November 23, 2012 - 2:57 am
House Republicans must decide whether to raise taxes on the rich or not. Should the GOP give Obama what he wants just to prove to America that his economic policies won’t work? Find out as Trifecta discusses the looming fiscal cliff.
It doesn’t matter. The “rich” will just bribe Enough Congress critters to get some juicy loopholes inserted in the Tax code. The poor dumb smuck trying to get by will take it in the A55, but That is nothing new and he voted for it anyway.
“Should the GOP give Obama what he wants just to prove to America that his economic policies won’t work?”
Uh, TAP! TAP!TAP!!!, hello in there!!! I think something’s already been proven, just not in your favor. What Obama wants is a return of what did work. It worked for years and worked quite well. When things turned sour was shortly after the Bush tax cuts. As a rule, the economy rebounds yet has stayed rather stagnant this time. The only difference is that those tax cuts are still in place. So go figure.
The theory is, I believe, that lower taxes, particularly for the most wealthy, results in higher profits which means more investments and higher wages, trickling down to smaller businesses who will enjoy the same. That sounds pretty nice but the reality is that businesses have enjoyed the lowest tax rates in history for over a decade. The reality is that the upper wealthy have made record profits and sitting on more liquid cash than ever in history. I’m not making this up and it’s not some “lefty talking points” but rather the cold hard facts.
And good lord spare me the Confidence Fairy theory. Ten years of low taxes and high profits is proven pudding. Investments have always faced risks and they always will. There’s no way anyone can eliminate all risks and investors know that. So after 10 years of low taxes (or for as many as 30 Fortune 500 companies, NEGATIVE taxes while most of the rest saw near 1%) and record profits, what should be obvious to anyone of reasonable intellect is that they are not reinvesting because they don’t have to. With no tax liability, there’s no incentive to take risk or to put those huge profits back into the economy. Returning to the higher tax brackets will force high profit earners to invest as they would be in a “use it” (enhancing their business while stimulating the economy) or “lose it” (write the IRS a check) situation.
And that worked quite well for years building us a middle class and spurring technology.
you are a clueless piece of trash. the “BUSH TAX CUTS” caused an increase in revenue. more $ was generated during the BUSH YEARS than during the clinton bj years. thanks for playing you marxist pos
Libs are garbage, it amazes me why constructive arguments anger people like yourself. Then again, based on you screenname, I’m sure you can simply take on a new name and demeanor at will. But it doesn’t speak well for the side I’m assuming you speak for. Such hostility offers nothing to the debate.
While your argument that the Bush tax cuts increased revenue is partially true, it was a short term/short lived increase. You omit the fact that Clinton handed Bush a much higher GDP than what he had, offering Bush a robust economy which brings in more revenue. If you seriously want to compare the Clinton economy to the Bush economy, it’s fair to note that we saw 23 million new jobs under Clinton which pretty much went to hell in a hand basket under Bush. The GDP was higher when Bush took office than it was for Clinton. And please, if you’re going to used the debunked argument that the downturn was due to the Dem takeover in 06, please offer one, just one piece of legislation that passed and was signed to support that claim.
But your argument is an aside from my point. I’m talking about how eliminating public sector taxes eliminates public sector investments, not revenue.
I meant to say that eliminating private sector taxes eliminates private sector investments, not revenue.
Clinton handed Bush a robust economy? Uh, no, he didn’t. He handed Bush an economy in recession. The tech bubble that had driven much of the economy during the Clinton years had burst (recall how much money, public and private, had been spent in advance of the dreaded Millennium Bug, something that turned out to be pure hype) and there were more bubbles waiting in the wings. The vaunted “Clinton surplus,” and the surpluses he projected out for years to come, were myths. One could certainly argue that the Bush tax rate cuts helped the economy recover and also helped ease the additional financial blow on 9-11.
Hmm, record profits yet little to no taxes (percentage wise at least) paid. Well, let’s see. Is that a tax rate problem? Why, no, no it isn’t. It’s a tax code problem, isn’t it? If those of you on the side positing that prosperity somehow trickles up would like to discuss tax code reform, those of us who understand it can’t do anything but trickle down would love to have that discussion with you.
Your colorful recreation of the Clinton era aside SukieTawdry, (albeit a 23 million job creation/surplus era), that trickle up/down discussion you want appears open. History pretty much speaks for itself, as I’ve repeatedly explained. The cards on the table today pretty much speaks for themselves.
When Clinton left office, the United States was on track to eliminate the national debt altogether by 2010, debt free for the 1st time in almost 200 years. Yes, there were obstacles but people of reasonable economic knowledge can point to the tax cuts, at a time of starting 2 of the most expensive wars in history, along with a GOP super-majority going on an unrestrained spending spree from hell as huge drivers. And these wars and spending sprees are still on the books, unpaid for.
It was the trickle up theory that brought us a strong middle class. The bottom pretty much fell out of that with the Bush tax cuts. After a decade, there’s no indication that those tax cuts are going to do as GWB promised- “Tax relief will create new jobs. Tax relief will generate new wealth. And tax relief will open new opportunities.” It didn’t happen and there’s no logical reason to think it’s going to happen. Even Mitt Romney couldn’t explain how his plan would add up. It was something like if you give more tax breaks to the top earners, sprinkle it with a dash of pixie dust, new high paying jobs will appear. Well, people didn’t buy that. But feel free to explain how your trickle down theory defies history.
On another point and going back to the original topic, I’d expect the GOP to fight this tooth and nail up to close to the 2014 elections. The reason being that we’ll likely see many business whining, raising prices, and crying layoffs, hour cuts, etc just as we’re seeing today over Obamacare. But the reality is that these guys are going to make money so they aren’t likely to cut their noses off to spite their faces. The layoffs and cutbacks will be short lived as either the business are profitable or not. Their prices are going to be contingent on the market. Today’s employers are operating as lean as possibly, paying as less as possible, charging as much as possible, and optimizing their profits as much as possible so there’s really not a lot of room for cuts or increases. If there were, they’d already be doing it. They will not hurt their long term production or profitability simply because they don’t like a policy. If the GOP caves now, voters won’t likely remember anyway and the economy will be stronger then (under Dem leadership). If they wait, giving the voters what they want will be fresh on everyone’s mind along with a lot of disgruntle wealthy business owners that the GOP can blame the Dems for.
“When things turned sour was shortly after the Bush tax cuts.”
Nah, Ronald, when things turned sour it was with the implosion of the Gov’t Sponsored Housing Market Bubble; which was the result of massive Gov’t Spending through the Government Sponsored Entities, Freddie Mac and Fannie Mae, who borrowed unfettered from the Fed at its discount rate, and would then buy up as much “bad paper” as could be produced by the loan originators; thereby creating a gigantic market for “bad paper” at the point of loan origination, again because Freddie and Fanny would buy up as much as was produced by the loan originators, relieving them of any financial risk.
As Thomas Sowell remarked, given also the threats of the Gov’t charging the loan originators with “red lining” minorities and the bad-for-business PR from ACORN demonstrations, ~”The obvious solution was to lend money to everyone!”
And the mostly Democrat F&F Execs would actually get a performance bonus for borrowing low and loaning higher on the obviously “bad paper”. But the bubble simply had to burst, suddenly decreasing housing wealth massively and leaving many people “underwater”, stifling new home construction, leaving taxpayers on the hook to pay off what were essentially Government Sponsored Entity = U.S. Gov’t Bonds, and taking down or threatening to take down big “private” entities, including re-insurers, who had also participated in the scam but still held the “bad paper” risk.
Regulators, the Bush Adm., and others warned of the danger, while Barney Frank and Chris Dodd[?] of the Congressional Banking Oversight Committees said that everything was fine.
Jpenden, your argument has been haggled from every angle by folks from every spectrum. At best, I’ll concede that it’s a rational “contributor” to the crises but it falls short from a cut and dry analysis. I could elaborate extensively on that but that really doesn’t pertain to this thread or to my original comment. My argument is that the Bush tax cuts have proven to be an abject failure. To continue with these same failed policies will continue to erode our economy, regardless of how you feel it got this way.
“As a rule, the economy rebounds yet has stayed rather stagnant this time. The only difference is that those tax cuts are still in place. So go figure.”
Ronald, you sound genuine about what you say, but I guess you forgot about the ‘difference’ known as “Obama’s first term” and its attendant policies, such as the proven failure of Obama’s “Stimulus” Bill in terms of unemployment and GDP, when he predicted the opposite effect from the Stimulus – even in the presence of the Bush tax cuts?
And ‘differences’ such as, 1] Obama’s war on fossil fuel energy with, for example, the subsequent doubling of gasoline prices; 2] Obama’s Frank-Dodd hyper-regulation Bill, increasing the cost of starting up and doing business; 3] The continued simple uncertainty of what Obama’s tax policy will be, which prohibits businesses from planning what to do going forward – including Obama’s strong demonization of profit itself, hence his not-so-subtle desire to tax essentially anyone who has a profit: for example $250,000 is not “rich”, it includes a great many small business job creators, and “taxing the rich” will not even get the Gov’t any significant tax revenue; 4] the Obamacare Monopoly, which is nothing but a gigantic mess for 1/6th of the economy and has already inhibited hiring and increased healthcare premiums; 5] Obama’s spending-driven trillion dollar deficits which have continued the U.S. on its path to “Greece”, and which reflect increased Gov’t spending as a substitute for or competitor with market-based spending – a proven recipe for failure which, for example, has already led to about 19 Gov’t funded “green energy” bankruptcies;……
It looks more like Obama now promises only to continue or even double-down on what didn’t work in his first term, throwing in “taxing the rich” as a panacea for those like him who don’t understand the wealth creation process which made America rich, and which must be present if people like him really want to “redistribute” wealth to begin with . Go figure.
With all respect JPeden, your talking points are typical distractions from the issue and your accusations are more hyperbole than rational. But being a sport, I’ll lay along with your distraction. Your #1 imaginary “war on fossil fuel” from your description equates to some hands down culprit of returning to the Bush era gas prices. That’s simply utter nonsense. The Obama era gas prices increases were a result of a rebounding economy along with lower U.S. gas demands. If your #2 refers to The Dodd–Frank Wall Street Reform and Consumer Protection Act, I’m not sure what your issue is as it reigns in on the very problems your mentioned earlier. I’ve already addressed your # 3 as it’s simply invoking the Confidence Fairy and after a solid decade of low taxes and high profits, that argument just doesn’t pass the smell test. What you overlook in your #4 is the deficit explosion of doing nothing on healthcare reform. And I could certainly elaborate on that one. I suppose your #5 “Obama’s spending-driven trillion dollar deficits” is a combination of Obamacare and the stimulus? The stimulus is an arguable package as there has been considerable and consistent job growth despite GOP obstruction.
But all of your Obama bashing does not address the rationale of extending the Bush tax cuts for the wealthy. Granted, $250K isn’t by any stretch wealthy (hell, it’s middle class by Romney’s definition) and I personally would prefer it being $1 million but that’s not the issue either. Your interpretation of the “wealth creation process which made America rich” is grossly flawed and defies history. History proves that we have the lowest corporate tax rates ever, corporations are making more money than they ever have, are they are sitting on more liquid assets than ever in history yet they are not hiring nor are they reinvesting in the economy. And this has been going on for well over a decade so your claims of blaming Obama policies ring hollow.
Ronald, imo your responses to my points are simply “not responsive”. For example you say,
“The stimulus is an arguable package as there has been considerable and consistent job growth despite GOP obstruction.”
As I understand it, the still inadequate job growth recovery started before the Stimulus. Regardless and as I mentioned, the Stimulus did not work as advertised by Obama. In fact the opposite occurred: unemployment went to well above 8% and topped 9%, which is what Obama alleged would occur if his Stimulus was not employed.
Therefore, in effect Obama’s Gov’t spending-based Stimulus hypothesis for job growth has been soundly disproven, perhaps also given the existence of his other job and GDP-stifling policies, some of which I mentioned above.
The GOP was in no position to “obstruct” Obama’s Stimulus, therefore that simply did not happen. Moreover, only about 6-8% of the Stimulus went into “infrastructure” jobs, and the GOP certainly had nothing to do with that. Obama admitted that he couldn’t find the “shovel ready” jobs he assured us were present. What else doesn’t he know about creating jobs?
Where indeed are the Stimulus jobs? The “green jobs” specifically promised by Obama as the method for future job creation in America did not materialize. And they won’t without continued massive tax and rate payer subsidies precluding the 19 “green energy” bankruptcies engineered by Obama’s policies, a fact which Europe has already proven over the past 15+ years – along with the failure of wind and solar to replace any significant % of conventional energy, if only because wind and solar must always be backed up by conventional energy sources such as fossil fuel given the many periods when the Sun does not shine and the wind does not blow. As a result, Germany is going heavily into coal-fired electricity plants as we speak.
Meanwhile, Obama is still touting “green energy”, now including Algae! Given his first term record, I believe him: he wants to repeat his “green energy” failures or something similar on the basis of other wishful fantasies. And he’s still obstructing oil supply from deep water drilling and limiting access to Federal land. He still hasn’t approved the pipeline bringing the Alberta tar sand oil South to the U.S. with its increased secure supply and jobs.
But you instead apparently want to solely blame the Bush tax cuts for the failure of Obama’s policies to create jobs and wealth, and therefore you seem unduly fixated on “taxing the rich” as the only answer. When “taxing the rich” seems to me to be only some kind of undying Marxist fetish, that is, until it comes to pass that as wealth disappears due to an increasingly Gov’t dominated, centrally controlled economy, anyone with anything is “rich”.
Let me reiterate that your 6 item response was and still is no more than a distraction from my point. It’s rather commonplace to see bloggers like yourself steer the conversation in a different direction when they cannot argue the real issue on its merits.
My argument is quite clear: the Bush tax cut were an abject failure. They did not work, will not work, nor have they ever worked historically. GWB promised us that “Tax relief will create new jobs. Tax relief will generate new wealth. And tax relief will open new opportunities.” You seem to want to counter that by saying something like “uh, well, yeah, so Obama promised <8% unemployment so, uh take that!", or something. Granted, I played along with your sophomoric diversion and my responses were vague but we could spend pages and pages arguing those distraction.
But distraction don't seem to be enough for you as you seem more interested in rewriting your own history and creating your own facts. Your understanding of the job recovery beginning before the stimulus is indeed flawed. The stimulus passed in Feb 2009 and monthly job losses then began to slow and job gains picked up. Job gains slowed in the spring of 2010 as a result of the European debt crisis, the running low on stimulus, and government cuts.
Along with my argument that top tax breaks restricts reinvestment to the economy, here's some more food for thought. The Bush tax cuts were implemented at the onset of 2 wars, something historically unheard of. Looking back, Abe Lincoln raised taxes to pay for the Civil War, as did McKinley to offset the Spanish-American War as did Wilson for WWI (a whopping 71% top earner tax at that). If we sift through the legislative archives, we'll see taxes were raised repeatedly as a direct result and in order to pay for WWII, Korea, and Vietnam. Even Poppy Bush understood the ramification of the the cost of the Kuwait invasion and risked and lost his reelection by breaking his "read my lips" promise to raise taxes in order to slow an exploding deficit. Iraq to keep the deficit from spiraling out of control. This is simply something that responsible leaders from both parties understood.
It's without precedents to see lawmakers start 2 expensive wars and then slash taxes, only to go on what many have referred to as the 109th GOP Congress "drunken spending spree". What's even more ironic is that just 2 weeks after Obama's inauguration, we had the emerging of the Tea Party, who sat silently on their hands during that GOP spending spree, complaining something about too much Obama spending and something about being "taxed enough already" while enjoying the lowest tax breaks in 60 years. Once again, go figure.
Let them expire. Let them all expire. There is no such thing as a tax cut for someone who doesn’t pay taxes, but we hear the media generated fallacies all the time. Tax cuts for the poor, or the middle class. Bollocks! The government takes and uses the money to buy more votes. The entitlements are out of control. The people wanted Marxist in Chief, and then they get him. Stop letting the fed manipulate inflation. When housing interest rates are up to 20% again, circa the late 70s, and gas is $10 a gallon then MAYBE, the idiots in this country will wake up. If not, then look to Detroit as the new model of urban “renewal”.
I observe three things about the United States
1) The wealthy (white) upper class (1%) voted for Obama (this is the Hollywood rich, the New England and New York wealthy, the California moguls, etc).
2) They really do not pay much taxes
3) Why would American conservatives (mostly middle class whites) who voted Republican, protect these Leftist upper classes from the consequences of their votes?
As an aside — American WAS a centre right nation. The new coalition between the White Left and growing minorities will define American politics for a long time to come — it may even be permanent. America is now a Leftist nation, permanently. Why would what remains of the quickly shrinking middle class centre right fight against President Obama’s taxes to protect the wealthy left?
Outsider:
Newsflash: The “wealthy (white) upper class (1%)” did not elect Obama. Some of them may have voted for him, but certainly their votes did not win the day. What actually tilted the election was a coalition consisting of large majorities of Black, Hispanic, young and women voters who were hoodwinked into voting not on the economy, but social and, yes, racial “issues.”
BTW, everyone will feel the consequences of Obama winning, whether they voted for him or not. What do you mean by “not pay much taxes?” Do you have some special insight into how much these people pay in taxes?
Finally, I don’t think most true conservatives believe in singling out any group (wealthy left) for punishment based upon their voting stupidity. We believe everyone pays too much in taxes and the problem is one of spending and not revenue.
Mr Skeet shooter — I understand your sentiments, but perhaps I do not quite understand the American mind.
Warren Buffet himself complained about his own low tax rate. So did many extremely wealthy people funded and raised funds for Mr Obama, it was not only Mr Soros, but also Spielberg (and many other Hollywood moguls) amongst many other famous wealthy people. And if they do not fund Mr Obama, then they fund leftwing projects and causes — the foundations of some very wealthy people are funding a wide array of leftwing projects which have consequences far beyond the borders of the United States.
Mr Obama himself referred to the Buffet rule when talking about taxes for the wealthy. And Mr Buffet himself seemed to think that the wealthy should pay more. Much more.
Why would you go out and defend Mr Buffet against the rule he himself apparently promoted?
BTW: I believe that the Republican push against higher taxes for the wealthy cost Mr Romney the election — and so it is the middle classes who are now paying the price because they set out to protect the very rich against tax increases (while the rich give money to Mr Obama, regardless). Something here does not rhyme.
BTW, the alliance of the wealthy North-Eastern and West-Coast white upper classes and minorities cemented Mr Obama’s victory, as you point out. This seems to be a new and permanent outcome — America is now a leftwing country.
So again I have the question — why would the white middle classes who voted for Romney forsake what is in their own interest in order to protect the very wealthy North Easterners and West Coast Liberals (who sided with Mr Obama) against themselves? Why not focus on the economic conditions of people who do vote for the Republicans (mostly white middle classes), and let the wealthy look out for the themselves (and let Obama tax them heavily as the price for the fact that they funded and supported him)?
I don’t “defend” Warren Buffet or any rich left wing Hollywood Moguls. If they believe they are taxed too low, then they are perfectly able to send a check to the government where it will be duly wasted. I do not believe in confiscating wealth simply to assuage class envy or because I happen to not agree with someone politically. Our government is simply too large and wasteful and needs to be drastically scaled back. We should not be arguing about paying more taxes when all of us who pay taxes are already paying far too much. I voted for Romney simply because he happened to be the far lesser of two evils. My ideal candidate would have been Dr. Ron Paul. My “American Mind” happens to be centered on personal responsibility, liberty and a small government. All of which we are losing.
Huh? Will GOP allow to raise taxes? Will Sun rises tomorrow?
The A. to both is yes. Why you are asking Q.s with obvious A.s?
The GOP should suggest this idea during the negotiation of taxes with the Obama administration:
Increase the tax rate on everyone whose income is above $250000 but only on those living in a Blue State. Those people, by their voting habits, have shown that they want increased taxes. Those living in Red States, by their votes, have shown they don’t want increased taxes so they should be absolved from any tax increase.
Democrats should be very happy with this idea. Salary levels in the Blue States far exceeds those in the Red States, so increased taxes on them would result in a redistribution of wealth from the Blue to Red states. I’m sure this is exactly what Obama wants.
If you’re going to do this, then do it right. The message is: we’ll give you all of the taxes you want in one increase. One time only. But we will never raise the debt ceiling again. So be careful what you ask for, because if the government shuts down, we’re not going to save you.
The R (or stupid) party will hand the might kenyan tax hikes for everyone. The ultra wealthy have by now shielded their holdings from any serious assault. We’ll not comment on the idiotic statements of poltroons such as Buffett who is certainly free to send additional lucre to feed the insatiable federal maw.
What should GOP do, and how should they do it? I think it’s clear that they will have to play to the President’s tune when it comes to taxing the top 2%. Why? First, because quite frankly the fiscal cliff scenario is palatable to the President and unpalatable to them. He can acquire much larger short term revenue by taxing everyone, he can reduce necessary spending in Medicare and the military and all of the negative consequences will be easily blamed on the GOP congress. So for the GOP this is an unacceptable outcome.
They have backed themselves into this corner by agreeing to the fiscal cliff scenario and the President will happily call their bluff.
So the next question is how should they do this? The GOP has a couple of advantages: Obama is wrong, and he is evidently uncompromising and a bully. The GOP should not merely say that they disagree with the President, but are going to follow him anyway. This is stupid and wrong. Instead they should tell the truth. They need to tell the American people over and over again that they believe the President is in favor of going over the fiscal cliff. He wants to raise everyone’s taxes. He wants to cut their Medicare and their national security. All of which so he can fund his irresponsible discretionary funding habits. And the GOP will have no shortage of proof to defend this narrative. The GOP must make it clear that they cannot negotiate a better tax policy than to raise taxes on the top 2% because the President has already said he will not negotiate this despite knowing that this is e very point of contention. In other words it is evidently true that Obama would rather go over the fiscal cliff than listen to the arguments of those who think it is unwise to raise taxes on the job creators. Put him on the defensive for being obstinant to the voice of Americans. If they can gt this message across, Obama will own this policy and no matter what the outcome will be seen truly as one who cares more about defending his ideas than defending what is good for the country.
What the GOP should do is oppose every bad policy that comes from the Marxist in chief, including those to raise taxes. The “fiscal cliff” is real but it’s mathematically impossible to avoid by raising taxes, even to 100% on the top 2% or top 10% for that matter.
History is the only teacher here. Make a deal to raise taxes with the socialists in return for spending cuts and you end up with higher taxes and more spending. . . read my lips. . .
Of course, since the GOP standard bearers in Congress are a bunch of pandering fools they will go along with raising taxes and share the blame for the ultimate failure of this policy.
Enough of all this liberal double talk. My gosh.
Can we suppose the “rich” include those people who have obtained their wealth in government “service”, i.e. the Obamas, the Kennedys, the Clintons, the Gingrichs and sundry other “servants of the People” with their enablers and campaign contributors? Whose service to the “community” has been entirely self serving. OR their celebrity fans and cheerleaders in Media, education and Hollywood?
With the habit of robbing the People blind while the People either look the other way or line up wth hands out for whatever they can get of the “largesse” from the “public purse” managed by these same people,their allies, enablers and heirs? Who with their great knowledge and expertise of economics, work and production have now brought this erstwhile richest nation in history to bankruptcy.
OR are we to see the same principled activity as with the ACA in which Congress exempted Congress members from the penalties imposed in law on ordinary Amerians they “represent”? While Americans look the other way.
AND what sort of tax forgiveness or tax haven rights are these public servant with their enablers to have built into any law proposed for “fairness, equality and social justice”? Another of those laws “We’ll have to pass to know what’s in it”?