preferences. There are rights insured by our Constitution, but, that is not one of them.’I ask, would Remer support his statement if the word “wealth” was replaced by the word “poverty”?”, this is just ignorant. The “poor” outnumber the “wealthy” and with this being a democracy we live in. Yeah, their votes count too, so if they want to band together to get ahead, they can. How can one impoverished person make a difference in the political sphere? They can’t. If they could things would have changed already. I think your rationale is absolutely ridiculous. I didn’t think I would go against a military person on their views of Freedom, but I can see you have lost sight of what it means to be free. 1 person, one vote. Not, “I am wealthy and have money, so I think I will hire a lobbyist to change government spending in order to save/gain more money for myself.” Yeah, I think that policy has been tried and it seems to benefit private interests instead of public interests. Or were you trying to support something else?
Posted by: chad at October 21, 2008 01:51 PMCraig, one last note, the act of applying increased taxes to lowering a deficit or debt, is EXACTLY the same act as electing to curtail spending. Both are acts of political will. There is no impediment to doing either, except political will. It is a fundamental flaw in our implementation of democracy in the world that fails to inform and educate the voting public to hold their politicians accountable for such omissions of political will.
Posted by: David R. Remer at October 21, 2008 01:53 PMDavid R. Remer wrote: Do we not amputate a gangrenous leg to save a patient’s life?David,Every example is a bad example that doesn’t make the reader’s point. Actually, it is an excellent example. A half billion in compensation for ruining a financial corporation so large as to threaten the nation’s economy fits the analogy of a gangrenous leg, to a Tee as far as I can see. Lehman, one leg. Bear Stearns, another leg. AIG an arm, CountryWide, another arm. And so on.
- d.a.n wrote: Bad example. Very bad example. Some could interpret that to mean that the wealthy are like a rotting, gangranous leg that must be amputated (or punished).
That sounds like someone lookin’ to punish the wealthy.
Honestly, I’d like to also.
However, the lawbreakers are who should be punished, and there are lots of those.
Not merely anyone who is wealthy.
Also, remember that wealthy people are no better and no worse than persons of less wealth, because many people of less wealth, if put in the shoes of the wealthy, will do the same thing.
The problem is lawlessness, and the majority of voters, most of which are NOT wealthy, who are also culpable too for foolishly empowering those that abuse weatlh.
The largest portion of the voters largely have themselves to thank for the abuses of the wealthy, because too many voters:
- (1) Too many voters elect the politician that spends the most money (90% of the time; which is usually the incumbent politician).
- (2) Too many voters repeatedly reward Congress with 85%-to-90% re-election rates.
- (3) 99.7% of all 200 million eligible voters are severely out-spent by a very tiny 0.3% of the wealthiest voters who make 83% of all federal campaign donations of $200 or more, but too many voters still repeatedly reward Congress with 85%-to-90% re-election rates;
- (4) The wealthy not only enjoy a tax system that is regressive, but receive massive subsidies.
For example, for only one state:- Consider these top 10 subsidy programs for one state (e.g. Texas) 1995-2006:
- Rank ____ Subsidy ___________ Recipients _____ Total
- 01 __ Cotton Subsidies _______ 96,628 ______ $6,126,931,257
- 02 __ Disaster Payments _____ 144,923 ______ $2,410,774,724
- 03 __ Conservation Reserve ___ 37,769 ______ $1,759,118,624
- 04 __ Rice Subsidies __________ 5,619 ______ $1,325,261,031
- 05 __ Wheat Subsidies _______ 95,337 ______ $1,291,098,137
- 06 __ Corn Subsidies _________ 59,302 ______ $1,213,424,428
- 07 __ Peanut Subsidies _______ 11,680 ______ $491,103,948
- 08 __ Livestock Subsidies _____ 84,430 ______ $456,298,603
- 09 __ Dairy Program Subsidies ___ 2,586 ______ $92,836,865
- 10 __ Env. Quality Incentive ___ 12,036 ______ $80,298,602
… but too many voters continue to repeatedly reward Congress with 85%-to-90% re-election rates. - Consider these top 10 subsidy programs for one state (e.g. Texas) 1995-2006:
The wealthy definitely get more than their fair share (regressive taxes, subsidies, pork-barrel, entitlements, etc.), and also have an unfair influence and control of the government.
However, the voters only have themselves to thank for much of this, because they have the mechanism right under their very own noses to help stop the abuses.
Simply stop repeatedly rewarding corrupt politicians with perpetual re-election.
The point is, you can’t blame it all on the wealthy only.
The majority of voters must learn to stop rewarding plutocracy and kleptocracy with perpetual re-election.
The point is, wealth is Power.
Power Corrupts.
And absolute Power Corrupts absolutely.
And it is up to the majority of voters to stop it, and that most certainly ain’t gonna ever happen by repeatedly rewarding bad politicians (puppets of their wealthy puppeteers) with perpetual re-election.
Everyone is runnin’ around looking for someone else to blame and punish, when there’s plenty of blame to spread around.
The voters are culpable too.
What do the voters expect when they repeatedly reward THEIR politicians for all of it, over and over, with perpetual re-election?
So, wanting to punish the wealthy with higher tax percentages is not the solution, but a perpetuation of injustice.
I take an unusual and unpopular position that few others will.
I hold the voters responsible too.
In a voting nation, an educated electorate is paramount.
Voters have a choice on how they want to get their education.
And if voters are dumb enough to continually reward corrupt politicians with perpetual re-election, then they only have themselves to thank for it.
Who is it that is funneling massive wealth, subsidies, pork-barrel, tax deductions, and tax loop-holes to the wealthy?
It is Congress and your other elected officials.
So why rail against Congress, give it 9% approval ratings, and complain endless about government corruption, and then repeatedly reward them with 85%-to-90% re-election rates.
Seems to me, the problem isn’t only the politicians or the wealthy.
Seems to me, most voters must like it that way, since the voters repeatedly reward THEIR politicians with 85%-to-90% re-election rates.
Seems to me, the voters have only themselves to thank for it.
It’s up to the majority of voters, and things will continue to deteriorate until enough voters finally reject their delusional partisan loyalties rooted in laziness and selfishness, stop the fleecing of America, and stop empowering THEIR politicians, who are actually their tormentors, with perpetual re-election.
So, if voters want to hold someone accountable, and want the abuse of wealth to stop, the solution is not to soak the rich with progressive taxes.
The solution is to punish anyone (regardless of wealth) that has broken laws, and vote out candidates that are FOR-SALE, and demand campaign finance reforms to eliminate government FOR-SALE.
But again, that ain’t gonna ever happen by repeatedly rewarding bad politicians (puppets of their wealthy puppeteers) with perpetual re-election.
David R. Remer wrote: Do we not amputate a gangrenous leg to save a patient’s life?David, So why were you for the bail-outs to save these corrupt banks and corporations (e.g. BILL H.R. 1424)?Every example is a bad example that doesn’t make the reader’s point. Actually, it is an excellent example. A half billion in compensation for ruining a financial corporation so large as to threaten the nation’s economy fits the analogy of a gangrenous leg, to a Tee as far as I can see. Lehman, one leg. Bear Stearns, another leg. AIG an arm, CountryWide, another arm. And so on.
- d.a.n wrote: Bad example. Very bad example. Some could interpret that to mean that the wealthy are like a rotting, gangranous leg that must be amputated (or punished).
Surely you knew the bail-outs would be abused and the greed would continue to flourish (e.g. AIG)?
These bail-outs are only going to grow the massive debt-pyramid larger, and risk the collapse of the currency sooner than later.
These bail-outs are mostly taking care of the wealthy who influence and control a government that is FOR-SALE (www.propublica.org/special/government-bailouts/).
See how many bail-outs we’ve had since 1932.
This many and such large bail-outs is unprecedented (more in number and size in year 2008 than all years before since 1932):
There are so many bail-outs, some were probably missed.
But look at the number of bail-outs today compared to the number before year 2001.
The numbers are growing, as the debt pyramid grows ever larger.
These banks and insurance companies were only a few hundred of over 8000+ banks.
We should have let those banks fail, and the FDIC only cover the accounts to the insured amounts.
Now they have made the problem much worse.
And it will probalby get much worse yet, with many more bail-outs, and more inflation because of it.
David R. Remer wrote: It is a word that needs to be, and will be reinstated by the U.S. Government going forward, and about damn time, too!Proportionality reinstated by “the government”?
Not likely.
Not based on track record.
Not until enough voters force THEIR politicians to be more responsible and accountable.
Real reforms are not on the horizon yet.
Real reforms can only be accomplished when enough voters, or something else, reforms and/or replaces the current corrupt politicians in Congress, state, and local governments.
This economic melt-down is not even close to being over.
It has only been delayed, and that delay has made it worse.
Another credit-crunch panic will start all over again in 6-to-12 months (if not sooner).
Why?
Because money-printing and borrowing can work forever.
Because the debt-pyramid not only still exists, but is now much larger, and still growing fast every second (with more interest too than ever before).
Because the federal government is already borrowing and printing the money to merely pay the interest on the National Debt.
Because foreclosures (10,000 per day) are still occurring.
Because inflation is bad and getting worse.
Because the principles of math still apply, and massive debt can not be solve with more debt, borrowing, money-printing, pork-barrel, and spending.
Because the monetary system is still mathematically doomed, as are all pyramid schemes.
Because the 10 major abuses (One-Simple-Idea.com/DisparityTrend.htm) hammering most Americans have still not been addressed.
Because enough voters still have not figured it out.
Much wealth has been lost, and much more will be lost in the next 6-to-12 months (if not sooner).
The National Debt, already at nightmare proportions, is now to hellish proportions.
Yet, it’s going to get much worse too.
And regardless of who the next president is (with all of their grandiose promises), neither is serious about not growing the federal debt larger, rampant borrowing, money-printing, pork-barrel and spending.
It’s not going to happen until the problem solves itself the hard and painful way, when the U.S. is completely bankrupt and the U.S. currency is completely worthless.
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
Posted by: d.a.n at October 21, 2008 02:25 PMDavid:
Craig, one last note, the act of applying increased taxes to lowering a deficit or debt, is EXACTLY the same act as electing to curtail spending.
Except, raising taxes lowers the growth of GDP over time, thus lowering the increase in future tax revenues. As per my example of Europe. Because they have a higher tax rate, they have a lower growth rate in GDP. Over longer periods of time this reduces future tax revenues.
I am not talking about the crap from the right who are looking short term. I am saying that long term economies with lower government expenses grow faster, and thus their tax revenue growth is on the same course overtime.
For instance is you look at our economy. We have reduced marginal tax rates many times but have maintained tax revenues at about 20% of GDP. (actually a bit lower). Our economy has by far outstripped European economies. So our tax reveues have grown much faster and we have been able to remove the bottom 40% of taxpayers off our Income Tax rolls. (Not our payroll taxes).
If we raise taxes to close the gap, short term you are right, but long term you are wrong. Long term, budget cuts to reduce the deficit are superior because they (long term) promote GDP growth.
I fully understand that short term, federal expenses (like unemployment benefits etc) stimulate the economy.
Craig said: “Except, raising taxes lowers the growth of GDP over time”
Wrong! That is only true if economic activity expansion is being held back by factors other than contracting consumption.
You have to move away from these blanket universal notions. There are times when raising taxes DOES NOT impede economic growth. If business is having difficulty raising capital to fund expansion warranted by demand outstripping supply, THEN raising taxes would slow economic growth.
Posted by: David R. Remer at October 21, 2008 03:46 PMd.a.n said: “That sounds like someone lookin’ to punish the wealthy. Honestly, I’d like to also.”
It is about the nation extracting resources where it can to save its future. Nothing more, nothing less. If raising taxes will slow the growth of debt, or lower the deficits, raising taxes on those in poverty is an exercise in futility.
Currently, going forward, slow economic growth will be the result of increased savings and lack of consumer demand. Which means, raising taxes on the wealthiest is the only source for revenues that won’t negatively effect the economy and the deficits and debt for that period of constricted economic growth.
It is purely pragmatic. Has nothing to do with wealth envy or demands for retribution, unless of course, crimes were committed or fiduciary duties breached. But, that’s a whole other thing called justice, not managing economic resources.
Posted by: David R. Remer at October 21, 2008 03:51 PMd.a.n, it is blatantly clear that subsidies must be cut back. But, with a scalpel, not a hatchet, to use Obama’s words. Cutting subsidies to the dairy industry must be done in increments or we face shortages and price inflation. Cutting subsidies to the Oil corporations can be done in one fell swoop without negative impact. In fact, that would induce more oil production on available leases to make up the loss in subsidies through increasing scale of revenues, as OPEC cuts back in an attempt to boost prices.
We have to be selective and smart about these. And as much as I loathe a one party government again, this kind of pragmatic scalpel approach can only be undertaken by a one party government. Opportunity costs abound in the options before us.
Posted by: David R. Remer at October 21, 2008 03:57 PMDavid:
Show me economies with higher tax rates that over a long period of time have higher GDP growth rates.
Your statement that tax increases or spending cuts are identical in their effect just isn’t true, because world economics show that all else being equal, countries with lower government expenses and lower tax rates grow faster than the reverse.
What is also true is that spending increases lower the standard deviation of the economy making for a smoother ride.
Posted by: Craig Holmes at October 21, 2008 04:06 PMkctim said: “
You don’t appear to know your Constitution. May I suggest you ponder these words in the Constitution: “promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity”
Um, no I didn’t David. But I am all ears if you want to explain why it says promote, rather than provide.
David:
Currently, going forward, slow economic growth will be the result of increased savings and lack of consumer demand. Which means, raising taxes on the wealthiest is the only source for revenues that won’t negatively effect the economy and the deficits and debt for that period of constricted economic growth.
So if I am a wealthy American who listens to your ideas (which I partly buy into by the way) and decide to form a company that is going to export goods to others around the world, you are saying that increasing my taxes will not effect my business?
I appreciate slow growth while we transition from consumer driven to more traditional export lead economy. I don’t accept your premise of a long term lower growth rates on GDP. Unless there is a large increase in government taxation.
Posted by: Craig Holmes at October 21, 2008 05:11 PMDavid R. Remer wrote: d.a.n, it is blatantly clear that subsidies must be cut back. But, with a scalpel, not a hatchet, to use Obama’s words.Either way, the fiscal situation is serious, and spending needs to be cut drastically NOW, and a LOT of waste needs to be eliminated NOW. We don’t have the luxury of taking years to do it. There’s so much bloat and waste that can be elimiated, it’s ridiculous, and a hatchet may be exactly what is needed.
When I hear this “scalpel” stuff, it sounds like code words for “we won’t really cut much spending”.
After 51 years of deficit spending, why should anyone believe Obama’s or McCain’s or any Congress persons empty promises to cut spending.
Government subsidies, pork-barrel, and incessant meddling in everything under the sun is economic destabilizing.
David R. Remer wrote: Cutting subsidies to the dairy industry must be done in increments or we face shortages and price inflation.Good. It’s time we see what something REALLY costs.
Who knows … without incessant government meddling, some things may actually become more affordable.
For example, it is quite likely that Medicare has contributed to the declining affordability of healthcare.
Massive, incessant government meddling is why so many things are so screwed up.
The dishonest, inflationary monetary system is a good example of that.
As it is now, we don’t know what anything REALLY costs, because of government subsidies, pork-barrel, waste, etc., etc., etc.
It’s a huge, severely bloated mess of nightmare proportions.
David R. Remer wrote: Cutting subsidies to the Oil corporations can be done in one fell swoop without negative impact. In fact, that would induce more oil production on available leases to make up the loss in subsidies through increasing scale of revenues, as OPEC cuts back in an attempt to boost prices.That’s right. End those subsidies immediately.
There are really very few subsidies (if any) that are needed.
Besides, there’s NO money.
David R. Remer wrote: We have to be selective and smart about these.I agree. And if it is done in a smart way, there will be VERY few (if any) corporations getting tax-payer funded subsidies.
This is an emergency, and massive government spending cuts are needed now.
All unnecessary spending must be stopped ASAP, or a very ugly economic melt-down is not far off.
These bail-outs have only bought a few months.
If the next Congress and Executive Branch doesn’t get some fiscal responsibility very soon, it won’t matter in a few years from now.
David R. Remer wrote: And as much as I loathe a one party government again, this kind of pragmatic scalpel approach can only be undertaken by a one party government.It is very unlikely that the Democrats will cut spending either, and there’s no history of balanced budgets since year 1957 by either party, and the Democrats had a huge majority of Congress between 1950 and 1994.
David R. Remer wrote: Opportunity costs abound in the options before us.We’re at a cross roads, and I think Americans are delusional if they think rewarding the Democrat party with re-election will make them as corrupt as any IN-PARTY can be.
If the voters fail (which they probably will) to send a loud and clear message to incumbent politicians in BOTH parties, there will be no fiscal responsibility.
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
d.a.n, you are right. We are at a cross road. But, there are no other players to be found but the Democratic Party for the voters to coerce into doing what is right for the country, and our children’s future.
I wish there were a viable Independent Party that could be elected to replace Dems and Reps, and make the intelligent empirically based decisions that need to be made come January. But, we that simply isn’t in the cards this election.
Which means, giving Democrats the unobstructed (no excuses) power they need to act responsibly, and demand they do so, and punish them mercilessly in 2010, if they don’t.
There are no other options for voters at this juncture in time. It would however, behoove Independent voters to get their CaCa together between now and 2010 and stand ready to replace more than 60% of Democrats with Independents.
The only other alternative is to let the nation fail and rebuild from the ashes of another civil or revolutionary war. That is not an alternative one would choose in their right mind.
Posted by: David R. Remer at October 21, 2008 09:29 PMCraig said: “So if I am a wealthy American who listens to your ideas (which I partly buy into by the way) and decide to form a company that is going to export goods to others around the world, you are saying that increasing my taxes will not effect my business?”
Right. The reason being that investors in export businesses will be readily found, if the global economy is capable of sustaining growth in our exports, will not be a problem going forward after the credit and capital is unfrozen by current measures to offload debilitating or toxic securitized assets from capital lending balance sheets.
I know of no very wealthy person who ever started up a corporation out of their own investment funds solely, or wholly. That would be stupid, in the extreme. The whole concept of diversification of risk is what the stock markets and capitalization are all about. One company founded by one person’s life savings, is a strategy for small businesses and mom & pop operations, not large capital export corporations.
And let’s be clear, no one is proposing gargantuan tax increases on the upper 5% of the wealthiest. The proposal is to allow their tax rates to return to the levels they were at in the year 2000.
Republicans depiction of allowing the Bush tax cuts on capital gains and wealthy income earners as the founding of a new socialism in America is absurd a priori.
And if, in 2004 or beyond, we find that a contraction in capital is stifling economic activity, those capital gains and wealthy taxes should be lowered again, to free up capital formation. Tax policy should be about the dual goals of paying as we go for government operations and services, and stabilization and amelioration the troughs and peaks of cyclical trends in consumer capacity and capital formation and expansion, in that order with few exceptions (recession and bubbles).
This mortgage bubble was evident to the powers that be and myself as I wrote, in 2006. The time to act and counter it and minimize its impact upon bursting was early 2007. But, our political climate was such that this was made impossible. And the voters must share the blame with the politicians for that political climate, when history is writ.
Posted by: David R. Remer at October 21, 2008 09:46 PMkctim, pedantic semantics is not going to further your position. I refer you to the synonyms of both words and their crossover and interchangability in meanings. To provide for, can and does mean essentially the same as enhance and promote.
There is no liberty to be found in poverty created by bad governance and poor economic management, outside of the control of the citizenry. Securing the blessings of liberty is to promote and provide for the infrastructure necesary to that liberty. To promote the general welfare has the same meaning, to provide for the infrastructure which permits industry and gainful employment at a dignified living income wage for those who seek it and are capable of seeking it.
Elevating the national debt to 12 trillion dollars from 5.65 trillion in 8 years is not promoting the general welfare for posterity. Republicans are responsible for this vicious blow upon future tax payers, and undermining of their ability to keep more of what they earn than their parents did. Republicans single handedly insured our children will pay much more in taxes than their parents had to.
Posted by: David R. Remer at October 21, 2008 09:58 PMDavid R. Remer wrote: But, there are no other players to be found but the Democratic Party for the voters to coerce into doing what is right for the country, and our children’s future.That faith in incubment Democrat politicians to do what is right for the country will prove to be misplaced.
The fleecing of most Americans will continue with a majority of incumbents still in Congress (regardless of party).
The best thing to do now is oust the most incumbent politicians possible (from both parties).
David R. Remer wrote: Which means, giving Democrats the unobstructed (no excuses) power they need to act responsibly, …Unobstructed?
Sounds dangerous.
Act responsibly?
It won’t happen.
Now, as always, is the time to oust corrupt and irresponsible politicians.
Remember one of the lessons learned from World War II. Appeasement doesn’t work, and repeatedly rewarding irresponsible incumbent politicians in Congress with perpetual re-election certainly won’t work either.
David R. Remer wrote: … and punish them mercilessly in 2010, if they don’t.Might as well start now.
Things will be much worse by 2010.
The fleecing of most Americans will continue.
And why shouldn’t it, when incumbent politicians are repeatedly rewared fro it?
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
d.a.n said: “That faith in incubment Democrat politicians to do what is right for the country will prove to be misplaced. “
Probably true. But, where is the option for voters? Inaction, NOT VOTING, accomplishes nothing, and leaves Democrats and Republicans struggling with each other for power instead of with the problems facing the nation. A one party government has at least the ability to put forth its own solutions, some great, some good, some poor, and some destructive. Some problems will be addressed satisfactorily.
What is needed is a viable competitor party with a simple agenda, economy, health care, and political - lobbyist reform. Nothing more, nothing less. Where is it?
A potential VOID supporter once said to me, very wisely, that it is not enough to give voters something to vote against, they demand something to voter for. Voting out incumbents is absolutely necessary to open the door for a more responsible and leadership to emerge backed by VOID support which will hold it accountable. What is lacking is the vision of where that more responsible leadership will come from.
Posted by: David R. Remer at October 22, 2008 10:31 AMOk David, you re-interpet promote to now mean provide in order to agree with your agenda. Thats a regular thing to do to our Constitution in this quest for some kind of socialist utopia.
So you believe your liberty is dependent on your view of good governance and economic management? Thats really sad, David.
Liberty is “being free from restriction or control.” Its “having the power to act, believe, or express oneself in a manner of one’s own choosing.” Its having “freedom from unjust or undue governmental control.”
You don’t secure the “blessings of liberty” by limiting liberty and you don’t strip away liberty for some in order to create an infrastructure to “promote the general welfare” of others. You don’t do either of those things unless you falsely believe liberty is dependent on money.
Liberty is everything Obama is against.
And how about our debt? You rightfully complain how out of control it is, but yet you are going to vote for somebody who will only increase the size of it and of the govt which created it? Thats like complaining about nobody helping the poor while your personal chef serves you surf and turf seven days a week.
If one really wants a “viable competitor party,” they would stand up for what they believe in, not against what they believe may be or fear.
Posted by: kctim at October 22, 2008 11:42 AMDistribution of wealth? Upper managers taking home obscene parachutes. Do I object? Most emphatically I do. On what grounds you might say? If we were playing on a level field I might not object. BUT, as long as our government operates as an oligarchy/corpocracy I will object. As long as Corporate Personhood and Money is Free Speech exist in law I will object. As long as corporations can buy their next loophole while I, as an individual, have no redress, other than a lonely, single vote, I will object. As long as the billionaires wealth is taxed differently than mine. I could crash this server with wrongs that lead me to object. How anyone could think that we have a Republic or a Democracy or any type of government other than a Corpocracy or Oligarchy is way beyond me. I’d like to see reform while we still have a chance at reform.
Vote out all non-performing incumbents.
Vote for any 3rd party candidate to demonstrate the potential for a 3rd party in 2012.
Stand up new 3rd parties with a different attitude. (They work for us.)
Make elected officials ACCOUNTABLE to the public through party rules that give members the opportunity to vote to reject those officials from the party when they don’t follow the party agenda or just go crazi. Check our a party with a different attitude and with built-in citizens’ oversight for elected officials at www.demreps.com. See what a REAL reform agenda looks like.
Otherewise, we have the government we deserve.
Remer writes; “And let’s be clear, no one is proposing gargantuan tax increases on the upper 5% of the wealthiest. The proposal is to allow their tax rates to return to the levels they were at in the year 2000.
Previously Remer wrote; “I would be for a law that says any American citizen with assets over 25 million dollars may not extract more than half of their assets to a foreign residence under penalty of forfeiture to the US tax payers.”
It would appear that Remer draws the line with being against “gargantuan tax increases” but has no problem with confiscation of wealth.
One could suppose this is the “scalpel” that Mr. Obama refers to in his double talking schemes.
Posted by: Jim M at October 22, 2008 12:38 PMDavid R. Remer wrote:HMMMmmmmm … So, you might vote for incumbent politicians?Probably true.
David R. Remer wrote: But, where is the option for voters?The same option that voters always had, which was always the one simple, common-sense, logical, and responsible thing voters were always supposed to do.
Elect responsible politicians.
And that can not happen by repeatedly rewarding bad politicians with 85%-to-90% re-election rates.
With regard to Obama/Biden or McCain/Palin, it doesn’t matter much to me which wins.
Trying to choose between either is sort of like trying to determine which of two piles of crap smells the worst.
However, with regard to Congress, voters should always oust as many irresponsible incumbent politicians as possible, regardless of party.
It is the blind partisan loyalties that perpetuates the stranglehold of the two party-duopoly.
David R. Remer wrote: Inaction, NOT VOTING, accomplishes nothing, and leaves Democrats and Republicans struggling with each other for power instead of with the problems facing the nation.
Have you decided to vote for incumbent Democrat politicians?
Is that for fear or disdain of voting for an non-incumbent of another party?
Rewarding bad incumbent politicians with re-election is that will not only solve nothing, but make things worse.
David R. Remer wrote: You ask, “But, where is the option for voters?”I’m not sure I believe what I’m hearing.
There is an option.
That option is what voters were supposed to be doing all along, always.
Never reward any bad politicians with re-election.
Have you changed your mind about voting out bad incumbent politicians, regardless of party?
If not, how will you vote for a non-incumbent Democrat when none are running against the incumbent Democrat politicians?
David R. Remer wrote: A one party government has at least the ability to put forth its own solutions, some great, some good, some poor, and some destructive. Some problems will be addressed satisfactorily.Not likely.
Not by bad, FOR-SALE, irresponsible incumbent politicians who are repeatedly rewarded for being corrupt, irresponsible, and incompetent.
David R. Remer wrote: What is needed is a viable competitor party with a simple agenda, economy, health care, and political - lobbyist reform. Nothing more, nothing less. Where is it?No. That isn’t what is needed.
What is needes is what voters did in year 1933, when they ousted 206 members of Congress.
That is the only thing politicians will understand.
Letting the incumbents in the two-party duopoly enjoy 85%-to-90% re-election rates will simply allow Congress to grow more corrupt, irresponsible, FOR-SALE, and incompetent.
David R. Remer wrote: A potential VOID supporter once said to me, very wisely, that it is not enough to give voters something to vote against, they demand something to voter for.I agree.
Vote for non-incumbents.
Are you not promoting that anymore?
David R. Remer wrote: Voting out incumbents is absolutely necessary to open the door for a more responsible and leadership to emerge backed by VOID support which will hold it accountable.Yes, it is necessary. And when the pain is bad enough, unhappy voters will repeat what happened in 1933 (when 206 members of Congress were ousted from office).
David R. Remer wrote: What is lacking is the vision of where that more responsible leadership will come from.Not really.
That leadership must come from the voters themselves.
Their leader is called: Mr. Pain A. Misery
Repeatedly rewarding any irresponsible incumbent politicians will simply make the incumbent politicians worse.
And we’re approaching a point where we don’t have enough time for any more nonsense and letting the two-party duopoly take turns screwing the majority of Americans.
David R. Remer wrote:Very probably true, based on:Probably true.
- the last 51 years of consecutive deficit spending, and incumbent Democrats have significantly worse voting records on pork-barrel over the majority of those years, despite the Republicans setting new deficit records in the last 8 years;
- the bail-outs were mostly supported by incumbent Democrats, despite the majority of Americans that opposed the bail-outs;
- the incumbent Democrats most certainly will not stop illegal immigration, and will also pass another shamnesty like the shamnesty of 1986 which more than quadrupled the problem;
- the incumbent politicians will continue to despicably pit American citizens and illegal aliens against each other for votes , profits , and (supposedly, but severely misplaced or false) compassion;
- the debt will continue to grow out-of-control;
- the incumbent politicians will not stop these 10 major abuses;
- the incumbent politicians will turn a bad situation into a worse situation, with more bail-outs, debt, borrowing, money-printing, inflation, pork-barrel, and rampant spending;
- the incumbent politicians will continue the rampant lawlessness and violations of the Constitution;
- the incumbent politicians will continue to make unfair trade deals;
- the incumbent politicians will probably continue the occupation of Iraq for many more years;
- the incumbent poltiicians will continue to be FOR-SALE, carry the water for their wealthy puppeteers; and sell out the majority of Americans;
- the incumbent poltiicians will continue the plutocracy/kleptocracy;
- the incumbent politicians will continnue the dishonest, usurious, predatory, inflationary, mathematically doomed monetary system which is doomed to collapse due to ever growing debt and inflation;
Good leadership would be great, but neither party is offerring it.
So why chooes either.
Why not send them a much-needed, loud-and-clear message, and vote as many of their sorry, FOR-SALE, corrupt, irresponsible butts out of office as possible?
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
Posted by: d.a.n at October 22, 2008 01:53 PMThis is a mere thought process, there will not be an exam and I will not provide a bunch of numbers to back these thoughts up:
After a certain amount of wealth is achieved it no longer has meaning to the one gathering it.
Once that level is achieved, any more accumulation is done merely for bragging rights.
Bragging rights are used to show accomplishments above the norm and as soon as those norms are exceeded have little meaning to anyone, let alone the one amassing it.
If wealth has built to that level, taxation has little meaning either, and may very well add to the brag, i.e., I pay more taxes than God…
It is not inconceivable that taxing fifty percent on the ultra-wealthy would be doing them a favor.
I’ve said it before and I’ll say it again…taxing the poor doesn’t work, because the poor can’t afford taxation. The ‘poor’ classification grows larger each year, so the pool of those who comprise the taxpayer pool shrinks.
It has been the American culture to raise taxes on the middle Class, but the middle class is losing the bottom half, so there are less of them to raise taxes on.
Other than cutting services and gutting our infrastructure even more than it has been gutted now, the only viable alternative is to raise taxes on those left who can still afford to pay them.
If not paying their share, which they have never been asked to do, is so important they would choose to move to another country in order to keep from paying that share…so be it…good riddance.
Not many of our ultra-wealthy would have been able to amass their fortunes anywhere other than in America, i.e., can you imagine Sam Walton being able to start Wal*Mart anywhere else?
If they cannot help us out of this mess, they really should move to another country…
Posted by: Marysdude at October 22, 2008 07:50 PMIf they cannot help us out of this mess, they really should move to another country…Perhaps. Taxes have been regressive for a long time now.
The very least we should do is make the tax rate EQUAL, and ONLY on income above the poverty level.
And if that isn’t enough, then the federal government should cut spending wherever necessary.
Posted by: d.a.n at October 22, 2008 08:49 PMd.a.n.
I presented this plan a year or two ago, but this is how an alternative tax plan might look:
1. Set a no tax at the poverty level, i.e., if the government establishes that someone lives at or below poverty level at $25,000 per year (that poverty figure would be subject to annual adjustment), no one who earns less would pay any tax, period.
2. No matter how much income a person makes, they would not pay tax on the first $25,000 (remember this $25,000 is subject to annual adjustment because it is aligned with the mandated poverty level). It makes no difference if earnings are $26,000 or $400,000 the first $25,000 would not be taxed.
3. Earnings from $25,001 to $35,000 would be taxed at 10% of the top $10,000.
4. $35,001 to $45,000 at 10% of the first $10,000 and 20% of the top $10,000.
5. $45.001 to $55,000 at 10% of the first $10.000, 20% of the next $10,000 and 30% of the top $10,000.
6. $55,001 to 65,000 at 10% of the first $10,000, 20% of the next, 30% of the next, and 35% of the top $10,000.
7. Continuing to increase at 5% increments for each income increase of $10,000 to a maximum of 50% (as fixed by budgetary requirement), and continuing at the maximum from that point up.
8. Allow no fudges or loopholes, no exemptions or deductions. Everyone pays the same at each level.
9. A person having an income of one million dollars ($1,000,000), would pay zero taxes on the first $25,000, 10% on the first $10,000 above that, 20% on the next $10,000, etc., until the (50%) maximum was reached and would pay that maximum on the rest of his/her income.
10. No differences would be allowed for types of income, i.e., dividends, interest, realty investment income, inheritance, wages would all be taxed at the same rates.
Example:
At $65,000 per year
1. You would not pay any tax on the first $25,000
2. You would pay 10% on the first ten above 25,000, or $1,000. Remember that would be $1,000 on actually the first $35,000 because you did not pay any on the first $25,000.
3. Then you’d pay 20% on the next $10,000. That’s $2,000 added to the other $1,000 for a total of $3,000 on $45,000 of income.
4. Your 30% of the next $10,000 would be $3.000. Now you’ve paid in $6.000 on $55,000 income.
5. At this point it changes to increases of 5% per $10,000. 35% of $10,000 is $3,500. Add that to the $6,000 for a total of $9,500 on $55,000 income.
6. Add another 40% of the last $10,000. Your bill is $13,500 on an income of $65,000. That leaves you $51,500 of spendable income.
7. For those making more than $65,000…they would pay 45% on the next $10,000 taking them to $18,000 out of 75,000 ($57,000 spendable).
8. Max tax up to 50% of all income above $85,000.
These numbers are not etched in stone, but it would be absolutely necessary to maintain the ‘no deductions, no exemptions no loopholes mandate…all numbers would be established by the proposed budget for the year of that budget.
Remember, no matter how smart someone is, no matter how ambitious they are, no matter how hard they work, they are in the position they attain as a matter of luck. Luck at being born. Luck at being born in a given location. Luck at being born to certain parents. Luck at being instilled with certain talents. Luck to be born into a select group, etc. So, if they somehow end up earning more, they should pay more. In other words, a person can claim credit for the amount of learning, ambition and charisma they accrue in life, but not the ability to accrue it. The ability comes with the luck of the draw, it cannot be learned.
We all need the things taxation brings, i.e., highways, defense, and yes, even welfare, but to demand the tax burden be placed on the poor and near poor is not very practical. They just don’t meet the supply side of the requirement. Only the wealthy meets that, and only they can cough it up. That does not mean the rest of us can just sit back and reap the benefits, it just means that the lower middle class has been trying to carry it too long and now with a shrinking middle class, someone else has to pick it up or the nation goes into a tail spin.
Dropping the poverty poor from the tax paying poles harms no one, and progressively higher demands on the more well-to-do harms no one (unless I miss my guess, multi-billionaires are less interested in having multi-billions as they are in the accrual). But, if exemptions and deductions are allowed to stay in the mix, the beneficiaries of that are only those who seek loopholes. So, any plan, no matter who proposes it MUST restrict exemptions and deductions to nil.
Question: Is it any more foolish or ridiculous to ask the wealthy to give up half their income than it is to ask the poor to give up a fourth of theirs?
A by-product of this tax plan might be that wealthier tax payers would keep a better eye on pork barreling and foolish spending, and they would have the clout to rein it in.
That’s one liberal view.
Marysdude,
I reject your plan because it is progressive.
The more you make, the higher the percentage.
That ain’t right.
Marysdude wrote: That’s one liberal view.That’s right.
What’s wrong with an EQUAL percentage?
Posted by: d.a.n at October 22, 2008 10:59 PMWith an EQUAL percentage, the person making $100K would pay twice the amount in taxes as the person making $50K.
And that ain’t enough for you?
Posted by: d.a.n at October 22, 2008 11:01 PMWhat this all demonstrates is an obvious difference between some who think EQUAL percentages ain’t good enough, and some who do.
An equal percentage (on all types of income) is the system that most Americans think is most fair.
Posted by: d.a.n at October 22, 2008 11:04 PMd.a.n.,
An equal percentage actually impacts the disposable income of low to middle class people more harshly than those up the scale. Higher income folks don’t eat more or drive more or…or…
Posted by: Marysdude at October 22, 2008 11:11 PMd.a.n.,
The progressive tax is not bad because it is progressive, it is bad because it lends itself to cheats. The tax code is not bad and the IRS is not bad. Congress has ruined our tax code by building too many bad things in to it. If we were able to talk Congress into killing every deduction, and exemption and loophole, it would only require some tweaking to make the current tax system work.
I, personally, think my progressive system would work, but I am not a CPA…there are probably several programs out there that are better or more workable than mine. But, frankly, flat taxes and fair taxes are mostly neither flat or fair. The progressive is the overall most fair and the most workable of the bunch.
Posted by: Marysdude at October 22, 2008 11:51 PMd.a.n.,
As a once staunch supporter of the fair tax, let me be the first to admit that were it not for my experiences on watchblog, I would not feel the way that I do now.
Marysdude, you are dead wrong. Fair is defined as equal. Look it up. A flat tax without loopholes is fair. The dollars going to Uncle Sam go up but in linear fashion. The idea that once you have made what you deem to be enough money, a person no longer values that money and should therefore be relieved of it, is so communist it is nauseating. Flat IS fair. The Robin Hood mentality is just the other side of a selfish agenda. Right now the rich pay far less than their fair share, you want them to pay far more than their fair share, when the answer is simply to make it FAIR FOR EVERYONE.
d.a.n,
I can’t help but notice how infrequently anyone can argue with your posts, and when they do, it is philosophical and not factual. Thank you for taking the time to format those text graphs into your blog posts. The information is revealing and a little scary but useful and appreciated.
Yukon,
Demanding that a minimum wage earner layout 23% or 17% of income that does not even cover his basic needs, while demanding no more of someone who doesn’t even need the amount he has is not fair in any way.
The low wage earner has to have food and shelter and a method of transportation. The one who has succeeded has all that covered with plenty to spare…and that is nice, for the successful fellow, but now place an emergency into the mix and the low wage earner cannot cover it, while the successful fellow has no problem with it.
We cannot all be successful. That is a fact. Our society will not allow it, so society pays for that disparity by taxing someone who can pay the tax and not taxing someone who can’t. That is not only more fair, it is more pragmatic as well.
What in the world do you have against those who think in philosophical terms? Must everyman be a numbers cruncher? Perhaps you are one of those who think numbers crunchers aren’t responsible for the current economic crisis? Which philosopher thought up derivatives, and hedges?
Posted by: Marysdude at October 23, 2008 09:43 AMYukon Jake, Thanks!
Also, time and time again, MOST Americans also believe that a flat-percentage is most fair (provided all of the tax-loop holes and tax shelters are eliminated too).
Yukon Jake wrote: The Robin Hood mentality [i.e. support for a progressive percentage tax scale] is just the other side of a selfish agenda.You’re right.
I agree 100%, and I also find the idea of a progressive percentage, and those that say “they are so wealthy, they don’t need it” to be repugnant.
In fact, that Robinhood philosophy sounds like jealousy and envy disguised as demands for equality.
The current tax system is regressive and that is appalling and unfair, but a progressive tax system is also appalling and unfair.
________ 17% Income Tax ONLY on Gross Income ___________________________
17% |———————————————————————————————-x
16% |———————————————————————x————————-
15% |————————————-x———————————————————
14% |—————————-x——————————————————————
13% |———————x————————————————————————-
12% |—————-x——————————————————————————
11% |————-x———————————————————————————
10% |————x———————————————————————————-
09% |———-x————————————————————————————
08% |———x————————————————————————————-
07% |———x————————————————————————————-
06% |——-x—————————————————————————————
05% |——x—————————————————————————————-
04% |——x—————————————————————————————-
03% |—-x——————————————————————————————
02% |—x——————————————————————————————-
01% |—x——————————————————————————————-
00% |xx————————————————————————————————-
__$0K $20K $40K $60K $80K 100K 120K 140K 160K 180K 200K …$1Million… GROSS INCOME
That (above) is the way the tax curve should appear for gross income.
________ 17% Income Tax ONLY on Income Above the Poverty Level _________
18% |————————————————————————————————
17% |xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
16% |————————————————————————————————
15% |————————————————————————————————
14% |————————————————————————————————
13% |————————————————————————————————
12% |————————————————————————————————
11% |————————————————————————————————
10% |————————————————————————————————
09% |————————————————————————————————
08% |————————————————————————————————
07% |————————————————————————————————
06% |————————————————————————————————
05% |————————————————————————————————
04% |————————————————————————————————
03% |————————————————————————————————
02% |————————————————————————————————
01% |————————————————————————————————
00% |—————————————————————————————————-
__$0K $20K $40K $60K $80K 100K 120K 140K 160K 180K 200K …$1Million… GROSS INCOME
That (above) is the way the tax curve should appear for all income above the poverty level (a flat percentage).
The percentage could vary over time, but something is terribly wrong if that percentage must be over 17%.
A 17% rate will require federal spending cuts.
Warren Buffet paid 17.7% on $46 Million in year 2006 (One-Simple-Idea.com/DisparityTrend.htm#WarrenBuffet).
If 17.7% is good enough for Warren Buffet, who wasn’t complaining, and even said the tax system was regressive (based on a poll in his own office of his own employees), it ought to be good enough for everyone.
Any way, massive cuts (at least 10%) in federal spending are needed to have a 17% income tax.
The federal government already gets plenty in tax revenues ($2.5 Trillion in year 2007), and giving it more money will only mean that it will spend more (and more irresponsibly).
Federal spending is out-of-control, and spent another half-Trillion over that $2.5 Trillion in revenues in year 2007.
This year, it is much worse, with $0.783 Trillion in excess of revenues (over spending of over $2.14 Billion per day!
YEAR _______ National Debt ________ Increase per year _____ Increase per day
9/25/2008 ; $9,790,496,000,000.00 ; $782,842,600,000.00 ; $2,144,774,322.57
9/30/2007 ; $9,007,653,372,262.48 ; $500,679,473,047.25 ; $1,370,785,689.38
9/30/2006 ; $8,506,973,899,215.23 ; $574,264,237,491.73 ; $1,572,249,794.64
9/30/2005 ; $7,932,709,661,723.50 ; $553,656,965,393.18 ; $1,515,830,158.50
9/30/2004 ; $7,379,052,696,330.32 ; $595,821,633,586.70 ; $1,631,270,728.51
9/30/2003 ; $6,783,231,062,743.62 ; $554,995,097,146.46 ; $1,519,493,763.58
9/30/2002 ; $6,228,235,965,597.16 ; $420,772,553,397.10 ; $1,152,012,466.52
9/30/2001 ; $5,807,463,412,200.06 ; $133,285,202,313.20 ; $364,914,996.07
… … … … … … … … … … . .
6/30/1960 ; $286,330,760,848.37 ; $1,624,853,770.15 ; $4,448,607.17
6/30/1959 ; $284,705,907,078.22 ; $8,362,689,332.41 ; $22,895,795.57
6/30/1958 ; $276,343,217,745.81 ; $5,816,045,849.38 ; $15,923,465.71
6/30/1957 ; $270,527,171,896.43 ; -$2,223,641,752.89 ; -$6,087,999.32
If the federal government were to get serious and disciplined (which is unlikely), over time (many years from now), as the effects of the 77 Million baby-boomer bubble has subsided, and some federal debt is reduced, that 17% flat-rate-tax percentage could possibly be lowered.
However, this would take extreme discipline, which I do not beleive Congress has now, or will have it anytime soon (regardless of the outcome of this election on 4-NOV-2008).
In fact, a severe economic melt-down is very likely, due to the current $10.5 Trillion National Debt, $67 Trillion nation-wide debt, inflation from excessive money-printing, rampant borrowing, spending, waste, and a Congress that is irresponsible, corrupt, FOR-SALE, greedy, and incompetent.
A severe economic melt-down is very likely because of the method that has been decided to deal with the massive debt, which is more debt, borrowing, money-printing, pork-barrel, spending, and waste.
The last bail-out BILL (H.R. 1424) had a healthy portion of pork too (over another $100 Billion).
The current tax system is regressive and unfair, and that needs to stop, but it does not mean we need to go to the other extreme.
Also, what is very unfair about the current tax system is that different types of income are taxed at different rates.
Capital gains income is only taxed at 5%-to-15%.
Capital gains are exempt from Social Security.
Dividends are exempt from Social Security.
Interest income are exempt from Social Security.
And labor income above $102K (for year 2008) is exempt from Social Security taxes.
That’s how Warren Buffet
Most Americans agree on a lot of things, but it is constantly the two extremes that are always pushing THEIR extremist philosophies.
This is unfortunate, since that majority of Americans that agree on a lot of things, are the less vocal, and less engaged, and ultimately end up with the one extreme or the other … at least, until it becomes too painful.
Any way, the tax system that will acquire the best compliance is the tax system that MOST Americans believe is the most fair, and that is an Equal-Percentage Income Tax on all types of income, with no tax loop holes, deductions) only on income above the poverty level.
The fact is, with a flat percentage (e.g. 17%) on all income above the poverty level for everyone, regardless of gross income, the tax system is a flat percentage (and a flat 17%) based on income above the poverty level, but it is a progressive tax based on gross income. Yet, that’s still not enough for some people.
Marysdude wrote: d.a.n., An equal percentage actually impacts the disposable income of low to middle class people more harshly than those up the scale.So what?
That’s merely because the wealthy have more disposable income.
An equal percentage on all types of income above the poverty level means a wealthy person making $500K pays 10 times more dollars in taxes than a person making $50K .
And that’s not fair enough for you?
So you think the wealthier a person is, the higher percentage they should pay?
One could also say that a flat percentage decreased the disposable income of the $500K earner by a factor of ten times larger than the $50K earner.
So, your disposable income argument is very weak indeed, since an equal proportional tax rate percentage increases the amount of tax as the amount of income increases.
It just doesn’t do it exponentially, which is what progressive and regressive tax systems are.
I do not share you philosophy on taxes, and fortunately, neither do most Americans.
A flat percentage is proportional. It is neither progressive or regressive.
You undoubtedly would agree that regressive taxation is unfair, but not progressive taxation?
And the best argument you can come up with is:
Marysdude wrote:
- [1] Higher income folks don’t eat more or drive more …
- [2] The progressive tax is not bad because it is progressive,
- [3] The progressive is the overall most fair and the most workable of the bunch.
None of that is very convincing, and most Americans polled strongly disagree.
Marysdude wrote: d.a.n., d.a.n., The progressive tax is not bad because it is progressive, it is bad because it lends itself to cheats.False.
Tax rates and perversions of the tax code are two separate issues.
A Progressive tax is bad because it is the reverse of regressive taxation, which you will agree is unfair.
Thus, both are unfair.
The cheating is a result of severe over-complication to make the system ripe for abuse and tax cheating, but also to allow legal cheating via countless tax loop-holes and deductions, and exemptions that mostly favor the wealthy.
Marysdude wrote: The tax code is not bad and the IRS is not bad.False.
Severe over-complication of the tax code, to make it ripe for abuse, and let the wealthy legally avoid taxation, is bad tax code.
And the IRS, which abuses its power, and harasses many people unfairly, is oppressive and bad for America too.
The abuses of the IRS would fill volumes, so saying the IRS isn’t bad is highly debatable.
Marysdude wrote: Congress has ruined our tax code by building too many bad things in to it.True.
Congress is directly and largely to blame for the pervereted tax system.
However, voters are too, for repeatedly rewarding THEIR incubment polticians with perpetual re-election.
Marysdude wrote: If we were able to talk Congress into killing every deduction, and exemption and loophole, it would only require some tweaking to make the current tax system work.All of the deductions should go.
Allow one, and you must allow all.
Allow one, and the perverions of the tax code will continue.
The tax system should not be perverted or overlapped with welfare and other systems, because it leads to over-complications and makes it ripe for more abuses.
Marysdude wrote: I, personally, think my progressive system would work, but I am not a CPA.Most Americans disagree with your progressive type of tax system.
Marysdude wrote: … there are probably several programs out there that are better or more workable than mine.Then why choose yours over those others?
Marysdude wrote: But, frankly, flat taxes and fair taxes are mostly neither flat or fair.The un FairTax.org’s 30% sales tax is NOT a fair tax, because ALL sales taxes are regressive. I agree that the un FairTax.org’s 30% sales tax is unfair.
However, the flat (equal) percentage tax on all types of income is what most Americans polled believe is most fair (with the elimination of all tax loop-holes and deductions).
Also, most Americans agree that taxing people below the poverty-level is pointless, merely pushes them into poverty and/or onto welfare, costing all of us more in taxes, bureaucracy, and needless waste.
Marysdude wrote: The progressive is the overall most fair and the most workable of the bunch.Most Americans disagree with you a progressive tax s what is most fair.
Research it, and you’ll see.
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
Yukon Jake wrote: d.a.n., As a once staunch supporter of the fair tax …I also admit to initially supporting the un FairTax.org’s plan.
But after a few points others made here at WatchBlog and a few other websites, and studying it a bit further, and the regressive nature inherent within all sales taxes, I also changed my mind too. I think the un FairTax.org’s tax plan is dead.
Also (and I used to be a Republican), look at who backed the un FairTax.org’s 30% Sales tax.
Even McCain initially supported the un FairTax.org’s 30% Sales tax, but later abandoned it. I think a lot of people have abandoned it. Very few Democrats (5 out of 91) were ever for the un FairTax.org’s 30% Sales tax plan.
I wonder if it is because the understand the regressive and unfair nature of sales taxes, or because 87 of the 91 Congress persons supporting it are Republicans. Either way, and I have no overall affinity for either party, but forwhatever reason, the Democrats got it right by rejecting the un FairTax.org’s 30% Sales Tax plan.
So, I wonder what was the major reason for the support (i.e. Republican versus Democrat) support/disdain of the un FairTax.org’s 30% Sales Tax so lop-sided?
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
Posted by: d.a.n at October 23, 2008 10:40 AMJim M, said: “It would appear that Remer draws the line with being against “gargantuan tax increases” but has no problem with confiscation of wealth.”
Jim M. apparently doesn’t understand that taxes are a confiscation of wealth for the greater good of the society and nation. A society and nation CANNOT exist without a government, and governments exact taxes to support its operation. Your line of reasoning Jim M in opposition to confiscation of wealth leads to anarchy. To oppose confiscation of wealth is to oppose government entirely, and that is anarchy.
You may find less cognitive dissonance seeking to join the Alaska Independence Party or your local Anarchist’s Party. They don’t believe in government and taxation either to support government either.
Posted by: David R. Remer at October 23, 2008 01:22 PMd.a.n.,
I don’t need to research to find that most Americans don’t like the current taxation mess…I don’t like it either. Most Americans would likely rather have no taxation at all. But most Americans can’t be against a progressive system that might work, because they’ve never seen one…
Get out of the number cruncher mode, and look at it from a different perspective. I know you promote your flat tax, and I understand why you do…I just think you’ve oversold yourself on it.
The poor are getting poorer…the middle class is disappearing…the people who have been holding our tax system together will soon be no more. Give us a break, as we go slinking into the underbelly of the economic system. Now, that would be fair and flat and noble.
Posted by: Marysdude at October 23, 2008 01:32 PMAll interesting discussion on this excellent article.
Is “confiscation of wealth” a misnomer here? I know it sounds sinister and on the issue of taxation it frames the argument against higher taxes et al., but it seems overly dramatic to me.
Here is a link to a more substantial “confication of wealth” information if you are interested.
http://www.sovereignsociety.com/Default/ToServeandProtect/tabid/1494/Default.aspx
“Since 1984, federal civil forfeiture laws have permitted seizing agencies to retain the assets they confiscate. What’s more, under the federal “equitable sharing program,” state and local police authorities may confiscate assets under federal laws that permit them to retain up to 80% of the seized property’s value.”
Using confiscation of wealth in relationship to taxes seems to diminish the real “confiscation of wealth” issue especially since the SCOTUS has determined it is constitutional to allow your property to be taken for business interests of others.
Posted by: j2t2 at October 23, 2008 02:20 PMMarysdude wrote: d.a.n., I don’t need to research to find that most Americans don’t like the current taxation mess…I don’t like it either.I wasn’t arguing that most people don’t like the current regressive tax system.
Many polls show most voters hate the current, severely complex, regressive, and unfair tax system. Only some of those it benefits (the wealthy) like it for obvious reasons.
Marysdude wrote: Most Americans would likely rather have no taxation at all.Of course. Few like taxes, and they like them less when they are wasted.
In the beginning, taxes were only raised for National Defense. Now look at what we have today.
Marysdude wrote: But most Americans can’t be against a progressive system that might work, because they’ve never seen one…False.
Many decades ago, tax rates were changed to be progressive.
Tax rates grew to such ridiculously high rates, it was almost impossible to avoid progressive taxation.
In some cases, tax rates were as high as 90% , which is outrageous.
As time went on, the tax system became severely perverted with tax loop-holes, deductions, exemptions, and massive complexity.
Not only were there tax cuts on capital gains, dividends, and interest, but as Social Security and Medicare tax rates steadily rose (with capital gains, dividends, interest income, and income above a cap exempt from Social Security and Medicare taxes), the tax system became increasingly regressive.
It went from the following …
________ Total Federal Tax on Gross Income ______________
40% |————————————————————————-x
35% |———————————————-x—————————
30% |—————————-x———————————————
25% |——————-x——————————————————
20% |————-x————————————————————
15% |———-x—————————————————————
10% |——x——————————————————————-
05% |—-x———————————————————————
00% |xxx———————————————————————-
__$0K $20K $40K $60K $80K 100K 120K 140K 160K 180K 200K …$1Million… GROSS INCOME
… to this …
________ Total Federal Tax on Gross Income ______________
40% |—————————————————————————
35% |—————————————————————————
30% |—————————-x—x—————————————- 30% on $60K
25% |——————-x——————-x———————————
20% |————-x——————————————x—————-
15% |———-x————————————————————-x 17.7% on
10% |——x——————————————————————- Warren Buffet’s
05% |—-x——————————————————————— $46 Million
00% |xxx———————————————————————-
__$0K $20K $40K $60K $80K 100K 120K 140K 160K 180K 200K …$1Million… GROSS INCOME
… which is regressive.
Marysdude, Do you think an equal 17% only on all types of income above the poverty level (no tax loop holes) is unfair?
Warren Buffet paid only 17.7% on $46 Million in year 2006.
Do you think it is unfair if you also pay 17.7% on your income (i.e. only on income above the poverty level; it would be likewise for Warren Buffet)?
Marysdude wrote: Get out of the number cruncher mode, and look at it from a different perspective. I know you promote your flat tax, and I understand why you do…I just think you’ve oversold yourself on it.Number cruncher mode?
It’s not rocket science.
I support a flat percentage on all types of income above the poverty level, with elimination of all tax loop-holes.
I am simply supporting not only what I think is most fair, but what most Americans also think is most fair too.
I’ve done some polls on my own specific 17% tax plan and those polled overwhelmingly supported it over the un FairTax.org’s 30% Sales Tax and a Progressive Tax system.
I haven’t seen nor heard of a better system yet.
When I do, I’ll support it, but your progressive tax ain’t it, because regressive and progressive tax systems punish one group.
An equal percentage makes more sense, and most Americans agree.
If I’m oversold on it, then so are most Americans.
Marysdude wrote: The poor are getting poorer…the middle class is disappearing…the people who have been holding our tax system together will soon be no more.I agree with that 100%, because the current system is unfair and regressive.
Marysdude wrote: Give us a break, as we go slinking into the underbelly of the economic system. Now, that would be fair and flat and noble.I agree. Make the tax system as simple as possible and as fair as possible, without taxing people who already earn less than the poverty level.
Get rid of all regressive caps.
Get rid of all tax loop holes and deductions (including the home mortgage interest deduction).
Get rid of the complexity which breeds tax evasion and numerous other abuses.
Lower the percentage to 17% for EVERYONE.
Eliminate deficit spending and cut total federal revenues at least 6% (because 17% of $13.86 Trillion GDP is about 6% less than year 2007’s total revenues of $2.5 Trillion).
If the federal government can’t function on 17% of all income, then it needs to cut spending.
DRR replied “Those on the left, have only one responsible course going forward, and that is reforms that more equitably distribute the nation’s wealth in a fashion which sustains and promotes the nation’s integrity and stability going forward, preserving the capitalist system that innovates and rewards success while insuring the Middle Class remains the majority of the population and fit and willing to work for a decent standard of living.”
David isn’t that in essence Obama’s tax plan? He has stated bottom up tax cuts up to $250k and raising taxes to Reagan era levels above that amount. This should help to encourage spending by the masses and debt payment by those that made the most this past 2 decades. If spending can be corralled and cut this should set us on the road to economic stability eventually.Perhaps then a flat tax plan could be viable.
Holding the top 1% financially accountable for the $11 trillion debt as well as the deficit spending in the yearly budget may help to reign in unnecessary government spending and military spending on activities outside of the defense of this country as the pain is felt by the 1%. Just a thought.
j2t2, Obama’s tax plan redistributes wealth from the wealthy to the middle class, but, at the additional cost to the national debt and future tax payers of well over 2 trillion dollars. That is neither sustainable for lower taxes for the middle class, nor does it reinforce the integrity of the economy going forward.
Obama’s total policy proposals increase the national debt an additional 2 trillion which will put the national debt at around 14 trillion dollars by the end of his first term. The end of his first term will be met with the as yet unaddressed issue of the 40+ trillion dollars in unfunded Soc Sec. and Medicare/Medicaid mandated outlays.
I am supporting Obama as the better of the two front running candidates, but, Obama has even begun to convince me that he has a viable plan for rescuing our economic future given current circumstances and future obligations. At best, he is offering short term relief to the middle class while insuring higher taxes for them in the long term.
If he can make the case that higher future taxes will provide equally greater and better government services, he has yet to make that case. McCain’s plan adds over 4 trillion to national debt. So, Obama’s is less offensive on that score. But, Obama’s plan is far, far from comprehensive in addressing short and long term economic realities.
Posted by: David R. Remer at October 23, 2008 04:34 PMThe top 1% of the wealthiest in America control what percent of the wealth? Is it 95%? Somehow increasing the tax burden on that group does not seem too unfair…how could they amass that much wealth fairly?
Waltons - Killed unions and inspired the poisons of China trade
Gates - Monopolistic practices created out of theft of ideas from IBM
You can likely think of others…they actually should be held somewhat accountable for the debt.
Posted by: Marysdude at October 24, 2008 05:12 AM
Seems the heroes act of 2008 placed a tax burden on those that leave the country for citizenship elsewhere.
j2t2, thank you for the link. Here is the exact verbage from the bill:
Tightens the expatriation rules. U.S. citizens and long-term U.S. residents are subject to tax on their worldwide income. Taxpayers can avoid taxes by renouncing their U.S. citizenship or terminating their residence. The Act tightens the expatriation rules to ensure that certain high net-worth taxpayers can’t renounce their U.S. citizenship or terminate their U.S. residency in order to avoid U.S. taxes. Under this provision, high net-worth individuals are treated as if they sold all of their property for its fair market value on the day before they expatriate or terminate their residency. Gain is recognized to the extent that the aggregate gain recognized exceeds $600,000 (which will be adjusted for cost of living in the future). The provision, which applies for those who relinquish U.S. citizenship or terminate their U.S. residency on or after the enactment date, is estimated to raise $411 million over 10 years.
This bill is targeted to those giving up citizenship and attempting to take or retain ownership of, assets in excess of $600,000.00.
It is interesting that our politicians anticipated an exodus by the wealthier class as tax rates are forced to increase by the unfunded mandate national debt of more than 40 trillion dollars coming, but, having been warned in 2005 by hard data (Alan Greenspan testimony) of the sub-prime mortgage industry problem, they failed utterly to respond.
What is the crucial difference in how our politicians responded? Expatriation law had no wealthy special interest lobbyist organization leaning on them, the mortgage-finance industry did lean hard and heavy.
There is no question that this expatriation law snuck in to the Heroes 2008 bill correctly anticipates a wealthier class of people having made their money in America, trying to exit with it when the bill for such opportunity came due. On balance, it was a good law, and well intended. How effective it will be, remains to be seen.
A semi-crooked tax attorney could arrange for a citizen to take up residence overseas on a visa to a country that would not enforce this law, transfer wealth in increments over a period of time, and then arrange for giving up citizenship. Whether the tax liability would be in excess of the crooked attorney’s fees, remains a huge question for those seeking an end run around the law.
Posted by: David R. Remer at October 24, 2008 09:48 AMMarysdude wrote: The top 1% of the wealthiest in America control what percent of the wealth? Is it 95%?It is about 40%.
That is a result of these 10 abuses, resulting in numerous deteriorating economic conditions.
Marysdude wrote: Somehow increasing the tax burden on that group [the wealthy] does not seem too unfair…how could they amass that much wealth fairly?Is that a call for fairer taxes or punishing the rich?
The current tax system is regressive, and federal taxes should be set to the same 17% (on all types of income: e.g. One-Simple-Idea.com/TaxSystemReform.htm) that Warren Buffet paid on $46 Million in year 2006 (but only on income above the poverty level, because pushing people into poverty and/or onto welfare wastes time, money, and resources).
A proportional (equal percetntage) tax is what most Americans believe is most fair.
Yet, neither Obama or McCain plan to do that.
Obama’s plan is to increase taxes on the wealthy by raising taxes on capital gains. That’s better than McCain’s plan to lower them, which would make the tax system MORE regressive and unfair. I’m not sure McCain really understands that because he may not be very good in math, having graduated 894th in a class of 899 and admitting economics is not his strong suit, ahd having said the economy was fundamentally sound as it was essentially melting down due to massive debt which stil exists, despite McCain’s and Obama’s voting for bail-outs for banks and corporations that will merely delay the consequences of so much debt, while making the problem worse too via more debt, borrowing, money-printing, pork-barrel, and rampant spending.
Wait and see.
The focus will be on more borrowing, money-printing, pork-barrel, and rampant spending, and the result will be more massive debt, which is eroding the U.S. Dollar, and compounding the massive debt problem.
P.S. Futures trading on the S&P was halted (but now open) and the DOW is at 8233.
j2t2, Interesting article:
- … Congress just passed a new law that will stop your capital — or at least a good portion of it — at the border, should you decide not to be a U.S. citizen anymore. Is it, perhaps, in preparation for the possibility that Americans might rebel at the debt and taxes incurred by their government by leaving for lower-tax locales? … .
Remer, as usual, ascribes a position to me that I don’t hold and then pontificates to show others his great brain power and wisdom such as this example by him;
“Jim M. apparently doesn’t understand that taxes are a confiscation of wealth for the greater good of the society and nation.”
I can think of a number of words one could use for legal taxation that would be a much better description than “confiscation”. Strange, that we don’t refer to the manual describing the tax code as the “confiscation code” as Remer implies.
Previously Remer wrote; “I would be for a law that says any American citizen with assets over 25 million dollars may not extract more than half of their assets to a foreign residence under penalty of forfeiture to the US tax payers.”
Apparently Remer sees no difference between “penalty of forfeiture” and what you and I or any other “normal” tax-paying American would call taxation under our current tax codes.
Remer has himself in a bind here by writing that he advocates “taxation” to use his word, of half of all assets by Americans over 25 million that any would dare to move, invest, transfer, etc. beyond our borders.
If one examines Remer’s position for even a second one can easily determine the absurdity of his position. But then…consider the source.
Posted by: Jim M at October 24, 2008 05:57 PMj2t2 provides a link from which I quote; “Property allegedly purchased with the proceeds of or “facilitating” criminal offenses committed under nearly 300 separate federal statutes may be forfeited.”
I wonder j2t2, if Remer believes that American’s having over 25 million in wealth are criminals worthy of having half of those assets in excess of his arbitrary amount “confiscated”. According to Remer and this definition, it is a criminal act to possess more than a certain amount of money, and to criminally move it offshore for whatever reason.
Does anyone believe that a socialist congress would pass such egregious legislation to be signed by a socialist president and ruled a constitutional act by any supreme court?
Posted by: Jim M at October 24, 2008 06:09 PMJim M provided another comment ignorant of facts and data.
For your information Jim M, the Heroes Act of 2008 passed this last Summer, provides precisely for this kind of tax confiscation for those attempting to give up citizenship to avoid taxes on property and assets. Except the Bill that passed stipulates confiscation tax levied on everything over $600,000 instead of the 25 million I proposed.
So, are you now for it because it passed through the legal process? :-)
Thank you again Jim M, for demonstrating that your comments often lack facts and data from the real world.
Posted by: David R. Remer at October 24, 2008 06:09 PMRemer is once again covering his a—. His original comment made no mention of the person whose wealth was being confiscated as one who was giving up his/her citizenship.
“Remer wrote; “I would be for a law that says any American citizen with assets over 25 million dollars may not extract more than half of their assets to a foreign residence under penalty of forfeiture to the US tax payers.”
Remer says “American citizen” and makes no mention of giving up that citizenship. Are we to assume that any American with a foreign residence has given up his/her citizenship Remer?
Keep digging Remer, I love the hole you’re in. Advocating an economic “Iron Curtain” for law-abiding American’s is despicable.
Jim, once again proffers comments demonstrating an inability to understand context. The TOPIC Jim M, and I quote:
“Tightens the expatriation rules.”
was what my comments referred to. Did you lose your dictionary? Can Jim M not look up that really big word Expatriation and learn what it is that is being discussed before his comments put their foot in their mouth?
“Does anyone believe that a socialist congress would pass such egregious legislation to be signed by a socialist president and ruled a constitutional act by any supreme court?”
Jim M confiscation of wealth is as American as apple pie my friend. The war on drugs signed in to law by Bush 1 allows for cash to be confiscated under the assumption that if you have a few thousand in cash on you it must be drug related. The confiscating police department then of course gets to keep the cash for it’s own gain.
As far as the wealthy don’t you think its time to stop offshore tax havens that allow these scoundrels to take the money and run? For years now the wealthy and it’s corporations have been paying less percentage wise than the middle class in taxes and receiving tax cuts under conservative rule. During this same time frame they have been borrowing to fund government obligations. While you may think this starving the beast approach to governing is acceptable I consider it to be thievery. It’s time for those that gained so much to return the stolen goods to the American people.
My whole point is taxes are not wealth confiscation at the point of a gun they are an obligation. The past 30 years of debt accumulation must be paid down. If you think it’s ok for the wealthy to move on now that the party is over then fine, but its only fair to leave your share behind in these trying times. It was the borrow and spend philosophy perpetrated upon the American people that got us here, now that the kool aid is gone its reality check time. Blame it on the “socialist” if you will but the fact is the conservatives and their principles have gotten us into this mess. Using a time proven conservative confiscation method to assure compliance only seems appropriate.
Posted by: j2t2 at October 26, 2008 09:45 AMBlame it on the “socialist” if you will but the fact is the conservatives and their principles have gotten us into this mess.I wouldn’t blame it one ONLY one party or ONLY the other.
Most (if not all) in Congress (in BOTH parties) got us into this mess, and too many voters reward BOTH parties for all of it with 85%-to-90% re-election rates.
There is substantial evidence that Democrats in Congress ALSO contributed to the massive mortgage-backed-securities melt-down.
There is substantial evidence that Democrats insisted on paving the way for loans for many people who could not afford them.
There is substantial evidence that Democrats insisted on ignoring irregularities, rising foreclosures starting in year 2004.
There is substantial evidence that BOTH Democrats and Republicans (alike) ignored an approaching mortgage melt-down that could be seen many years in advance (as far back as year 2004, if not earlier).
While incumbent politicians in BOTH parties have their own narrow, selfish agendas, BOTH contributed about equally to the disaster, which is far from over yet.
While the more powerful IN-PARTY is usually a bit more corrupt, any vast differences between the parties do not really exist. Not to any degree that is of ANY importance. The proof of it is overwhelming. The proof of corruption of BOTH will fill volumes. If all of it was now listed here, it would probably crash the web-server.
Republicans and Democrats represent two flawed extremes, and both are so bad, any virtues (if any) either have is truly insignificant, and the proof of it is the decline for MOST Americans for the last 30 years, in which BOTH parties have had their turns as the IN-PARTY/OUT-PARTY. Despite very deep-rooted partisan loyalties that refuse to accept that as fact, BOTH have thoroughly provided overwhelming proof of near equal irresponsibility, corruption, and incompetence.
Republicans, typically being wealthier, favor extremes that favor themselves and their wealthy puppeteers. Republicans get a LOT of money from banks, from corporations, and wealthier voters.
Democrats, typically being more “cradle-to-grave”, favor extremes that favor entitlements, unions, and their not-as-wealthy puppeteers. Democrats get a LOT of money from unions.
The IN-PARTY abuses their power, and so voters switch to the OUT-PARTY. That process repeats itself over and over. However, there is one huge problem with that. If BOTH are too corrupt and irresponsible, letting them take turns abusing MOST Americans only rewards bad behavior with perpetual re-election and high (85%-to-90%) re-election rates for BOTH parties, while letting the nation’s pressing problems continue to grow dangerously in number and severity.
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
Top 10 states with underwater loans
State # of mortgages % underwater
Nevada 609,577 47.8%
Michigan 1,145,572 38.6%
Arizona 1,287,076 29.2%
Florida 4,248,470 29.2%
California 6,461,981 27.4%
Georgia 1,456,327 23.2%
Ohio 1,905,000 22%
Colorado 1,045,773 18.3%
New Hampshire 144,479 17.2%
Texas 2,721,638 16.5%
Source:First American CoreLogic
Top 10 states with the fewest underwater loans
State # of mortgages % underwater
New York 1,554,607 4.4%
Hawaii 201,188 5.6%
Pennsylvania 1,413,181 5.7%
Montana 87,181 6.9%
Connecticut 678,766 7.4%
Alabama 238,978 7.4%
Oregon 641,820 7.5%%
Washington 1,273,659 7.6%
New Mexico 186,844 8.2%
New Jersey 1,748,179 9.3%
Source:First American
Texas (24 Million) and California (36.5 Million) have the two largest state populations.
However, the percentages and 10,000 foreclosures per day is staggering.
- Top 10 states with underwater loans:
- Rank / State / # of mortgages / % underwater
- (01) Nevada / 609,577 / 47.8%
- (02) Michigan / 1,145,572 / 38.6%
- (03) Arizona / 1,287,076 / 29.2%
- (04) Florida / 4,248,470 / 29.2%
- (05) California / 6,461,981 / 27.4%
- (06) Georgia / 1,456,327 / 23.2%
- (07) Ohio / 1,905,000 / 22%
- (08) Colorado / 1,045,773 / 18.3%
- (09) New Hampshire / 144,479 / 17.2%
- (10) Texas / 2,721,638 / 16.5%
Foreclosures have been rising for years (since year 2004) …
- ________________FORECLOSURES__________________
- 350,000 |—————————————————————-
- 325,000 |—————————————————————- 10,000
- 300,000 |—————————————————————x foreclosures
- 275,000 |————————————————————xx- per month
- 250,000 |————————————————x——-xx—-
- 225,000 |———————————————-x-x-xxx——-
- 200,000 |———————————————-x—x———-A
- 175,000 |——————————————xxx—————-U
- 150,000 |————————————xxxx———————G
- 125,000 |——————-x———xxxx—————————U
- 100,000 |——————x-xxxxxx———————————S
- 075,000 |xxxxxxxxxxxx———————————————T
- 050,000 |—————————————————————-
- 025,000 |—————————————————————-
- 000,000 |____________________________________________YEAR
- _____(2004)__(2 0 0 5)__(2 0 0 6)__(2 0 0 7)__(2 0 0 8)
… and even if foreclosures peaked in AUG-2008, it will most likely take several more years for the foreclosure rates to fall back to 2004 levels.
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).
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