I can not help wonder -- what are the Republicans in the House thinking? They all seem perfectly fine with pushing the U.S. into default.
Why do I say that? Because as part of the legislation they passed, the cut, cap, and balance one (thank you Harvard comma), an amendment to the Constitution must be passed on a deeply political and divided issue (i.e. spending). They can't possibly think that had any chance to pass, even before the Senate and President outright said they wouldn't pass it. So it seems to me they are ok with steering the U.S. into default over political bluster that most Americans don't want -- the large majority want compromise that includes both cutting spending and raising taxes.
So in conclusion, wtf is wrong with these guys in the House?
I can not help wonder -- what are the Republicans in the House thinking? They all seem perfectly fine with pushing the U.S. into default.
Why do I say that? Because as part of the legislation they passed, the cut, cap, and balance one (thank you Harvard comma), an amendment to the Constitution must be passed on a deeply political and divided issue (i.e. spending). They can't possibly think that had any chance to pass, even before the Senate and President outright said they wouldn't pass it. So it seems to me they are ok with steering the U.S. into default over political bluster that most Americans don't want -- the large majority want compromise that includes both cutting spending and raising taxes.
So in conclusion, wtf is wrong with these guys in the House?
Just to note: Cut, Cap, and Balance does not require implementation BEFORE the default period. That is impossible because 2/3 of the states have to ratify the amendment. Its just a part of the process.
The real problem right now is that neither side trusts the other. Example: Obama's plan would cut the budget by billions, but not cut any actual spending. How is that possible? Our budget is going to grow each year going forward, and Obama's plan only reduces the rate that it increases. There are no real spending cuts. Also, Obama's plan would raise taxes immediately, but promise to cut budgets in the future. This was tried once before at the beginning of Reagan's term. The taxes were real, the cuts were never realized. Reagan believed that agreeing to that "compromise" was one of the biggest mistakes of his career.
Also, I think the Republicans are being unreasonable, and stupid, by publicly stating that no tax increases are on the table regardless of cuts. I'm for removing loopholes, but lowering the overall rate to help encourage real growth.
The truth is the solution is easier than anyone really thinks:
1) Install a progressive flat tax: All income up to $38,000 pays no federal income taxes. Every dollar above that number is taxed at 25%. This way everyone can plan accordingly, and in the end the rich pay more in taxes simply because a far higher percentage of their income is above the $38k threshold. Also, no one is punished for succeeding. NO LOOPHOLES.
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.
3) Pass a balanced budget amendment.
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Last edited by Professor S : 07-22-2011 at 04:45 PM.
1) Install a progressive flat tax: All income up to $38,000 pays no federal income taxes. Every dollar above that number is taxed at 25%. This way everyone can plan accordingly, and in the end the rich pay more in taxes simply because a far higher percentage of their income is above the $38k threshold. Also, no one is punished for succeeding. NO LOOPHOLES.
This is the best way to encourage economic growth, and in turn raise tax revenue. Raising taxes is rarely about raising revenue -- it's just politics.
The progressive flat tax is the best idea ever, and it will never happen.
I've really given up on this country's political system...when the middle class truly hits financial fallout there is going to be rioting and all the gated millionaires+ better watch themselves.
Obama is a good public speaker though.
Last edited by KillerGremlin : 07-26-2011 at 01:32 PM.
Well, looks as though the debt debacle is now over. Hopefully the focus will now be on creating economic growth, which would create jobs and decrease the deficit at the same time.
One issue that I don't think receives enough attention is the unemployment rate broken across education levels:
Those with doctoral, professional, and masters degrees are experiencing better than technical full employment, while those with a high school diploma or less are hit the hardest. Or, in other words: there was no recession for those with higher education.
1) Install a progressive flat tax: All income up to $38,000 pays no federal income taxes. Every dollar above that number is taxed at 25%. This way everyone can plan accordingly, and in the end the rich pay more in taxes simply because a far higher percentage of their income is above the $38k threshold. Also, no one is punished for succeeding. NO LOOPHOLES.
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.
3) Pass a balanced budget amendment.
1) Is a cool idea. But there's a tiny minority of people with a growing majority of the cash flowing through this country. If these people are going to continue to consolidate wealth at this rate, they need to put it back into the economy. They're not doing it by choice, they're not creating (nearly enough) jobs, and they need to be taxed a hell of a lot more than 25%.
2) Yes. And corporations shouldn't be "people". It's a joke.
1) Is a cool idea. But there's a tiny minority of people with a growing majority of the cash flowing through this country. If these people are going to continue to consolidate wealth at this rate, they need to put it back into the economy. They're not doing it by choice, they're not creating (nearly enough) jobs, and they need to be taxed a hell of a lot more than 25%.
TML, I understand your anger at the realities of this economy, but the facts simply don't support your argument.
1) Over 80% of the revenue lost from the Bush tax cuts came from the middle class, not the rich. Even if the rich pay a higher tax rate, there simply isn't enough of them to counter the sheer revenue generation power of the vast majority of those who make under $250K.
2) If you tax the rich (top 1%) at 100% they would only generate about $300 billion a year in revenue, and we'd still be over $1 trillion away from a balanced budget.
3) Regardless of tax rate, revenues have remained relatively stable as a percentage of GDP over the long term. The correct tax policy is the one that promote growth, not increase marginal rates. More money taxed = more money hidden from the economy. At best rich people are smarter than the IRS and put money in tax shelters. At worst they simply buy your favorite politician so tax laws don't affect them.
Taxing the rich at a higher rate sounds wonderful and full of righteous justice, and may make people feel better, but it does nothing except hurt growth and therefore tax revenue.
Quote:
2) Yes. And corporations shouldn't be "people". It's a joke.
Corporations do not pay taxes, people do. Taxes laid on corporations can be paid by three groups of people:
1) The investors through lowered profits/dividends/stock value, etc.
2) The employees through reduced pay, benefits, amenities, resources, etc.
3) Or the consumer through increased prices.
You get three chances to pick the right answer, and the first two don't count.
Since taxes on corporations are also laid on their competition, there is no competitive advantage to NOT passing it on. So you want to tax corporations at a high rate? Congratulations, you just gave yourself a hidden value added tax and lost jobs overseas.
Now that's if they pay taxes at all, which many don't, but in that case what is the point of raising taxes they don't pay? Answer: Social justice a great political tool even if it's lousy in practice.
3) Regardless of tax rate, revenues have remained relatively stable as a percentage of GDP over the long term. The correct tax policy is the one that promote growth, not increase marginal rates. More money taxed = more money hidden from the economy. At best rich people are smarter than the IRS and put money in tax shelters. At worst they simply buy your favorite politician so tax laws don't affect them.
This point can't be overstated... it's hardly ever addressed in the mainstream media.
Spooky Obama
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