Friday, April 01, 2011
Why soaking the rich cannot possibly solve our gargantuan national fiscal problem:
So what you are saying Bill, is that when Michael Moore made the allegation that the rich were hoarding all of our money, he was ignorant of the truth, or lying. Is that what you are saying Mr. Whittle?
It has nothing to do with solving budgetary problems or raising tax revenue and everything to do with punishing "the rich" -- which seems to be anybody earning more than, say, a member of Congress or a full professor at a flagship university. Read The Daily Kos and they will tell you what they want.
I am all for spending cuts, and as a moderate I very much want them to begin with taking on the entitlement collosi of Social Security and Medicare, which disproportionately benefit the middle class.
But, the one thing that Mr. Whittle and indeed all conservatives fail to mention is that, prior to the advent of Social Security in the 1940s and Medicare in the late 1960s, higher taxation rates on the highest marginal income did very well indeed in bringing a gradual close to the deficit spending that sustained the U.S. through the Great Depression and World War II.
The highest taxation rate under President Eisenhower was 90%, only lowered to 70% with the advent of President Kennedy. Likewise, the taxation rate on capital gains was at one time as high as 60%.
Despite this fact, the U.S. remained a land of promise and technological innovation, with many immigrants coming from Asia, Europe and elsewhere to make their fortunes here.
I just think both hard-left and hard-right are wrong here, and that a combination of some small tax increases accompanied with real decreases in our entitlement spending and/or raises in the age at which one can collect Social Security/Medicare is necessary.
My opinion is not so different than Tigerhawk, who wrote recently that giving up ALL the Bush tax cuts AND cutting $800 billion in spending would be a good one-two punch in taking on our national debt.
The last poster compares apples to oranges on tax rates. I could go into dumb detail, but the short answer is that the USA has taken in about 18% or so of GDP in every year since WWII, despite the tax regime we've had in place in any particular year -- until the last three years when we've been running about 14% -- this drop alone should be sending off warning bells.
He also forgets that the current Obama budget already assumes that the Bush tax cuts will expire in 2012, yet Obama's budget stills projects greater than $1 trillion deficts until the end of time.
The “rich” are rich because they own shit. Folks who get “really well off” from IRS ordinary income are actually rare, e.g., Charlie Sheen. Warren Buffet will never pay a dime of “ordinary income” – that’s been his life’s mission.
If you really want to “tax the rich” it would mean that you’d have to expropriate. That means taking the wealth that’s the source of the income. But that would mean you’d have to be responsible for running it. He he.
You could take all the wealth of all our billionaires – wealth, not income – and not cover a year’s worth of our current deficits.
Obama doesn’t plan to go after capital gains, which is good in a narrow sense, but diabolically bad in another. He wants to go after Joe the Plumber. Thus, “tax the rich” will mean liquidating middle class Kulaks who have 1040 income. That’s the trajectory we’re on. It’s ineluctable, on current trajectory. But without the Kulaks, all is lost.
As an aspiring Kulak, I don’t know if the typical poster here is my political ally or not. I’ve long suspected that most who post here are “comfortable” and will go along so long as they think they always wind up on top.
Blow me. You're just asking for a grass roots populism that will burn down many establishment assumptions, especially if we go into “real crisis”, not just “buying opportunity crisis.”
Michael Moore's point stands, as does the underlying reason for the protests in London. When the financial ponzi scheme collapsed in 2008 governments across the developed world rushed to socialize the losses. Trillions of dollars have been spent to protect the interests of the wealthy. It is no accident that the U.S. budget deficit went from merely bad in 2007 to gargantuan in 2008 and every ensuing year.
Where in God's name would anyone get the idea that representative governments can allocate trillions to bail out wealthy bankers in 2008, then impose austerity programs and tax hikes to pay for the ensuing budget crisis? There's a reason those protesters in London are smashing windows in banks. Ditto for the Irish, and soon in Portugal, Spain, and Italy. US to come soon.
The Republican party is toast if they don't grasp this very basic principle.
simple, the rich employ us,not the poor.
in America you can be as rich as you want or as poor as you want.imho
it's the choices that we make that screw us up. i really believe that hard work will pay off, and as i have said to my kids, if you can't make it on one job work another, until you don't have to.if we are patient with what we want in life, children, homes, cars, etc. and give ourselves a chance to earn some money before jumping into debt,we can make it.
however, to make this work we need an administration that is pro-America and pro-capitalism and in general knows what they are doing.
we need to get rid of this administration that has torn our country apart. America has spent the last year in class warfare and race warfare. obama is a divider and remember, divided we fall, united we win. America can figure out our problems with the right people at the helm.