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Taxing “The Rich”

ISN’T IT COSTING EVERYBODY? In our current political climate, taxes and deficits have become a zero sum game … in more ways than one. First our politicians (and the media outlets that cover them) have totally forgotten that tax relief – particularly income tax relief – is an economic stimulant,…

ISN’T IT COSTING EVERYBODY?

In our current political climate, taxes and deficits have become a zero sum game … in more ways than one.

First our politicians (and the media outlets that cover them) have totally forgotten that tax relief – particularly income tax relief – is an economic stimulant, and that assessing the revenue impact of such relief cannot ignore said stimulus.  Hence our two-word answer whenever people ask how we propose paying for the income tax relief we incessantly champion.

“With growth.”

Of course that’s for “moderates.”  The best way to pay for job-creating income tax relief?

“With cuts.”

Because let’s face it – government at all levels is in dire need of draconian reductions like those proposed during the GOP primary by U.S. Rep. Ron Paul.

Anyway … the other zero sum game at work in Washington, D.C. is the class warfare premise that was instigated during the last election by Barack Obama.  Rather than being challenged, though, this argument was effectively co-opted by Mitt Romney, who made it perfectly clear that he was going to “close loopholes” on upper income earners in an effort to “pay for” his middle class tax cuts.

Yeah … that was the “Republican” in the race, people.

Here’s the problem with bleeding the rich … it bleeds jobs for the rest of us.  It never costs “yachts and private jets” (hey, Nancy Pelosi), it costs middle class jobs.

According to the U.S. Joint Committee on Taxation (a.k.a. Mark Sanford’s old stomping grounds), taxpayers making $250,000 or more a year – a.k.a. the “rich” – generate 53 percent of the small business income in this country.  Meanwhile a recent Ernst and Young study found that 54 percent of Americans were employed by companies whose owners file taxes individually.

Let’s assume for the sake of argument that those numbers are grossly inflated and that only a quarter of small business income (and a quarter of our work force) is derived from these individual filers.  We’re STILL talking about millions of jobs – and billions of dollars in income.

And Obama wants to take an axe to them?

Yes … in the name of “fairness.”

***

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38 comments

Nölff November 13, 2012 at 12:54 pm

Letting Bush tax cuts expire translates to “taxing the rich” to many people.

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Guero November 13, 2012 at 1:10 pm

You have to remember, this is all part of Billy Folks servicing Howie Rich and the rest of the plutocrats he suckles from.

He should at least wipe his chin….

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Ohmaar November 13, 2012 at 1:18 pm

Stop calling them the “Bush Tax Cuts”. Obama and his party extended them — twice. They’re the “Obama tax rates” now, except in January when they become the “Obama tax increases”.

Funny thing happens when you increase taxes on “the rich”. The rich leave. Or they simply stop generating income. They can — they’re rich. Then what do you have?

I’d rather have 10% of everyone’s income than 50% of no one’s.

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9" November 13, 2012 at 1:21 pm

I hear The Southern Baptists are going to be building Christian roads, bridges,fire departments and whatnot;no one will have to pay any motherfucking taxes,assholes!

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Tom November 13, 2012 at 1:28 pm

I am ready to go over the fiscal Cliff. Let the BUSH TAX CUTS expire. Let sequestration take hold. It will hurt but he deficit will be reduced. As for the Rich leaving, For some reason they have not left for the last century, even though their taxes are lower than they have been in fifty years.

“We’ve got to make sure that we are not the party of big business, big banks, big Wall Street bailouts, big corporate loopholes, big anything. We cannot be, we must not be, the party that simply protects the rich so they get to keep their toys.”

— Louisiana Gov. Bobby Jindal (R),

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Ohmaar November 13, 2012 at 2:47 pm

You sure about that? In 2011 a record 1,800 individuals renounced their U.S. citizenship.

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TOM November 13, 2012 at 3:30 pm

Don’t care. If they have no loyalty to this country, then we will just have to get along without them.

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Ohmaar November 13, 2012 at 4:06 pm

Without them and their tax revenue.

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Jan November 13, 2012 at 4:58 pm

Maybe, we will see. I suspect at some point they will want to invest in the US again.

But if not we will get by without their taxes as well.

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major boehner November 13, 2012 at 1:45 pm

It would be great if you could pay for tax cuts and deficit spending (two sides of the same coin) with “growth.” Unfortunately, the industrial digital revolutions ain’t walking through that door. The elected dumbasses have to learn to govern in a near zero growth environment. We humans now have an unprecedented ability to built a bunch of useful and useless shit. Ironic that we are nevertheless moving closer and closer to collapse in such an environment.

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Ohmaar November 13, 2012 at 2:37 pm

Never heard of Apple?

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The Artist formerly known as ? November 13, 2012 at 3:01 pm

People never learn.

They will be told that taxes will go up on the “rich”, but the reality is that it will be small business, the middle class, and the poor that will pay the majority of the increased taxes.

These fools never put 2 and 2 together. They clamor to slit their own throats. The rich and large business have the clout, money, & expertise to avoid whatever stupid plans the mostly incompetent pols devise(for those actually trying, the others will simply be on the take to grant the special exemptions to those paying them off).

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Colascguy November 13, 2012 at 3:10 pm

Do we really have a revenue problem? Seems to me we heard reports that we spent 1 trillion dollars on means tested benefits last year. That money was not for the programs of the third rail i.e. SS & Medicare. If we simply put Americans back to work we could balance the budget without a tax increase. You see if more people are working less people need means tested benefits. Not only that but those people working will now result in tax revenue instead of an outlay of benefits. Can we honestly say that the federal government effectively uses the 2.45 trillion dollars a year it currently gets from tax revenue.

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Junga November 13, 2012 at 5:33 pm

So Ohmaar let me see if I understand this…..if we raise rates on “the job creators” they will be cut back on the supply of the goods and/or services they provide. There will be customers demanding these goods and/or services and will not be able to purchase them because there will not be an entrepreneur willing to supply those needs? I have always thought that in a free market that supply would meet demand. I’m confused…..

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Frank Pytel November 13, 2012 at 5:50 pm

Supply will always meet demand, nearly always meet demand. If a producer decides to leave the country, they are not going to just pack the clothes in the closet and leave.

Machinery, stock, educated employees (engineers, scientists) and the like are going with them. When they arrive at their destination they simply set up shop and begin production again.

Apple produces nothing in this country. Home Despots lumber primarily comes from Canada. Cars are “Assembled in the US” (check the sticker next time you buy a car. How many parts/ what percentage of the car is/are “Produced or Manufactured” in the US.) Where do you think your fresh fruits and vegetables come from out of season? How about Fish and other meats?

Do you understand how the economy works?

Have a Great Day!! There won’t be to many left with Obutthead in charge. Yes I voted for him. Get over it REPUBLITARD!! :)

Frank Pytel

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Ohmaar November 13, 2012 at 5:53 pm

Problem #1: we’re in a recession. Customers AREN’T demanding their goods and services.
Problem #2: Businesses STILL aren’t sure the extent of new ACA regulations (because they’re still being written), they have no confidence in future expense projections so cannot risk investments in expanding infrastructure or hiring new employees
Problem #3: when businesses are already struggling to stay ahead, they and their customers are hit with the largest tax increase in history.
Problem #4: seeing that the largest tax increase in history is looming, liquidating all assets possible before the end of the year is VERY attractive

So smart money is saying cash out, ride out the storm, come back when economy bottoms (and thus prices bottom) buy in at the bottom and ride the recovery wave up.

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GaryDMN November 13, 2012 at 5:53 pm

So who will Obama blame for off-shoring the rich?

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Ohmaar November 14, 2012 at 8:30 am

It’s still all Bush’s fault. It’ll continue to be Bush’s fault until Americans stop accepting that lame excuse and start holding their current leaders responsible for our current mess. CLEARLY that time has not yet come.

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Junga November 13, 2012 at 6:07 pm

So we have a demand problem. Correct?
How will supply side economics fix that?
Cutting taxes on the rich so they increase supply?
Cutting taxes on the rich so they will purchase more?

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Frank Pytel November 14, 2012 at 5:27 am

No sir. You are not correct. We do not have a demand or a supply problem. The reason, the only reason, the economy is in the tank is because the gubmint is continuing its addiction to spending.

Its a very long drawn out process that takes decades to take hold. Eveyone I hear screaming BushyBushy, Cliton, Obutthead Obutthead just doesn’t get it.

You want it explained to you, email me. Alternatively contact an economist. Not one of those Kensian neomath shit heads. Contact someone that’s been around the block once or twice.

I’ve been around since Reagan. Voted for the fracking libtard whore. I have no love for either party. I woke up years ago to what’s going on. I quit watching a talking head tell me what to do on the nightly snooze years ago. Took me about 10 years of thinking for myself to get to where I actually understood the problem.

Have a Great Day!! There won’t be to many left with Obutthead in charge. Yes I voted for him. Get over it REPUBLITARD!! :)

Frank Pytel

conservative for obama at gmail dot com

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Ohmaar November 14, 2012 at 8:23 am

We definitely have a government spending problem. Every dollar spent by the government must first be taken out of the hands of consumers and business owners. Government spending is not strictly controlled by the traditional market forces that force businesses and consumers to demand efficiency, and thus is fraught with waste and abuse.
We have a demand problem because high unemployment means fewer consumers and tighter discretionary spending.
We have a supply problem because decreased demand results in overstocked supply, leading to increased storage costs and decreased prices. Decreased prices cut profits and lead to business closures and layoffs, exacerbating the demand problem.

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vicupstate November 13, 2012 at 7:26 pm

Clinton raised taxes on the wealthy and the economy soared and the deficit disappeared. The GOP predicted a recession that never came.

Every time taxes have been cut, the deficit has soared. So what will happen if we do the opposite?

As a percentage of GDP, taxes are lower than any time since the start of the Korean War.

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Ohmaar November 14, 2012 at 6:02 am

Oh dear Lord…

Clinton raised taxes and brought 20 years of the fastest economic growth in U.S. history to an end.

The deficit disappeared because Newt Gingrich sent 5 of Clinton’s budgets back to the White House and told him to do better. Gingrich even shut the government down to prove he meant business. (You don’t remember “The Gingrich That Stole Christmas?”)

A recession that never came? What were those famous “Bush tax cuts” for? To stimulate an economy that was headed into recession.

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Smirks November 14, 2012 at 6:13 am

The Bush tax cuts did result in a drop in revenue that never fully recovered. However, what really kicked our asses was that Republicans met that drop in revenue with increased spending. Two wars, Medicare part D, and other programs were never paid for.

The recession caused the same. Revenue dropped bigtime and was met by even more spending.

I simply do not agree that spending is the only thing that should be fixed. We need revenue as well. Granted, the stagnant economy will prevent revenue from returning to pre-recession levels, but ending the Bush tax cuts for the rich is a step in the right direction.

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Frank Pytel November 14, 2012 at 6:24 am

Your halfway there smirks. Keep trying.

Have a Great Day!! There won’t be to many left with Obutthead in charge. Yes I voted for him. Get over it REPUBLITARD!! :)

Frank Pytel

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Ohmaar November 14, 2012 at 8:07 am

Bush’s tax cuts were across the board, not just for the rich. That’s why raising taxes to pre-Bush levels is going to hit the lowest-income taxpayers the hardest.

A tax increase when the country is on the verge of a double-dip recession is an absolutely idiotic idea.

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TOM November 14, 2012 at 11:31 am

“What were those famous “Bush tax cuts” for?”

I don’t really believe they were designed to stimulate the economy. If they were, they failed. We had a surplus, the Republicans were in control, and they wanted to reward their major donors and supporters with something tangible, money.

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TOM November 14, 2012 at 11:38 am

Also, the Bush tax cuts being “across the board” is totally misleading.

If you want tax cuts that will stimulate the economy and benefit the vast majority of people equally, you expand the lower brackets. The Bush tax cuts were targeted to benefit the very wealthy.

They cut the top rates, they cut estate taxes, and they cut capital gains and dividend taxes, except for capital gains and dividends earned in IRAs and 401ks which were not reduced. All and all the very wealthy received massive cuts and the middle class received very minor cuts.

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Ohmaar November 14, 2012 at 12:27 pm

If you cut tax rates across the board, of course the people who pay the highest tax rates are going to realize the largest tax cuts. That’s just math. People who don’t pay taxes don’t get tax cuts. Go figure.

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TOM November 14, 2012 at 12:35 pm

That is only the case if you target the top for the biggest cuts. Clearly people who pay no income taxes (even if the other taxes they pay take up a higher percentage of their income than many who pay income taxes) will not benefit from a cut in income taxes. So if you expand the lower brackets, you still only benefit people who pay income taxes, but you benefit them all equally. Plus it is dramatically more stimulative that cutting the top rates.

I say go over the cliff and negotiate later.

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Ohmaar November 14, 2012 at 12:38 pm

““What were those famous “Bush tax cuts” for?”
I don’t really believe they were designed to stimulate the economy. If they were, they failed. We had a surplus, the Republicans were in control, and they wanted to reward their major donors and supporters with something tangible, money.”

Markets returned to pre-9/11 levels within 6 months following the stimulus provided by the Bush tax cuts. There has never been an economic recovery that quick in history. Unfortunately, Congress ALWAYS finds ways to outspend revenue increases.

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Frank Pytel November 15, 2012 at 4:29 am

Tom you are braindead. Read your own words and I know you’ll see it.

<>
“If you cut tax rates across the board, of course the people who pay the highest tax rates are going to realize the largest tax cuts. That’s just math.”
“That is only the case if you target the top for the biggest cuts. ”

WHAT?? Tom if you cut taxes 10%, across the board, everyone pays 10% less. If someone is paying 30k in taxes then they now pqy 27k. If someone is already paying 0K then they continue to pay 0K. Across the board does not target the largest earners. It targets all earners. How the hell do you pay less than 0% (although I do agree that the Demlicans and Republicrats have figured out how to do it. Can you say EIC? SSA?)

Tom, the idea is (the reality is) if you cut taxes economies do better. This can be seen in historical writings going back to pre Christian times.

Why the hell do you think Rome burned, tom? Hmm?

Maybe you should just stay off of the economics boards for a while. Stick to the Ben Gals and big boob blonde what’s her name.

Have a Great Day!! There won’t be to many left with Obutthead in charge. Yes I voted for him. Get over it REPUBLITARD!! :)

Frank Pytel

PS: Sic. How about putting up the real deal on the star stuff page. Geez man. I can go buy life jackets at stuffmart.

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hhhf November 13, 2012 at 8:31 pm

Is it the 250,000 salary of an individual or the 250,000 a business makes in a year?

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Ohmaar November 14, 2012 at 8:10 am

Individual. But since 75% of small businesses report their business income on their personal tax return, it’s both.

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TOM November 14, 2012 at 11:23 am

Only 3% of small business owners make more than $250k per year. That percentage is very near but slightly less than the economy as a whole. If the taxes are allowed to go up on people who make more than $250k per year, there will be no significant impact on small business.

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Ohmaar November 14, 2012 at 12:30 pm

But that 3% employ 93% of people working for small businesses. So while the tax directly applies to a small percentage of small business owners, it indirectly effects the huge number of individuals who work for them.

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Junga November 14, 2012 at 7:46 am

Thanks for the advice Frank…..I too voted for Regean. And I also have a bs in Political Science with a minor in Economics.

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Fred November 14, 2012 at 11:22 am

This whole idea tax killing jobs could not be further from the truth.

Everyone knows that rich folks have very smart lawyers and CPAs at their disposal that help them avoid paying taxes.

During the boom decades following WWII, the tax rate for the highest earners was 92%, yet businesses were profitable, the middle class had good jobs and wages increased annually.

But, since the 70s and 80s, businesses have become beholden to Wall Street. These days, business leaders care way more about paying dividens and keeping of stock prices high than they do about paying workers, who build their businesses, a fare wage.

Still, working class folks continue to eat up these lies. It’s pretty sad, really.

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