Tax cuts for the wealthiest 1%

http://www.thestatecolumn.com/articles/congressional-shutdown-looks-imminent/



But...raising taxes WILL lead to a lower deficit, which is good for the economy. Morons. The Dems should just give the Republicans the middle finger and not allow anything concerning the Bush Tax cuts to come to the floor, while pushing the legislation they want to pass and let the Repubs block it as they see fit. Then it's up to the Repubs to introduce and pass a brand new tax cut next session, since the Bush cuts will have expired. But noooooo, Obama and the Democrats have proven that they don't have balls and will keep wasting time on "bipartisanship."

No, no, no, no. Not even slightly. Raising taxes has never led to a decrease in the deficit trend. Technically speaking, the only thing that will decrease the deficit is an increase in economic activity. Nothing more or less complicated than that, but unfortunately that doesn't really apply to how huge the deficit is. Not one single economic theory in existence has a note on how to lower a deficit of this magnitude.

Even so, increased economic activity can be hindered by increase taxes as much as it helps. Increased taxes lowers consumer spending, which means less revenue. Less than the difference from the increased taxes, especially in the shape our economy is in.

The major problem now is consumer confidence. Increased taxes could help short term, and possibly long term, but only if it was a huge increase to all brackets, and consumers will riot if they see the increases necessary to begin to tackle the deficit. We're talking numbers that would make hundreds of thousands lose everything.

Bottom line, a lot of thought has to go in before we dare touch the tax rates. Simple tax cuts nor tax hikes is going to help anyone in the long term.

As pragmatic (or even pessimistic), as it might sound, there is nothing we can do to really lower the deficit in the United States. It can't be done. Best we can do is balance the budget so very little more will accumulate, but that deficit will never shrink in the levels people keep hoping it will. It'll be there until the day the United States falls.

So we've dug ourselves a hole that we have no chance of getting out of. Great.

You have no idea either as to what's going on, you're regurgitating whatever you've been told in economics class. The classes held by people who've been 100% behind the fiscal process that has brought us all here.

Here are the facts:
1. Free market does not equal a deregulated market. Free market is an economic term for a market where supply and demand set the price, where the means of production are in private hands and no single participant can influence the market on their own.

2. That is not what we have today. The rise of megacorps, the economic reality of mass production - which favor bigger corps - precludes living in such an economy. We *need* regulation.

3. As Noam Chomsky has pointed it out, having a vote does not equal having a say in what your country does. Franchise is not enough, one also has to have some power over policy. The rise of televised elections and the dominance of big money through lobbying and direct pressure (meet my demands or I'm moving abroad!) have reduced the average citizens ability to influence government policy.

4. The glottalization of fiscal institutes has put more power into the hands of private owners of banks than any single government on the planet. Ever since the end of the New Deal (which lasted until the government regulatory bodies were gutted one by one) government policy has been ever more cartering to the needs of big capital rather than the people.

The needs of capital and the people are not necessarily at odds, but what helps one does not necessarily help the other. Trickle down economics have proven to be false:

5. Ever since 1965 a massive transfer of wealth has taken place, first from the poor, then from the middle class to the rich. This has been kicked into over-drive during the Reagan era and things have become worse ever since.

6. The credit bubble was a direct consequence of government deregulation. Investigations into Wall Street has found wide spread fraud and malpractice. This was swept under the carpet.

So here's what should be done:

-Tax the RICH! They already own 50-60% of the wealth of the country yet pay a lot less for it that average Joe.
-Reintroduce strong government regulatory bodies, especially in the finance sector!
-Fiscal reform, especially since peak oil is already behind us! Stop banks from creating money by raising the fractional demands to 100% for the loans they lease, and return money creation to the government. A forever developing economy is unsustainable. The banks have shown they're unwilling to self-regulate and their promises to keep inflation ( *AND* deflation! Which what IS happening now) in hand was a hollow promise.
-Mandate that presidential campaigns should be held on public money. Hold pre-election votes, make the partys' select the initial candidates, or hold a ballot or anything at all, but get big corporate money out of the election system and get it out NOW!

PS.: Funny how all tax cuts so far have benefited the rich a lot more than the poor. Usually they went hand in hand with lowering social spending, so in the end the poor ended up fucked anyway.

You do realize that pretty much anything that one of the members of Fakku "spouts off" is going to be based only on what they've heard or studied because I seriously doubt any of us are Macroeconomics majors who really have a firm grasp of all the workings of the economy, including you.

What you have said is nothing more than spouting off what you have studied or your understandings of what someone else has said and how you have interpreted it. There is nothing wrong with that. Everyone is entitled to their opinion of the situation regardless of whether or not they can call themselves economists.

Second of all, I mostly agree with you. Although heavily taxing the rich regardless of the amount of actual wealth they have, isn't really going to do much to fix the economy. A lot of that just stands from resentment of those on the outside looking in, including myself. I want to puke every time I hear how desperately the wealthiest five percent of America is paying too much of the countries tax percentage, and need more and more and more cuts. I swear some of them actually want a regressive tax structure, something straight out of a Robin Hood motif.

I'm a little worried about more regulation too. Granted not having a sufficient amount of regulation arguably led us to what we have now, but having the government regulate the private sector opens up the door for the government to start regulating everything in concerns to the economy. Yeah, I know that is a leap and I can't back that up with anything, but that doesn't change the fact that it is discerning to me.

Sorry for the outburst, but economic majors always piss me off by just quoting Friedman and badmouthing Keynes, when they have no whatsoever proof of what they speak of beside a mathematical model. When I point out that real life, the data collected doesn't match up with their theory they decry that I just "don't get" economics. The fact that reputable publishing like the NY Times or more professional outlets like the Economists are also on the "deregulation" bandwagon doesn't help.

These ivory tower academics also get payed tons of money by libertarian and neo-conservative think tans. Meanwhile all sociological and honest economic surveys shows that something is really rotten in the state of Denmark the developed world.

http://www.slate.com/id/2267157/

When I talk about regulation, I first and foremost mean *market* regulation, that is keeping checking on big business, making sure it plays by the rules. Right now the federal bodies who're meant to do this are either powerless or absolutely co-opted.

I'm talking about the government controlling more aspects of your personal life: that's actually something big business wants and has gotten away with. The terrorist scare is a wonderful reason to monitor each and every aspect of your life (say hello to porno-scanners! They'll keep photos, so smile!) and also a good reason to suspend your constitutional right habes corpus (Patriotic Act) and your fair use rights (DRM, DMCA, COICA, now domain confiscation and ACTA).

None of these are the kind of regulation I'm speaking about. What I speak about is intensive auditing of big business, of government oversight on Wall-Street so they can't do another crash by excessive loaning and sub-prime mortgages and inside trading, of putting people onto the FDA and other regulating bodies who're not in the pockets of big capital.

Yeah, I got the gist of what you were speaking of. I totally went on a leap with the regulation thing. I'm just naturally paranoid when I hear the words government and regulation in the same sentence.

Can't say I disagree the comment about economists either. I used to just do that. I'm not majoring in Economics, but I've done a lot of random studying on my own, and suddenly found myself just spewing random little factoids without really knowing what they mean, and certainly not thinking for myself. I think that's part of the whole problem with macroeconomics. Everyone is too worried about current theories instead of taking the opportunity to sit down and try to think outside of the box in relation to the global economy.

I do firmly believe that current method(s) we employ will not do anything to seriously tackle the national deficit. So, people need to stop trying to employ current tactics; stop playing the blame game and try coming up with their own theories, or heaven forbid their own solutions.

Actually all of our deficit and is something that was artificially created by the way out banks work through fractional reserve banking. A relevant video:

Money as Debt:


Since our money supply depends on loans which have interest on them, people always have to pay back more money than what was conjured into existence. To create equivalent goods and services the economy has to constantly expand otherwise the money system crashes. However that's not enough. The only way to actually pay back the original loan is to take up new loans - somewhere, someone down the line will take out a loan, and through various exchanges, this is what ends up as your paycheck. This means that the growth has to be exponential.

Exponential growth has some very nasty facets:

thats common information by know, isint it?

Taxing the rich more won't fix the deficit, hell taking all their money won't even kill 5% of what we owe... but it a start. It going to have to be a major job increase, lower spending, higher trade and stop the war in Iraq and Afghanistan.

A tax on the rich is also a start on narrowing the gap between rich and poor which will lead to better educated work force, more jobs and more savings that in turn will benefit investment and therefore more jobs. Right now too many Americans are living day to day, with no savings.

The more important thing in the long run IMHO is a fiscal reform that finally puts an end to fractional reserve banking.

That's the problem. Everyone is too busy trying to maintain the status quo. I haven't heard anyone mention anything about economists using free thinking to come up with their strategies, their own theories, their own solutions.

Apparently no one finds it frightening that our national debt is soon going to exceed our GDP. Everyone is too busy worshiping old names from Smith to Keynes.

Nothing short of some radical new ideas is going to do much but continue to delay an increasing national debt, an increasing standard cost of living without progressively increasing wages, bank fraud, and frankly consumer negligence and stupidity.

In theory the show could go on.

The short term problem is that the USA had its actual production capability gutted by outsourcing to 3rd world countries with very shitty living conditions and this hurts the buying power of citizens as you need a job and service can't take over the millions of jobs lost in the manufacturing sector.

Without a jobs there's not enough taxes to stimulate the economy with government spending, but the corporations themselves won't invest either as the wages and associated costs thanks to labor laws are too high. So either America finally admits that free-trade at all costs is not beneficial and finally puts some protective measures around its economy or the labor laws will have to be abolished and the country goes back to the exploitation and impossible working (and living) conditions not seen since the robber barons and which could in a sane world only live on in failed states.

The mid term problem is peak-oil and resource exhaustion. Remember that I said the growth has to be exponential to sustain our current fiscal system? To do that, resource exploitation also has to be exponential... but it can't be. I'm often told that new resources are discovered each and every day, untapped reservoirs of oil, gas, rare earth metals, etc... but it's no good. It's not enough. To get anywhere we'd have to double our reserves every 20 years. Not going to happen. Remember those "reassuring" figures that the USA still has enough coal for hundreds of years? FALSE. The original report stated - "under current rates of consumption". With exponential growth, the reserves are good for *decades* at most.

The long term problem is global warming and general exhaustion of the planet's ability to sustain us. Top soil depletion, etc. I say long term, but the really nasty thing about environmental issues like this is there could be more feedbacks than what we see, so the problem could get suddenly a whole lot worse.

I have no concrete and well though out idea what the good solutions for mid- and long term problems would be. Don't bet on science. We already have tech to solve a lot of these issues, yet nothing is being done. I'm afraid the governments will only act when the problems pose imminent breakdown and catastrophe... it could be too late then.

The rich exacerbate these problems, since they can exempt themselves from the effects of a lot of them. They continue to amass wealth and hope that at the end of the race they could buy themselves out of any tigh-spot. In doing so they prevent solutions from being devised and put to work and also cause some of the problems themselves.

What? Taxing the rich does not narrow the gap between the rich and poor. If it does, it is only because the rich are getting slightly poorer by having to pay higher taxes, it doesn't mean the poor get more wealthy. That said, it won't effect the education of a work force, create more jobs (in fact it may lose jobs when you take away a rich person's money - ever been hired by a poor guy?) and there will be no savings as there is already an excess of spending that would eat it up.

The state of the deficit isn't going to be changed by ending the war in whatever country, by taxing the rich, or by setting up welfare for people. It only comes from cutting spending and balancing the budget - both of which go hand in hand. This just doesn't happen because presidents are elected on the backs of promises they have to keep to certain people. When they get in office, they have to keep their promises or they won't be reelected. Look at Greece, one president would tell teachers they would get higher pay. The next gets elected because he will raise police pay. The next gets elected because he will shorten the work week. The next because he promises to increase spending on environmental issues. In our country, it was social security, medicare, military, then health care.

Only two presidents have ever balanced the budget - EVER. The first was Andrew Jackson, who did this because he wasn't elected on the backs of promises. He was elected because he was a Hero and promised to get rid of indians. Second was Bill Clinton. He was able to balance the budget because he went against his own party and didn't keep promises to the groups that got him into office. He did what he wanted and balanced the budget even if it meant betraying the unions and groups who voted for him. Lucky for him, his plans worked out so well that he became popular enough that he didn't need their help the second time around.

I understand that it seems horrible that we would give rich people tax breaks when others are in finical difficulties, but the burden is not theirs alone to bare nor should we punish them for being rich by asking them to contribute more than everyone else.

Thats basically the same thing as when your friends all ask you to pay for dinner because you're the only one with a decent job. It isn't fair to you, and it doesn't change the fact your friends are still going to be poor.

I'd be even tempted to agree with you, if the rich were 5-20 times richer than the average middle class worker. That is not the case.

They're 500-2000 times richer. Obscenely wealthy... and they almost never acquire this wealth through hard work or even clever investment. America has a new plutocracy, that of CEOs and their kids who'll go on to be CEOs who've actually often worked against the interest of the share holders. Then you have bastards like central California valley farmers who have subsidized water and have been living off the state in a lot of ways, posturing as good 'ol "farmers" when they've never moved a gram of soil in their entire life.

This super-rich is what I have problems with. People so far removed from reality, so ingrained in their own ways and without a shred of social responsibility. A lot of them worship hacks like Ayn Rand and openly favor... no, worship sociopathic tendencies. This is the same bunch that brought America two wars, and absolutely fucked up the second one (the first war was unwinable from the get go).

You never been to central California have you. Most of our water goes to LA and the southern California's water parks, so the farmer's have to fight just to get enough to water the fields since we grow most of the food for the nation and part of the world. I do agree there too many farmer's getting that government welfare check to not grow shit so we can import produce from Chile and other Southern American countries.

Being a son of a farm laborer company owner and the grandson of melon farmer with farms in California, Arizona and Mexico, the farmer's here are making a living bearly or said fuck it and sold to land developer's or a new walmart.

Edit:
Kern county isn't central california... they think of themselves was LA people... i would lose sleep if Bakersfield burns to the ground.

Although Farm subsidies is an interesting and important topic, it isn't related to the thread topic. However, Farming subsidies is rather small change compared to the larger picture. But here is an article describing the harm of subsidies and how other nations have prospered once eliminating those subsidies.

http://www.heritage.org/research/reports/2007/06/how-farm-subsidies-harm-taxpayers-consumers-and-farmers-too

Here's a better article:
http://exiledonline.com/water-wars-billionaire-farmers-scheming-to-privatize-californias-water-are-under-attack/

"Just as the Federal Reserve allows banks to borrow money from taxpayers so they can reap huge profits by lending it right back to the masses at a higher rate, the Kern bank allows a handful of corporate farmers to sell a public resource back to the public at markup. According to Public Citizen, in 2001, the Kern County Water Bank bought subsidized water from the State Water Project at $161 an acre-foot and flipped it back to the state’s Environmental Water Account for $250 an acre-foot, making a cool $6.3 million for its owners — just for having the right friends in the right places."

That is the idea of a progressive tax structure. The more you make the more you pay. The rich have been weaseling their way out of their bracket essentially every time the Republicans have been in power. Of course their should be a limit, but like Flaser pointed out there is a significant difference between the middle class and the rich, and the rich are hardly paying the tax bracket that they should be paying.

I would have to say that this is a very informative economics discussion.

It has been years since I last took any economics-related modules or classes, but I believe the aggregate demand and multiplier effect will have a part to play if the government intends to deduce its deficit. Encouraging consumer spending may be necessary.

Looking at it from a non-economic perspective, I sometimes wonder if politicians from one party oppose another mainly for their own interests. Shouldn't they be working together to overcome problems, although saying it in such simple terms is definitely far too idealistic?