Posts tagged Tax cuts
Posts tagged Tax cuts
John Walsh gets political on America’s Most Wanted on Dec. 17th, 2011. He begins by talking about how we’re balancing severe cuts on the backs on teachers, firefighters, police officers, and others who contribute greatly to society and asking nothing of those who’ve benefited.
And then shit gets real. An excerpt from Walsh’s statement, courtesy of Crooks and Liars:
Wow. America’s Most Wanted host John Walsh has an earful about cutting the government to spark economic growth this week. He notes letting police and firefighters go is bad for our communities. Flint, MI which laid off two-thirds of its police force, according to Walsh has become a “small city murder capital of the U.S.”
But then, Walsh goes full Occupy.
"Who’s going to pay for the economic meltdown - the huge debt?" He says, "How about companies? Companies that have made more money than in the whole history of the world and they’ve done it with less people. Some of the Fortune 500 companies pay no state taxes at all. We all know about GE not paying federal taxes."
And he continues to rail on this conservative cure-all for our economic woes: “It’s a quick fix but it’s not a good fix. We got to make the corporations pay more money and we can’t let these people [police] go. You got to speak up.”
America’s Most Wanted now airs at 9 p.m. on Friday on the Lifetime channel. Is it just me, or does John Walsh lay out a fantastic defense for those who are against cutting vital services so others can have an even more obscene amount of wealth?
To detractors: I’ll stop supporting movements like Occupy Wall Street when corporations stop occupying Congress. It’s not that I don’t think people should be rich. I just don’t think they should be able to buy themselves a pet Congress.
I’ve said it before, and I’ll say it again: Tax the rich. Now.
When even conservative economists are calling for taxes to be raised on the rich, maybe it’s about time. We’re living in this delusional la-la land, where if Warren “El capitalismo espectacular” Buffett suggests raising taxes on the rich, he’s a socialist. If the economy has hope of ever rebounding, spending cuts are not the only answer. We must also raise revenue. The
temporary Bush tax cuts must be allowed to expire.
The super-rich must not be allowed to hold the economy hostage any longer. One percent of the country cannot, logically, dangle the futures of the other 99% off of a cliff without an outcry… can they?
Former Sen. Alan Simpson told Lawrence O’Donnell it’s time to “peel all the layers of the onion” and figure out just why people seem to listen intently to Grover Norquist.
In an interview on The Last Word tonight, Simpson noted that Norquist had challenged Republican Sen. Tom Coburn on a $6 billion cut on ethanol subsidies he had called “tax increases,” which incensed Simpson greatly. “Grover and his happy band of warriors are trying to call that a tax increase– that’s a damn lie and he knows it,” he told O’Donnell. “And if he can get away with that, elect him President.”
Simpson continued to question Norquist’s power throughout the segment, arguing that “he can’t kill you, he can’t burn your house, he can defeat you in reelection,” and if a public servant thought the latter was enough to obey him, they didn’t deserve the spot.
He also told O’Donnell several times that “if Grover Norquist is more powerful than the President of the United States and the Congress, he should run for President” … On that note, Simpson called for an investigation. “Grover Norquist should be examined into– where does he get his money?” In times where people amass so much power, he argues, it becomes necessary to “peel all the layers of the onion.” “Anytime anyone gets this powerful,” he argued, “you want to dig in… who is he slave to?”
He clarified that he did not mean “salacious stuff and his personal life,” but how Americans for Tax Reform operated and why so many people in Congress feared him, because based only on his status as leader of an anti-tax group, “you must be chicken if you fall for that crap.”
I have a soft spot for former Sen. Alan Simpson. He’s part of the Reagan era, yes, and that’s where the accelerated sell-out of my generation began. However, he also has a streak of common-sense conservatism sorely lacking in the Republican Party. He’s pro-gay rights (including marriage) and pro-choice, which puts him to the left of nearly every Republican out there.
I agree with Simpson. Let’s find out where Grover’s getting his bucks.
Ben Stein, "In Class Warfare, Guess Which Class Is Winning?" The New York Times, November 26, 2006.
I’d like to point today’s GOP to Mr. Buffett’s nearly five year old quote, thank you very much.
Some perspective… look at the Bush-era tax cuts compared to everything else, including the wars in Afghanistan and Iraq.
Senator Bernie Sanders calls out President Obama for not supporting the middle class and bending to the Republicans too often.
Here’s a partial transcript:
"At a time when the richest people and the largest corporations in our country are doing phenomenally well, and, in many cases, have never had it so good, while the middle class is disappearing and poverty is increasing, it is absolutely imperative that a deficit reduction package not include the disastrous cuts in programs for working families, the elderly, the sick, the children and the poor that the Republicans in Congress, dominated by the extreme right wing, are demanding."
"Instead of yielding to the incessant, extreme Republican demands, as the President did during last December’s tax cut agreement and this year’s spending negotiations, the President has got to get out of the beltway and rally the American people who already believe that deficit reduction must be about shared sacrifice."
"Republicans in Washington have never believed in Medicare, Medicaid, federal assistance in education, or providing any direct government assistance to those in need. They have always believed that tax breaks for the wealthy and the powerful would somehow miraculously trickle down to every American, despite all history and evidence to the contrary. So, in that sense, it is not strange at all that they would use the deficit crisis we are now in as an opportunity to balance the budget on the backs of working families, the elderly, the sick, the children and the poor, and work to dismantle every single successful government program that was ever created."
Sanders also called on Americans to send a letter to Obama, urging the President to end tax breaks for the wealthy and eliminate tax loopholes that benefit large corporations.
I made a summary version.
In conclusion, Bernie Sanders is a BAMF.
A little perspective on what’s holding up budget negotiations in Congress. The GOP is refusing to buckle on further tax cuts for Charlie Sheen (well, his income bracket) and demanding education cuts, which result in more pay cuts for teachers.
This is not winning, America. This is losing.
Negotiators had reached tentative agreement on more than $2 trillion in cuts covering wide swaths of the federal budget, according to an aide familiar with the talks, affecting health programs, annual spending, benefits like farm subsidies and tuition aid, and automatic limits on future spending. But Democrats would not relent on taxes, the aide said.
Republicans have said from the outset that any tax increases will not pass the House. Democrats saw an opening, though, after many Senate Republicans supported a move to repeal a tax break for ethanol last week over the objections of anti-tax activists.
In recent sessions, Democrats had pressed to close a wide range of tax breaks, from oil and gas subsidies to breaks that benefit wealthy individuals.
That’s right, kids. Democrats are offering to sacrifice the poor on the altar of ideology in exchange for teeny sacrifices from the rich and corporations in the form of their taxes going back to rates from the Clinton era. You know, before the
temporary Bush tax cut package. The GOP is willing to risk US default over this. Remember this in 2012.
So, in the state of Kentucky, where former Senator Jim Bunning (and Senator-Elect Rand Paul), have insinuated the unemployed are living in the lap of government luxury, the maximum unemployment benefit check is $415 a week. That’s roughly $19,920 a year. According to the CBO, these benefits can make up to 60%+ of a family of four’s income when the primary earner is laid off, if the family has another source of income as well. It can even be the full income for some families.
The federal poverty rate for a family of four stands at $22,050. That’s at 100% poverty. So if a family of four is unable to take in any additional income through other means, the unemployment benefits (if receiving at maximum level) still aren’t enough to keep them out of poverty.
Lap of luxury, indeed.
Further, each dollar of benefits spent by the federal government can generate up to $2 back into the economy. So it’s fiscally smart to continue the benefits to spur economic growth. The tax cuts are not a predictor of economic stimulation because there’s no guarantee that the windfall won’t just be saved, invested, etc. Anyhow, the rich have had nearly 8 years of the tax cuts, why didn’t they create the jobs then? The anecdotal story of people bragging about receiving unemployment is convenient but does not stand up to actual facts.
This was spurred by an anon message I received that Tumblr ate. It’s copied from my email below:
"I get people are out of work. But when do we just say ‘no more from the government tit. Get off your ass and get a job, we’re not paying you to sit at home.’ The tax cuts give rich people the ability to create jobs for poor people. Duh. Some libtards are too stupid to argue with. I live in Kentucky an there’s bitches who brag about getting unemployment an being paid not to work while my tax dollars feed their bastards. Suck on that."
Your whole argument reeks of classism, ableism, misogyny, and just plain asshattery. I hope this answers your psuedo-question and I hope you never find yourself out of work, assuming you are working right now.
Click on the chart to make it bigger.
1. Cutting Taxes Leads to More Money for the Government
It’s complete nonsense, and it’s worth noting that only conservative politicians and pundits make the claim - economists across the ideological spectrum agree that the argument is cursed by voodoo math.
As Time Magazine’s Justin Fox noted in 2007, “Every economics Ph.D. who has worked in a prominent role in the Bush administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves—and were never intended to.”
2. Conservatives’ Favorite Economist Proves the Point
That falsehood is based in large part on an abuse of “Laffer’s curve,” the conservative media’s favorite economic theorem. The idea is pretty simple. It holds that you can raise income taxes to a degree, but when the top tax rate exceeds a certain point, people will go to such extraordinary lengths to avoid paying the piper that the government will actually end up collecting less revenue.
When Dylan Matthews asked a number of experts where the Laffer Curve “bends” for the Washington Post, the economists (he asked some conservative opinion columnists as well) all agreed that a top rate of 50 percent – several went as high as 70 percent – would still fall below the curve. That’s important to keep in mind as we debate the merits of letting the top rate return to the 39 percent that prevailed during the Clinton years.
3. Taxes on the Rich Keep ‘Wealth Producers’ from ‘Creating Jobs’
We’re all familiar with this one. In a New York Post column last week, Fox Business columnist Charles Gasparino claimed that businesses have “been hoarding cash instead of hiring” because of “the likelihood for higher taxes.” Media Matters responded by citing the CBO’s finding that “[I]ncreasing the after-tax income of businesses typically does not create much incentive” to hire.
What’s noteworthy about the narrative is the degree to which it defies simple common sense. It shouldn’t be a matter of debate that only one thing creates jobs, and that’s demand for companies’ goods and services. The idea that a business that was booming would refuse to hire people and forego expansion because top tax rates might nudge upward is as silly as the idea that a business that has no customers would add new employees because its owners expect taxes to be low.
4. The Opposite: Tax Cuts for Upper Earners Spur Job Growth
Demand creates jobs, and U.S. demand is way down because American households lost around $15 trillion dollars in wealth during the downturn. So it’s important to note that research has shown that when you give a tax break to high-earners, they bank it, and when you give relief to working people, they spend it, increasing demand.
Like other types of public spending, giving cuts to those at the top does stimulate the economy, but very, very badly. According Mark Zandi, chief economist for Moody’s, a dollar in tax cuts on capital gains adds .38 cents of economic growth and a dollar in corporate tax cuts brings us just .30 cents worth of stimulus, but a dollar in unemployment benefits gives the economy a boost of $1.63 and a buck worth of food stamps adds $1.73 in stimulus (PDF).
5. Only Half of American Families Pay Taxes
Rush Limbaugh put it this way: “The bottom 50 percent is paying a tiny bit of the taxes…. Remember this the next time you hear the ‘tax cuts for the rich’ business. Understand that the so-called rich are about the only ones paying taxes anymore.”
That’s an entirely false narrative that emerges from some rather transparent sleight-of-hand. You have to look at the federal income tax in isolation and then pretend that it represents the government’s entire take. But the reality is that the government isn’t financed from federal income taxes alone – far from it. Payroll taxes, for example, represent the biggest tax bite for the average worker.
When you add it all up—state and local taxes, federal taxes, sales taxes and excise fees—it turns out that the rich, the poor, and those in between all end up with about the same tax rate.
6. Americans Are Taxed to Death
This is one of those claims made so frequently that it becomes a matter of faith. But faith doesn’t rely on fact, and this one is totally untrue.
In 2008, we ranked 26th out of the 30 countries in the Organization for Economic Cooperation and Development (OECD) in terms of our overall tax burden — the share of our economy we fork over to the government. The U.S. came in almost 9 percentage points below the average of the group of wealthy nations, and some 20 percentage points below highly taxed countries like Denmark.
7. We’re Being Killed by Runaway Government Spending
Public spending has increased with the wars in Afghanistan and Iraq, and, temporarily, with the stimulus package. And it will rise in the future as more baby boomers retire. But beyond that, it’s important to understand how “limited” our government really is relative to other wealthy countries.
Sabina Dewan and Michael Ettlinger of the Center for American Progress crunched the data and found that between 2004 and 2007, the U.S. ranked 24th out of 26 OECD countries in overall government spending as a share of our economic output.
8. Conservatives Favor Low Taxes and Limited Government
The Right loves “Big Government” as long as it’s pursuing their preferred agenda. What they don’t like are the government’s most popular functions – assuring a social safety net, protecting consumers and the environment, subsidizing education, etc. They don’t want to debate priorities, so they claim an ideological preference for a smaller government while showering tons of money on the military, law-enforcement, corporate subsidies, etc.
That’s why the share of the economy represented by government spending (at the local, state, and federal levels combined) has been remarkably consistent during the last 40 years or so, regardless of which party controlled the White House or Congress.
In the two years that Gerald Ford presented budgets, government spending as a share of GDP averaged 31.4 percent; in ultra-liberal Jimmy Carter’s four years, it dropped to 30.7 percent; Ronald Reagan, the patron saint of fiscal conservatism, came into office, and it rose to 32.2 percent. It nudged slightly higher during the first George Bush’s term in office, then dropped to an almost Nixonian 30.3 percent during the Clinton years, before rising to 31.6 percent during the second Bush administration.
Looking at the other side of the ledger, overall government revenues have also remained relatively stable, but the pattern is reversed. The government’s take, as a share of GDP, dropped during the Ford era, rose again under Carter, and fell again under Reagan. Revenues rose by almost 2 percent under Clinton and fell by a percent and a half under George W. Bush.
Although the government taxes and spends at fairly similar rates, under Republican leadership the nation shells out a bit more for government services and takes in just a bit less in taxes. With a $15 trillion economy, those little differences add up to pretty big deficits, and this, rather than hot school lunches for poor kids, is responsible for a large chunk of our federal debt.
9. Taxes on Top Earners Are Actually Taxes on ‘Small Businesses’
For years, Republicans have pushed the spin that most of the Bush cuts for the highest earners were going to “small business owners,” the proverbial lifeblood of Small Town U.S.A. Then Republican national committee chair Ed Gillespie launched the meme in a 2003 speech, saying that “80% of the tax relief for upper income filers goes to small businesses.”
Fact-check.org, the nonpartisan campaign watchdog, looked at the claim, which was cooked up by GOP staffers on the House Economic Committee, and concluded that “it’s untrue—and a classic example of a statistical distortion gone amok.” The lie is pretty simple: around 80 percent of the wealthiest Americans report some business income on their tax returns, either from private partnerships (think big law firms) or from “hobby” businesses. And the GOP committee counted everyone who reported even a dollar on Schedule C of their returns as a “small business owner.”
The reality? Less than 2 percent of tax returns reporting small-business income are filed by people in the top two income brackets. As a Washington Post analysis concluded, “If the objective is to help small businesses, continuing the Bush tax cuts on high-income taxpayers isn’t the way to go — it would miss more than 98 percent of small-business owners and would primarily help people who don’t make most of their money off those businesses.”
Posting nearly in full for truth…
For affluent Americans outraged by the fiscal and social consequences of tax cuts handed to them by President George W. Bush and recently extended for two more years, a trio of similarly dismayed academics has furnished a way for them to put their money where their mouth is.
Their new website, giveitbackforjobs.org, invites high-income Americans to calculate the value of their tax cut under the extension and then pledge to donate that money directly to charities that the site says encourage “fairness, economic growth, and a vibrant middle class.” The site doesn’t accept contributions directly, but links users to those charities.
The site has been engineered to offer Americans who view the tax cuts as misguided a means to personally direct dollars toward countering the effects, while also registering a protest for broad policies that have exacerbated economic inequality.
"It’s like civil disobedience," said Daniel Markovits, a professor at Yale Law School, and one of the three academics behind the initiative. "You’re not committing a crime, but the government says, ‘This is what you should give,’ and you’re saying, ‘No, I should give more.’"
This just made me happy.
One year after electing a Tea Party candidate, one of the wealthiest counties in America is broke.
MINEOLA, N.Y. — Facing a huge budget deficit when he took office in January, Nassau County Executive Edward P. Mangano did not impose a hiring freeze. He did not stop borrowing to subsidize some of the richest school districts in the country. He did not eliminate the Police Department’s beloved mounted unit.
Instead, Mr. Mangano, a Republican who won one of the first upsets of the Tea Party era, did what he had promised: He cut taxes, adding $40 million to the county’s deficit, which has since reached nearly $350 million.
Now, with its bonds suddenly downgraded and a state oversight agency preparing to seize its checkbook and credit cards, Nassau is on the verge of a full-fledged fiscal crisis.
Okay, so Nassau already had some problems, and the whole county isn’t super rich, but seriously. How’s that borrow-and-spend trickle-down economics working out for you guys?
Wow. Who would have thought that cutting taxes and bringing in less revenue wouldn’t work? I’m looking at you, Colorado Springs.
By Felix Salmon
Stephen Culp has another striking chart today.
This chart should be ingrained in the mind of anybody who cares about fiscal policy. The main things to note:
- Federal taxes are the lowest in 60 years, which gives you a pretty good idea of why America’s long-term debt ratios are a big problem. If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke.
- Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
- Employment taxes, by contrast—the regressive bit of the fiscal structure—are bearing a large and increasing share of the brunt. Any time that somebody starts complaining about how the poor don’t pay income tax, point them to this chart. Income taxes are just one part of the pie, and everybody with a job pays employment taxes.
- There aren’t any wealth taxes, but the closest thing we’ve got—estate and gift taxes—have shrunk to zero, after contributing a non-negligible amount to the public fisc in earlier decades.
If you were structuring a tax code from scratch, it would look nothing like this. But the problem is that tax hikes seem to be politically impossible no matter which party is in power. And since any revamp of the tax code would involve tax hikes somewhere, I fear we’re fiscally doomed.
Individual taxes have taken a dramatic dip, but I find the corporate tax structure flat-out offensive.
The Estate Tax (which was given an Orwellian rename by the Republicans as the “Death Tax”) does and will not hurt you — unless it is abolished.
The Estate Tax affects only 3/10 of 1% of the richest Americans. We’re not even talking about the wealthy here, we’re talking about the OBSCENELY wealthy here.
To put this in context, if the Republicans get what they want, it would mean $30 BILLION in tax cuts for the Walton family (who own Walmart) alone.
So they barely pay their workers a living wage and abuse them in a hundred other ways, drive multiple small businesses out of the marketplace which are major drivers of economic growth in the country, and the Republicans in the Senate and an all-too compliant President Obama, want to rewards them for all that by giving them a tax cut that is more than the gross national product of some of the nations of the world.
For anyone to look at that and NOT think that is radically out of balance, is simply insane.
Click through to read more.
Read it. Please.