Know New Taxes
I warned before the 2008 election that regardless of the outcome, the reckless borrowing & spending of the Bush years would lead to inevitable deficits and tax increases. As Milton Friedman once said, an unfunded tax cut is a tax increase on our children.
That day of reckoning has been coming ever closer. As the coming year’s proposed budget suggests, tax increases, especially on the wealthy, are here.
$1.4 trillion in new tax revenue over the next decade, heavily weighted to the top of the income scale, has been proposed.
Those of you interested in deficits, accounting, tax policy — or simply are high earners — may want to take a close look at the proposals:
• Top individual income tax rate of 39.6%, starting in 2013 (up from 35%)
• Long- term capital gains top rate of 20%, up from 15%.
• 3.8% tax on unearned income of couples earning $250,000 or more; individuals making$200,000 — is to take effect in 2013 to pay for the 2010 health- care reform law.
• Dividends are treated like ordinary income. Top Federal bracket for some taxpayers = 43.4% (including dividends). Top dividend tax rate is now 15%
• The AMT is replaced with a 30% minimum tax for individuals with annual incomes of at least $1 million.
• The Carried Interest option benefiting hedge fund managers and private equity managers moves to ordinary income rates instead of a preferential 15%
Ultimately, this is an election year manuever that most of the Left expected in tear p1 of the Obama presidency. It is likely to be popular amongst the swath of the public that earns under $100k per year (read most of them), though by no means unanimously. It also seeks to paint the GOP as defenders of the rich as the expense of everyone else.
I suspect there are built in compromise points — the dividend rate wont go up to 43%, but may end up at 20% with long term capital gains.
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February 14th, 2012 at 7:52 am
In Canada top marginal tax rates are in the 38-40% range.
Dividends from Canadian corporations get special treatment at at top rates are about 28% marginal. You can earn something in the order of $40K to $50K and not pay any tax at all if you sole source of income is dividends from Canadian corporations. Foreign dividends can be taxed as ordinary income.
Capital Gains are taxed at just half the rate of normal income and you do not have to own for a year.
There are no estate taxes and estates can be gifted tax free (there may be small probate taxes in some provinces)
We have substantial deductions and a large deduction straight off income if we make a contribution to a registered retirement savings plan.
We have a neat account called a Tax Free Savings Account that we can contribute up to $5000 a year. Anything earned in this account is completely tax free whatever the source. Every Canadian now has $20K of contribution room in this account as of 2012.
February 14th, 2012 at 8:15 am
Know New Taxes … ’cause New Taxes are gonna Know You … ?
The 1% have known this was coming, and bought themselves the finest tax-preparers money could buy … The Goobermint.
I grit my teeth and close my eyes at what taxes our Goobermint is gonna lay on us … Can you say VAT, boys and girls? I knew you could …
No, you don’t see any sign of a VAT yet, only of a “plan” that is guaranteed to meet stiff and unyielding resistance — which will push us, in the Fullness of Time, into the waiting arms of a regressive, all-encompassing, “temporary” VAT …
February 14th, 2012 at 8:30 am
When reading this I felt a little smug for having been frugal when young. A significant part of my investment funds are in IRAs (roth and regular) and 401K accounts. All are self managed. These changes will encourage me to invest those funds in preference to non encumbered cash. This will not only allow me to defer taxes to when I feel it most appropriate to pay them (except for the roth … woo woo), I will also eliminate Schedule D from my return, which I detest filling out (although the new medical savings account forms win in terms of detest-ability … make 1 fucking mistake and nontaxable activities become taxable not to mention lots of redundant end of year forms from each fund manager plus W2 info).
February 14th, 2012 at 8:43 am
And yet, despite the significant tax increases on the “rich,” we’re still projected to have trillion dollar deficits in perpetuity. The issue is not the Bush tax cuts for the rich. The biggest holes in our budget are spending increases far exceeding inflation (i.e. unfunded entitlements) and a shrinking middle-class tax burden. Most families making 25-75% of the median household income don’t pay much in taxes despite being promised more and more benefits. This is the dirty secret no one wants to talk about.
~~~
BR: To respond:
1. These issues of revenue & spending are not (as some have suggested) mutually exclusive
2. The families you referenced pay lots of taxes — some of them pay de minimus Federal income tax. If you have data suggesting otherwise, please post it
February 14th, 2012 at 8:47 am
[...] posted here: Know New Taxes | The Big Picture Comments [...]
February 14th, 2012 at 8:47 am
This will spark a ferrocious PAC-attack by monied interests – the so-called job creators.
Those who plump up reelection campaign coffers have won themselves some pretty juicy tax treatment over the past 15 or so years. 15% carried interest? 15% tax on dividends? Are either of these typical of “job creators”?
These breaks are often painted as benefitting small businesses and eliminating them would “crush” small business. What a joke. Most really small businesses take income as either wages or Schedule C or Sub-S income. Others legally skim off income as rent (to avoid SS), repayment of debt and such. If they are a C Corp they might end up taking income in the form of dividends. But these would be the larger of the “small” businesses.
So the poor guy working for a wage or small business owner gets to pay 25% while his next door neighbor with the same gross income pays 12-15%. Over time wealth concentrates in the hands of those with a combination of favorable tax treatment and with higher income who are not engaged in wealth creation through making goods or providing non-financial services.
Fast forward a decade and we can complain about a weak economy, evaporated manufacturing, the 1% having accumulated most of the wealth created, etc. As you sow, so shall ye reap.
February 14th, 2012 at 8:51 am
So double taxation of dividends (at the corporate level, and again at the individual level) is back with a vengeance, at least for taxable investors.
In what is already a market offering historically low dividend yields, how will corporations react? Why, by cutting dividend payouts even further, and instead either retaining earnings (to convert them into capital gains in the stock price) or else by repurchasing shares (again converting what would have been high-taxed dividends into lower-taxed capital gains).
Thus, directionally, taxing dividends at a higher rate will encourage corporations to leverage their balance sheets even more. Great, just great.
Like the brain-damaged Harvard MBA who preceded him, Obama could write the sum total of his economic knowledge in large block letters on a 3″ x 5″ index card, with room to spare. And what he ‘knows’ about economics ain’t even true.
February 14th, 2012 at 8:51 am
It will be interesting to see how much tax collections rise this year as everyone who can accelerate income into 2012 will do just that.
February 14th, 2012 at 8:58 am
Yea! More fiscal mismanagement, more of the same stupidity, quicker death to the industrial economy! WOO-HOO, bring on the collapse!
It won’t matter who we elect, we’re gonna lose (as citizens) ground, our standard of living is likely to go further south, the usual boondoggles will continue (until they can’t) in healthcare (which is anything but), infrastructure (like old school buildings continuing to deteriorate while new prisons are built), the social safety net (or what’s left of it), wages stagnating or going even lower, prices rising, energy more costly (the crux of the whole problem), and the continuation of idiotic foreign policies.
(yeah, i know, my comment is awaiting “moderation”)
February 14th, 2012 at 9:16 am
Isn’t the real issue on long-term capital gains the definition of “long term?” Right now, definition of “long term” only applies if your main business is flash trading. If we started defining “long term” appropriately, almost anyone could be persuaded that preferential treatment should be afforded the investment. As it stands right now, the capital markets want to slap a fancy name and preferential treatment on something which doesn’t differ much from playing the lottery.
Oh, and machinehead, the last time I looked nobody made any collection of investors create a corporation. They could have just created a partnership and taken their chances. No divine right is afforded to corporations except by those who have accepted corporatism as a religion. Why should we grant special treatment to corporations after the fact, when the corporations founders knew the rules under which they would be operating. I don’t see very many of them giving up the corporate shield because of the tax policies. I wonder why that might be?
February 14th, 2012 at 9:21 am
Seeing as Obama’s 2011 budget was voted down 97-0, and the Democratic-controlled Senate, which needs only 51 votes to passs a budget, has not passed one in over 1000 days, why slice and dice this most recent political grandstanding from the Executive Branch?
Ba’roke is doing what every sitting President does in an election year if they want to reign supreme for another term: fire up the base.
Nothing of merit is going to be enacted until 01/2013 – if then.
February 14th, 2012 at 9:24 am
It was possible to see this coming years ago and, as the moribund peregrinator above points out, not too hard to prepare for the event either. It was always the odds-on favorite that even though Bush’s “temporary” tax cuts were intended to become permanent they would fail to make the cut because (a) they contributed to larger deficits and (b) moral hazard while (c) failing to stimulate the economy.
My guess though is that it will not happen as quickly as the current budget proposal suggests. Lots of hair rending and baksheesh, dark rooms and cigar smoke, rubber chicken and whores between here and 2013.
February 14th, 2012 at 9:34 am
It will never happen. There are Lies, Damn Lies, and Campaign Promises. Obama’s nose should be six feet long from his lies last election. There is no Hope and no real Change from Bush, just the names and the faces of the crooks in office. Howard Dean was our only hope and who knows? Maybe he was a crook too.
And the “entitlements” WERE funded. Congress used the money for other purposes. Now the payroll tax has been slashed and we hear, “There is no money for Social Security.”
I see no hope except for bloody revolution. The system is hopelessly corrupt.
February 14th, 2012 at 9:56 am
a tax curiosity
these payroll and business social security contributions we have ben cutting
should have made social security less solvent?
but when i asked doug elmendorf he said the social security “trust fund” is the same
they have just transferred general funds equal to the lost contributions into the system
isnt that an easy fix?
but i can’t tell which shell the contributions tax cut pea is under
did they transfer funds like general spending? is there a spending item i dont find it?
perhaps some funny money capital transfer.
February 14th, 2012 at 10:19 am
Responding to BR’s response above:
1) I totally agree about your mutual exclusivity point. My issue is that most reporting only references the revenue impact of the Bush tax cuts for the rich and all the freebies the middle-class is going to get from the vote-buyers in Washington. Nobody wants to talk about how little the middle class is paying less and less while their promised benefits continue increasing (endless college loans, free health care, mortgage guarantees, social security, medicare, fixed retirement ages, etc.).
2) Is there any tax that the poor pay more of than the middle and the middle pays more of than the rich? The one that often comes up as a response is social security. But if we count that as a “tax” we also have to count the benefits received as a “tax refund,” don’t we? In that case, including social security as a tax only skews the burden more in favor of the rich. Plus, the SS program is already deeply progressive so the lower-earner’s benefits are significantly higher, relative to the contributions.
~~~
BR: FICA tops out at $107k — so as a percentage of their income, everyone under $107k in income pays more than those over.
So the poor and middle class pay less than the upper middle class and wealthy. The Super rich pay almost nothing in FICA as a percentage of income
February 14th, 2012 at 10:29 am
In Dougs defense
he had a complex off balance sheet/ on balance sheet explanation
but i dont understand it yet
February 14th, 2012 at 10:49 am
How would the tax changes impact the treatment of short-term capital losses? I guess they would become ordinary income. Smart people are probably hard at work figuring out how to use that possibility to defer income – I’ll sell you something in November, buy it back in December at a loss and then buy the rest of it back for no gain in January.
February 14th, 2012 at 10:53 am
the safety net .. a double edged __ (sword) .. on one side every living being* not free is a meal ticket to the establishment .. on the other side anti survival of the fittest policy “Idiocracy” c2006
http://www.imdb.com/title/tt0387808/
did that come out right .. people (pets) we need ‘em alive / and we don’t …. I guess just long enough for the trade (sell)
imo tax policy needs to get the velocity of cash back into the spending public** – and before the repossessions***
* actually a historical site fits too (keepsake brick & mortar)
** preferably internal recycle spin velocity (ie: not out of network)
*** of course thats a laborers pov
February 14th, 2012 at 10:53 am
I agree this is just a campaign budget that is a bunch of ideas and not close to new law…
Meanwhile, a perspective on “job creators” and MUCH higher top tax rates. When the tax rates on a biz owner’s income go way up, what is he or she incented to do? Invest in the future; increase the value of the business. How do you do this? Hire people that work for you and increase the value of the business. You will be moving income out of your annual income and converting it to a future capital gain when you sell your business.
Keep long term capital gains rates reasonable (heh, I like 15% for non gigillionaire hedge fundees), increase top marginal rates and job creators will create jobs! Kind of a trickle-forward thingy.
February 14th, 2012 at 10:55 am
Most ways, the job was a lot Iike prison,
except Ed was waitin’at the end of every day
and a paycheck at the end of every week.
Government do take a bite, don’t she?
These were the happy days,
the saIad days, as they say,
February 14th, 2012 at 11:01 am
And the reckless borrowing and spending of the Obama administration will lead to what?
I’ll tell ya:
United States defaulting on its debts
February 14th, 2012 at 11:04 am
@machinehead 8:51;
So we are still talking this outrageous double taxation of earned income where people who work for a living have to pay both pay-role and income taxes on what they earn. Furthermore, those who just have unearned income get to pay taxes using a much lower scale. How can you still whine and cry about unfairness, have you no shame?
February 14th, 2012 at 11:09 am
I am concerned about the well being of Mitt Romney’s large family. With so many mouths to feed during austerity his $21 million income can only buy so much food. Raising his tax rate above 13.9% will surely force his children and grandchildren to go to bed hungry every night. Clearly, the food stamp president wants to push the Romney family into the program.
February 14th, 2012 at 11:15 am
I am really surprised that one of the compromises on the table that would accompany raising tax rates isn’t to raise the Roth contribution ceilings to $12,000 and an AGI of $200K. I think it would be a good tactic.
February 14th, 2012 at 11:16 am
Do the proposals also include a permanent AMT fix? Talking about all these changes without addressing AMT – ignores the reality that AMT subsumes most of the proposed changes.
February 14th, 2012 at 11:24 am
Halleluja for “the day of reckoning”. Sorry folks, don’t want to go too enthousiastic on y’all, but isn’t it time that the dreaded message is published? The good old US of A is a credit card addict who needs to be told that the equation “debt versus Federal Income” is at mindboggling levels. Come on now! Let’s all (finally-) be brave enough to take some of the burden off our children’s shoulders. The 40,000 pages tax-code needs to be reduced to maximum 1,000 pages. No loopholes for companies acting like persons, persons acting like corporations, persons playing hide-and-seek. Ahhhh, it’s nice to dream! Unless the beneficiaries of lobby-money shoot the lobbyist(-s) there’s not going to be anything to brag about to our children on our death-bed. We’ll just have to listen to them asking “why do I have to pay your debt Daddy?”
February 14th, 2012 at 11:30 am
I predict tax laws on retirement savings plans will change. The government is going to need a ton of money, and there isn’t enough revenue from the lower income earners. Those retirees disciplined enough to save will bear the brunt of the burden. It is a standard “human right” that the government must now take care of those unable to care for themselves, and the tipping point has been reached, the majority is now getting gov’t benefits and voting for more. It is not up for debate about these benefits folks, it is a “right” now, not a benefit.
The math: $16 trillion of US debt now takes around $2 trillion a year for 20 years to pay off at 3%, and we still have a trillion a year to cut, that’s $3 trillion of new revenue needed. Taxes need to double or triple. It goes way higher if interest rates rise. And if you think this will help pay down the deficit, look at the debt for all the high-tax (40-50% of GDP) European countries – the pattern is: debt gets WORSE as taxes go higher in all but one case I find, Canada.
The mob will not adhere to old promises to balance the books when the treasuries and benefits can’t be paid. Human Rights, the new normal, trump prior promises.
February 14th, 2012 at 12:01 pm
Some of the above comments show how the GOP Media Machine has convinced their genuflectors of sophistry that appeals to their emotions.
Ex Machine claims, “… how will corporations react? Why, by cutting dividend payouts even further…”
Further? You mean then cut them already? Or are you suffused with GOP rhetorical catch phrases you toss into your spiel like a GOP Mad-Lib fun book.
You GOP guys ability to predict the future to prove something is hysterical. See my other post in today’s reads about Romney’s predictions about how the auto bailout will ruin the car industry. Having visited the Chicago Auto Show yesterday I got two words for you …Chevy sonic.
February 14th, 2012 at 12:04 pm
“tax increases, especially on the wealthy, are here.”
I give you the benefit of “quick-blogging/ sloppy language” here. It should read, “tax increases, especially on the _high_earners_, are here.” The wealthy already have their money in tax-free munis, tax sheltered accounts, and variable universal life-insurance.
These tax gimmicks are not aimed at the <0.1%, who will never pay them anyway. They are aimed squarely at the middle class — where the money is.
~~~
BR: Fair point. . .
February 14th, 2012 at 12:09 pm
“FICA tops out at $107k — so as a percentage of their income, everyone under $107k in income pays more than those over.”
Hmm, I thought that Socialist Security tops out @ $107k, but there is no cap on what you pay in Medicare/Medicaid, which is why scumbag laywers (redundant, I know) organize themselves as Chapter S corporations, or something like that.
February 14th, 2012 at 12:12 pm
$1.4 trillion in new tax revenue over the next decade, heavily weighted to the top of the income scale, has been proposed.
–
This may play well for the current election cycle, but longer term, one way or another, the pain will almost certainly extend much farther down the income scale . . .
February 14th, 2012 at 12:26 pm
BR: To respond:
1. These issues of revenue & spending are not (as some have suggested) mutually exclusive
2. The families you referenced pay lots of taxes — some of them pay de minimus Federal income tax. If you have data suggesting otherwise, please post it
~~
to BR’s #2. ..
‘Everyone’ pays Taxes. There isn’t a single thing ‘One’ can do, without paying Taxes..and, of course, this effects ‘the Poor’ most of all..
and, with..”…There isn’t a single thing ‘One’ can do, without paying Taxes…”
I’d ‘love’ to hear the exception..(note: the referent is “within the U.S.”)
February 14th, 2012 at 12:28 pm
“…I predict tax laws on retirement savings plans will change…”
AtlasRocked,
It’s a Given.
February 14th, 2012 at 12:33 pm
I feel like an atheist judging a religious debate. From where I stand, every argument is flawed, because the premise is flawed. Context is everything.
Here is where we are going. It is how debt will be paid and deficits financed (’cause it sure as hell won’t be by increasing taxes or cutting spending). By design:
http://static.seekingalpha.com/uploads/2009/5/12/160728-124210248500328-Sajal_origin.png
I think I see a trend.
They will inflate this shit away, eventually, because that’s what fiat is designed to do.
February 14th, 2012 at 12:44 pm
Of course, you’re right about Bush, BR. And have you thoroughly enjoyed the surpluses created by the current regime?
It doesn’t matter who’s in charge, BR. Deficits as far as the eye can see are a state of affairs in this country until both the Democrat and Republican parties are thrown out of office.
February 14th, 2012 at 1:25 pm
James Cameron: “This may play well for the current election cycle, but longer term, one way or another, the pain will almost certainly extend much farther down the income scale . . .”
Would you say, perhaps, that this will “trickle down?”
February 14th, 2012 at 2:16 pm
AtlasRocked Says:
February 14th, 2012 at 11:30 am
I predict tax laws on retirement savings plans will change
reply:
——–
This is likely true but it will be so far into the future that it won’t materially, if at all, affect me. Congress can’t pitch the benefit of roth accounts and then pull out the rug from underneath. Ditto with conventional ira’s. As it is with everything else, the kids, tomorrow, will pay for for us, today. The simple fact I have figured out how to game the ‘investment’ system and come out ahead is to my benefit. I’ll be one of the few winners of the roth ira promise. And, because I actually took the time to figure out how taxes work with respect to me, I will probable come out ahead here without jumping through criminal loopholes or bizarre dodges. Education is golden.
February 14th, 2012 at 3:59 pm
Regarding BR’s reply…
BR: FICA tops out at $107k — so as a percentage of their income, everyone under $107k in income pays more than those over.
So the poor and middle class pay less than the upper middle class and wealthy. The Super rich pay almost nothing in FICA as a percentage of income
Response: If we consider the FICA tax a true “tax” than shouldn’t we also consider the benefit payments to be a “refund?” It’s no different than a pension contribution at work. I’ll admit that it’s a forced cash outlflow, but it’s much different than taxes that go for general welfare like roads and the military. Looking at only the tax side without considering the benefit side skews the arguement.
Also note that the benefits are DEEPLY progressive. Plug the income numbers into the Calculator on the SS website and here is what you get:
Annual Income / FRA Monthly Benefit / %
10,000 / 6,120 / 61%
25,000 / 900 / 43%
50,000 / 1,354 / 32%
100,000 / 2,087 / 25%
The tax paid is a flat rate up to 107k, but the benefits are NOT. Lower earners get a substantially higher benefit realtive to what they pay in. This is a good thing, but can’t be ignored when repeating the Left’s lie that SS “taxes” are regressive and somehow make up for the fact that they don’t contribute “their fair share.”
http://www.ssa.gov/oact/quickcalc/
February 14th, 2012 at 4:02 pm
Oops…Wrong numbers…See below (forgot to annualize some #s):
Annual Income / Annual FRA Benefit / %
10,000 / 6,120 / 61%
25,000 / 10,800 / 43%
50,000 / 16,248 / 32%
100,000 / 25,044 / 25%
February 14th, 2012 at 4:51 pm
hobo, you need to read up on Elizabeth Warren’s comments: Since it was government grace that gave you the Roth, then government need can take it away. Tomorrow’s youth, like the Constitution, can claim that was old law, we didn’t make it.
There is no plan to pay the gov’t borrowing back, and kids will be able to outvote you.
The Constitution and bill of rights are being re-interpreted daily. Majority rules now.
What goes around, comes around. The youth will not vote to pay the debt you left for them.
February 14th, 2012 at 5:38 pm
“As Milton Friedman once said, an unfunded tax cut is a tax increase on our children.”
That may have been true back when we were on the gold standard, but not anymore.
~~~
BR: Nope, still true today. Gold standard is irrelevant to the concept to spending more than you have . . .
February 14th, 2012 at 6:43 pm
UncleMilty,
“And yet, despite the significant tax increases on the “rich,” we’re still projected to have trillion dollar deficits in perpetuity. The issue is not the Bush tax cuts for the rich.”
Of course it is.
“The biggest holes in our budget are spending increases far exceeding inflation (i.e. unfunded entitlements)”
Nope.
Once again, according to the independent non-partisan Congressional Budget Office, the VAST OVERWHELMING MAJORITY of the current federal deficits and debt, as well as the near–future forecasted federal deficits and debt, are derived from the MASSIVE decline in federal income tax revenue as a direct result of the numerous rounds of tax cuts which overwhelmingly benefited the Rich & Corporate enacted by the previous Republican administration and Republican Congressional Majority.
“Most families making 25-75% of the median household income don’t pay much in taxes”
Assuming you mean federal income taxes, SO WHAT ?
Once again, when the federal income tax was originally enacted, it only applied to income above $500,000.
February 14th, 2012 at 7:05 pm
AtlasRocked,
“The math: $16 trillion of US debt now takes around $2 trillion a year for 20 years to pay off at 3%, and we still have a trillion a year to cut, that’s $3 trillion of new revenue needed. Taxes need to double or triple.”
Sheer lunacy.
We went from massive federal budget deficits & debt during the 12 years of Reagan/Poppy Bush (created by massive tax cuts that overwhelmingly benefited the Rich & Corporate), to federal budget surpluses as far as the eye could see, and the approaching pay-off of the entire federal debt, and it didn’t require anything close to that level of taxation.
As someone mentioned upthread, it’s merely a matter of targeting taxation where the money is, as this nation has done in the past.
February 14th, 2012 at 7:33 pm
wnsrfrsaid,
“Meanwhile, a perspective on ‘job creators’ and MUCH higher top tax rates. When the tax rates on a biz owner’s income go way up, what is he or she incented to do?”
A) More than 98% of small businesses are not in that tax bracket.
B) Consumers are the “job creators”, and consumers are overwhelmingly workers.
February 14th, 2012 at 8:26 pm
Iamthe50percent,
“And the ‘entitlements’ WERE funded. Congress used the money for other purposes.”
No.
The monies are all in the trust funds, exactly where they should be.
“Now the payroll tax has been slashed and we hear, ‘There is no money for Social Security’.”
Only from liars.
There is no net decline in monies flowing to the Social Security Trust Fund as a result of the payroll tax cut legislation.
February 14th, 2012 at 10:13 pm
Now, how long before we invade Iran?
As low as interest rates are, the debt service on US government debt is at a 30 low!
February 14th, 2012 at 11:08 pm
Tax increases on the wealthy might have been sufficient to pay for the reckless borrowing and spending of the Bush years. But to pay for the vastly more reckless borrowing and spending of the Obama years? There aren’t enough rich people’s hides out of which to take that kind of money.
February 14th, 2012 at 11:23 pm
“BR: FICA tops out at $107k — so as a percentage of their income, everyone under $107k in income pays more than those over.”
They will also receive, on average, more in benefits than they pay in FICA taxes.
February 15th, 2012 at 2:28 am
Bridget,
“Tax increases on the wealthy might have been sufficient to pay for the reckless borrowing and spending of the Bush years. But to pay for the vastly more reckless borrowing and spending of the Obama years? There aren’t enough rich people’s hides out of which to take that kind of money.”
A) What “vastly more reckless borrowing and spending of the Obama years” ?
B) You’re obviously unaware just how much federal income tax revenue was previously collected. According to the independent non-partisan Congressional Budget Office, federal income tax revenue plunged down to 1950s levels as a result of the numerous rounds of tax cuts that overwhelmingly benefited the Rich & Corporate enacted during the previous administration.
C) It is mathematically impossible to solve the federal deficit & debt problem by cutting spending. You could eliminate ALL non-defense discretionary spending – Eliminate all the air traffic controllers and shut down all the airports, shut down the entire federal prison system (and release all the prisoners), shut down the federal court system and eliminate the federal marshals, shut down the Justice Department along with the FBI and the ATF, shut down the customs service and eliminate the border patrol and Coast Guard, and shut down the CIA/NSA/DIA/Homeland Security, and on and on and on – and STILL not even come close to balancing the federal budget.
~
“They will also receive, on average, more in benefits than they pay in FICA taxes.”
Not anymore. That used to be the case, now they receive less than they paid in.
February 15th, 2012 at 7:50 am
Joe Friday:
Per CNN on cost of Bush/Obama tax cut extension:
Bush tax cuts: $544.3 billion. The package would extend the Bush tax cuts for everyone for two years.
The bulk of that cost — $463 billion — is for the extension of cuts for families making less than $250,000, including two years of relief for 2010 and 2011 for the middle class from the Alternative Minimum Tax.
The rest — $81.5 billion — is attributable to the extension of cuts that apply to the highest income families.
The cost of extending all the tax cuts over 10 years would have been $3.7 trillion.
http://money.cnn.com/2010/12/07/news/economy/tax_cut_deal_obama/index.htm
February 15th, 2012 at 9:06 am
Bridget – Joe Friday is a blatant, bald faced, documented-on-the-forum liar. I stopped replying to him. He recognized no facts, and does no math.
Actually I do reply to him when the opportunity to point out a lie of his is clear, but it is less frequent now.
February 15th, 2012 at 9:11 am
Joe Friday, who said anything about cutting the deficit with cutting spending alone? Its going to take tax increases alright….on everybody. You are aware that the Vast majority of the Bush tax cuts benefitted the middle class, correct? That eliminating them on the rich alone would raise 700 billion over 10 years, while eliminating all of the Bush tax cuts will raise 3 trillion over the same time period?
February 15th, 2012 at 9:25 am
If you want to know the facts about where our deficits came from, check out the first table in the historical tables from the OMB:
http://www.whitehouse.gov/omb/budget/Historicals
February 15th, 2012 at 9:34 am
I will have to relocate the analysis I’ve read about the amount in benefits paid out in relation to FICA taxes paid, but my recollection was that lower income beneficiaries stood to receive slightly more than they paid in, while wealthier beneficiaries paid slightly less. And, come to think of it, that may have only included Social Security. I’m betting if Medicare was included, the benefits paid would outweigh the taxes paid by an even greater margin.
The point being missed by Barry, and obfuscated by you, is that lower income people whose FICA taxes are cited as proof that they pay a large portion of their income in taxes, even if they pay no income taxes, completely ignores the fact that they receive most/all/more of the taxes they pay back in the form of benefits.
~~~
BR: Bridget, you want to show your work? perhaps back that up with data?
This site is not for people who merely repeat foolsih talking points
Show some data or be gone
February 15th, 2012 at 9:46 am
Comparing FICA taxes paid to benefits received.
http://www.urban.org/UploadedPDF/social-security-medicare-benefits-over-lifetime.pdf
http://www.justfacts.com/socialsecurity.asp
http://www.house.gov/jec/fiscal/tx-grwth/payroll/payroll.htm
February 15th, 2012 at 1:50 pm
Bridget,
“who said anything about cutting the deficit with cutting spending alone? Its going to take tax increases alright….on everybody.”
Nope.
Those that created and benefited from the massive debt should be the ones to pay it off. There was no shared benefit, so the calls for shared sacrifice ring hollow.
“You are aware that the Vast majority of the Bush tax cuts benefitted the middle class, correct?”
The numerous rounds of tax cuts OVERWHELMINGLY benefited the Rich & Corporate.
“If you want to know the facts about where our deficits came from…”
I already delineated “where our deficits came from”.
“Comparing FICA taxes paid to benefits received.”
Old news.
February 15th, 2012 at 11:03 pm
“The numerous rounds of tax cuts OVERWHELMINGLY benefited the Rich & Corporate.”
On an individual basis, yes. But, what part of 3 trillion vs. 700 billion do you not understand? (I notice you can’t refute the data, btw).
On the issue of what it is going to take to dig us out of the trillions upon trillions of Obama deficits, there aren’t enough rich people to get the job done. You, Joe, are going to pay Obama’s tab. He’s telling you that rich folk are going to pay, and they will. But you are going to pay too. And he ain’t gonna tell you that. You’re not gonna figure it out until it’s too late.
“Old news”
I presented you the facts with links. You’ve got something more up to date ghat says different? Post the link. Post the facts. Post the data.
“I already delineated “where our deficits came from”.
Actually, I delineated it, with a link to the White House Office of Budget and Management official historical tables. All you delineated is your own, entirely unsupported, opinion.
February 16th, 2012 at 12:11 am
“Wreckless borrowing and spending of the Bush years” ….. This reads like bait but I
just have to update you with some facts, Barry.
Lowest Bush tax rate: 16.1% in 2004, 2 years after the Bush rates enacted.
………………………………..: 17.5% in 2008, trending upward.
Obama tax rates : 14.9, 14.9, 14.4% trending downward
Obama has undertaxed the lowest Bush years by 1.2%, 1.2% and 1.7%, couldn’t you maybe start pointing out Obama owns the title of “Most Undertaxing President” now, by a mile?
February 16th, 2012 at 1:44 am
“Those that created and benefited from the massive debt should be the ones to pay it off. ”
Be careful what you wish for. 700 billion in tax cuts for those earning over $250,000, vs. 3 trillion in tax cuts for those earning under $250,000. That’s where your massive debt is. Along with reckless borrowing and spending the likes of which the world has never seen. And Obama’s got the suckers convinced that taxes on the rich are going to fix it all.
“I already delineated “where our deficits came from”.
Umm, no, I did that with the link I posted to the historical charts from the White House OMB. You, on the other hand, simply delineated your opinion.
“Old news.”
Fact. Benefits received are greater than taxes paid.
February 16th, 2012 at 1:51 am
The NYT on the cost of extending all of the Bush tax cuts. Hint hint. The total is 3.8 trillion, of which 700 billion comes from the top 2%. The rest of which comes from….you guessed it, the middle class.
http://www.nytimes.com/2010/08/11/us/politics/11tax.html
These figures are cited in many publications. The data for the most part comes from the Congressional Budget Office. See table 1-7 on page 24.
http://www.nytimes.com/2010/08/11/us/politics/11tax.html
February 16th, 2012 at 2:05 am
Joe Friday, do you have a link to the CBO report that says revenues plunged to 1950′s levels? After all, this site isn’t for those who merely repeat foolish talking points.
February 16th, 2012 at 3:56 pm
Bridget,
“do you have a link to the CBO report that says revenues plunged to 1950′s levels?”
I take it you’re either new here or haven’t been paying attention, eh ?
Sure. After numerous rounds of tax cuts which overwhelmingly benefited the Rich & Corporate:
“Receipts … As a share of GDP, they accounted for the smallest proportion since 1959”
CBO Monthly Budget Review
“After all, this site isn’t for those who merely repeat foolish talking points.”
Advice you should adhere to.
February 16th, 2012 at 7:40 pm
Oh, so now your switching your story from “revenues plunged to 1950′s levels” to “receipts accounted for the smallest proportion of GDP since 1959.”. From a 2004 CBO report. The facts, which are evedent by looking at the historic tables from OMB that I posted above, are that revenues declined from 2000 to 2004, and then rose above their 2000 levels in 2005, and have not since then fallen below their 2000 levels. And not in this universe have they approached 1950′s levels.
Atlas, you were totally right about this guy. He’s innumerate and plays fast and loose with the truth.
February 16th, 2012 at 7:42 pm
My deleted posts are back! :)
February 16th, 2012 at 10:08 pm
Bridget AKA Atlas,
“Oh, so now your switching your story from “revenues plunged to 1950′s levels” to “receipts accounted for the smallest proportion of GDP since 1959.”.”
Switching ? Are you DAFT ?
They’re the very same.
The independent non-partisan Congressional Budget Office DISAGREES with your ass.
“Atlas, you were totally right about this guy. He’s innumerate and plays fast and loose with the truth.”
Can’t support your own bogus arguments, so you invent someone who will ?
February 17th, 2012 at 9:06 am
“They’re the very same.”
Only to the innumerate.
February 17th, 2012 at 9:41 am
“Joe Friday”
with..”…Can’t support your own bogus arguments, so you invent someone who will ?…”
Now, you’re accusing her of ‘sock-puppeting’?
Troll much?
isn’t TPM missing your ‘shiny’ presence?
February 17th, 2012 at 2:24 pm
Mark,
I just calls ‘em likes I sees ‘em.
He/she/they have an argument with the independent non-partisan CBO and are simply in denial. Reality bites.
As to “TPM”, I assume you mean ‘Talking Points Memo’ ? If so, I haven’t visited there in at least four years and have never posted there, so I haven’t the foggiest what your attempt at a baseless implied meaning was.