Spooky Obama

[Professor S]

For more evidence, look to the success of Estonia, known as the Baltic Tiger. Of all the former soviet republics, Estonia has flourished. Why? There are many reasons including access to natural resources, but one major factor could be their largely free markets and flat tax system.

A balanced budget, almost non-existent public debt, flat-rate income tax, free trade regime, competitive commercial banking sector, innovative e-Services and even mobile-based services are all hallmarks of Estonia's market economy.

Now they are an emerging market, but so were their neighbors. Success is relative.

Their rebound from the global recession is also very indicative of free market rebounds. Yes, there are economic crises in free market economies, but they also tend to recover much quicker.

[Dylflon]

Originally Posted by Professor S

2) Eliminate the corporate tax. Corporations do not pay taxes. People do (investors, employees, or customers) so let them pay taxes with their income and not provide corporate loopholes so they can hide their income.

I agree with your tax points in that first page post. However, I feel that the rich could take a tax hit of over 25% and it still not be punishment for success. I think in the 50s the wealthiest members of the country had a tax hit of over 90%. I'm not saying go that far but still, everyone seems to think the 50s were great.

As for the corporate tax: isn't the problem that CEOs and high ranking employees of companies claim smaller incomes to avoid taxes? They are able to tie up their money in stocks and other things that are not taxed. Is there a way to tax stocks so that the rich are taxed accordingly?

Also, since corporation are by law seen as individuals now, shouldn't a certain percentage of a company's profit be taken as taxes? Or at the very least corporations could be given tax breaks for reinvesting some of their profits in the community.

[Professor S]

Originally Posted by Dylflon

I agree with your tax points in that first page post. However, I feel that the rich could take a tax hit of over 25% and it still not be punishment for success. I think in the 50s the wealthiest members of the country had a tax hit of over 90%. I'm not saying go that far but still, everyone seems to think the 50s were great.

On the face, this is true, but dig a little deeper and there are a lot of caveats.

1) No one paid 90%+ tax rates. They put money into tax shelters. The intent of the high taxes was to force corporations into investing in their companies. You can argue that worked, but there are mediating factors below.

2) During the 50's and early 60's the rest of the capitalist industrialized world was still putting the pieces back together from WW2. The US was the world's manufacturer. Also, communists didn't participate. Now China and Russia are becoming trade behemoths.

3) Even with a 90% tax rate, and being the world's manufacturer, taxes as a percentage of GDP topped out at about 22%, the same revenue rates generated in the 1990's with a 38% top tax rate. Again, its not about rates, its about GDP.

As for the corporate tax: isn't the problem that CEOs and high ranking employees of companies claim smaller incomes to avoid taxes? They are able to tie up their money in stocks and other things that are not taxed. Is there a way to tax stocks so that the rich are taxed accordingly?

Sure, tax all personal revenue/income at the same flat rate. This way no one is rewarded for hiding money and the government doesn't get the screw everything up by creating artificial demand for various investment products. Also, only tax income/revenue ONCE, and never twice.

Also, since corporation are by law seen as individuals now, shouldn't a certain percentage of a company's profit be taken as taxes? Or at the very least corporations could be given tax breaks for reinvesting some of their profits in the community.

Let me clarify: Corporations are NOT (or should not be) people in and of themselves. They are a entity controlled by and for people. As for taxes, they are simply passed on to the consumer. Taxes don't impact much in the way of corporate decision making because all corporations share the same burden. There is no incentive to absorb the cost.

Tax breaks or incentives for specific corporate actions can be disastrous. A large part of our recent troubles were caused by incentives given from the government through Fannie and Freddie to banks for handing out high-risk loans to people who couldn't afford them. This was in an effort to encourage reinvestment in the community. Banks made loans they never would have considered making without intervention and central planning.

In the end, much of these good intentions end up creating a snowball of mal-investment that creates crashes.

Last comment: Many people are currently misunderstanding capitalist concepts with corporatist concepts. Much of what people find objectionable and unfair about what is going in between government and industry is not capitalist. Capitalism is about profit and LOSS, loss being just as important. Today we are a system of profit, bailout, intervention, and stimulus. They are corporatist ideas.

[Bond]

Originally Posted by Dylflon

I agree with your tax points in that first page post. However, I feel that the rich could take a tax hit of over 25% and it still not be punishment for success. I think in the 50s the wealthiest members of the country had a tax hit of over 90%. I'm not saying go that far but still, everyone seems to think the 50s were great.

World War II. Our economic policies could have been complete garbage in the 50's and we still would have seen remarkable growth.

As for the corporate tax: isn't the problem that CEOs and high ranking employees of companies claim smaller incomes to avoid taxes? They are able to tie up their money in stocks and other things that are not taxed. Is there a way to tax stocks so that the rich are taxed accordingly?

CEOs & Co. will siphon off their money to offshore entities to evade taxes. Moving money into investments isn't really the problem, those earnings are taxed at a fairly high rate.

Also, since corporation are by law seen as individuals now, shouldn't a certain percentage of a company's profit be taken as taxes? Or at the very least corporations could be given tax breaks for reinvesting some of their profits in the community.

It already is. You're looking at standard double taxation of dividends paid out to shareholders. Stories like GE paying no taxes for a fiscal year are only true because the tax code is bonkers.

[thatmariolover]

Looking at past tax percentages is not enough. If we were already in a good economy, those numbers might work great. But we're in a heavy recession and the working class is in no way capable of buying its way out of it. A progressive flat tax rate sounds great. But if that's the case, why aren't we doing it?

The bottom 40% of Americans control 0.2% of America's wealth. The top 1% control 40% of America's wealth. A larger wealth disparity than many third world countries.

Corporations can't continue to push for lower wages or higher productivity from fewer workers. Americans already work disproportionately harder than their European counterparts (in terms of hours works per capita employed). We still have no purchasing power, so how are we supposed to bring the economy out of Recession? Some of the mega wealthy pay less taxes than middle class Americans. When people are hurting this bad, it makes sense that some level of wealth distribution (via taxes) is necessary.

How do we raise the GDP if we can't sell anything? How do we raise the GDP when corporations continue to send every industry overseas? We have to start somewhere. Right now, big businesses are ruining America (Apple may be an exception). Several big name Republicans are in favor of getting rid of the minimum wage at the same time they'd like to cut public services.

It's amazing how much stigma Socialism has, and yet we see Capitalism fail us every single day. Maybe we need to reevaluate our balance of the two.

[Bond]

Originally Posted by thatmariolover

Corporations can't continue to push for lower wages or higher productivity from fewer workers. Americans already work disproportionately harder than their European counterparts (in terms of hours works per capita employed). We still have no purchasing power, so how are we supposed to bring the economy out of Recession? Some of the mega wealthy pay less taxes than middle class Americans. When people are hurting this bad, it makes sense that some level of wealth distribution (via taxes) is necessary.

Well, I do think you can make a legitimate argument that the wealthiest Americans should pay more in taxes. But, that won't fix any of our long term economic problems or raise revenue by a meaningful amount.

I agree that income disparity is / will be a defining issue of our time. How that is fixed is a complex and problematic question.

How do we raise the GDP if we can't sell anything? How do we raise the GDP when corporations continue to send every industry overseas? We have to start somewhere. Right now, big businesses are ruining America (Apple may be an exception). Several big name Republicans are in favor of getting rid of the minimum wage at the same time they'd like to cut public services.

It's amazing how much stigma Socialism has, and yet we see Capitalism fail us every single day. Maybe we need to reevaluate our balance of the two.

Certain industries are being sent overseas for a variety of reasons, one of those being that our corporate tax rates are too high in comparison to other countries. If you look at a lot of these countries though, like China and India, they have major systemic problems that will prohibit them from becoming the world super power any time soon. As long as we remain the reserve currency of the world (which is truly a hidden tax on all other countries except us), we will remain the economic super power.

[Professor S]

Originally Posted by thatmariolover

It's amazing how much stigma Socialism has, and yet we see Capitalism fail us every single day. Maybe we need to reevaluate our balance of the two.

Ours is not a capitalist economy and it hasn't been since the early 20th century. Your difficulties are with corporatism, not capitalism.

[Bond]

So who caught Obama's speech last night?

To me, his proposal basically sounds like a neutered version of the previous stimulus package. Two main problems with it: (1) Tax incentives and breaks to hire new workers do not: (a) make fundamental economic sense and (b) are not large enough or long enough in duration to encourage the hiring of new workers. (2) The money that will go to the states to pay for "teachers, schools, and roads" (i.e. same as last stimulus), will in fact be used by the states to pay off debt and unfunded liabilities (same as last time).

[Professor S]

In other words: Same song, different dance.

Except this time he was far more condescending and rude. As if to say: "Maybe this time you morons will finally get it."

And to date, the bill that he's talking about, and going on tour to promote, doesn't yet exist and won't until he's done his tour to support it. Wouldn't want reality to get in the way of his talking points.

Lastly, President Obama should be fitted with an electroshock ankle bracelet. Every time he uses the words "committee" or "panel" he gets 50,000 volts.

[Bond]

Originally Posted by Professor S

Lastly, President Obama should be fitted with an electroshock ankle bracelet. Every time he uses the words "committee" or "panel" he gets 50,000 volts.

Also: "Pass this bill now!"

"Pass this bill now!"

"Oh, the bill isn't actually ready yet?"

"Pass this bill now!"

[Professor S]

I almost hate to say it, but I think I'm going to vote for Gingrich...

[Bond]

Whhhhaaaaaaaat?

[Professor S]

Originally Posted by Bond

Whhhhaaaaaaaat?

To be honest, he seems to have the most nuanced view on most issues. I also like that more than the other candidates, he shows an understanding of how government works and how to get things done inside the current system. I also liked how he often played the "adult in the room" and guided the conversation back to Obama and away from sniping at each other.

I don't think he'll win, but often times the most competent person doesn't win. See: Clinton vs. Obama.

[Bond]

I suppose, but I don't think Gingrich is Presidential material. However, I do like how he includes Regean in every debate.

[Professor S]

Originally Posted by Bond

I suppose, but I don't think Gingrich is Presidential material. However, I do like how he includes Regean in every debate.

Realistically I still think Romney is the best choice to beat Obama in a general election, I just hope he can make it our of the primary.

Since the last CNN debate, my opinion on Huntsman remains relatively unchanged. He speaks with a level of contempt for the other candidates that I simply can't connect with, and substantively, he hasn't been specific enough to engage me on an intellectual level. Most voters don't know much about him, and he hasn't done a very good job of educating us, so when he scoffs at the other more well known or more clearly defined candidates it comes off like a petulant child, IMO.

Perry needs to get a beat down. Every time he is faced ith a question that is out of his depth, and this is often, he retreats to "well we need to have a serious conversation about that". Romney did a decent job of calling him out on it on Monday, but Perry still seems to be unaccountably strong in the polls.