Prove me wrong about tax cuts for the rich.

[JMapleton]

People seem to forget the "rich" dont stuff their money into a matress. It is put into a bank. Which then dishes it out in the form of loans to people to build homes, business, cars, buy products. Or they invest into business. Taxing them is an opportunity cost on that money. Instead of going into a bank or business, it is put into the inefficient monster of big govt.

You're making the same mistake neocons are, going through the economic cycle backwards.

CONSUMER SPENDING creates the demand for loans. The availability of loans DOES NOT create consumer spending.

You have to give the money to the working guy FIRST before he can buy cars and houses. It all starts with the lower and middle class. Trickle up.

Trickle down is going through the economic process backwards and most of the money spent on it get's wasted.

Give some rich guy tax cuts so he can invest the money overseas? That's where a lot of rich are investing now. Yeah that makes sense.

 

[JMapleton]

Good post - I lean right but old right like Eisenhower right who understood REDISTRIBUTION was necessary but you better earn it. Merit like grades, credit history, working, honest business, etc should be qualifier if you get Federal help or not. This sitting at home, running your business into ground, and getting money from govt needs to end.

Exactly, I'm not saying we should hand out checks to poor people for doing nothing, although in all honesty we did keep thousands of wealthy banks on Wall St employed even though they shouldn't have been because of their own stupidity.

But capitalism will fail if you do not let the money flow. You cannot just give it all to the rich hoping their crumbs will feed the rest. That will only keep 95 percent of the population poor and cause a revolt and we'll fall into real socialism, not Obama "socialism-lite."

 

[trenchfoot]

oh you mean like Massachusetts Sen. John Kerry?

http://www.msnbc.msn.com/id/38378992/ns/politics/


and lets not forget Charles Rangel (another democrat that forgets to pay taxes)

"Ever notice that those who endorse high taxes and those who actually pay them aren’t the same people? Consider the curious case of Ways and Means Chairman Charlie Rangel, who is leading the charge for a new 5.4-percentage point income tax surcharge and recently called it “the moral thing to do.” About his own tax liability he seems less, well, fervent."

Oh, hey, thanks for naming all two of the Dems who you can think of compared to the untold thousands and thousands of rich righties whose ideology keeps them on the right, as opposed to the much fewer Dems who share in that "rightist" ideology.

 

[JMapleton]

Oh, hey, thanks for naming all two of the Dems who you can think of compared to the untold thousands and thousands of rich righties whose ideology keeps them on the right, as opposed to the much fewer Dems who share in that "rightist" ideology.

What are you two arguing about? If both of you owned such a yacht, you'd probably do the same thing.

I know I would.

The government bends over backwards to tax us, we should take advantage of every legal tax strategy we can. It's only fair.

 

[Acanthus]

What are you two arguing about? If both of you owned such a yacht, you'd probably do the same thing.

I know I would.

The government bends over backwards to tax us, we should take advantage of every legal tax strategy we can. It's only fair.

As long as that doesn't include legally bribing your politicians to pay impossibly low tax rates, i agree.

 

[Fern]

Can your business buy you a 'Cadillac HC plan' w/o providing it to all employees with an S? No. But can with a C. Can an S fully deduct the costs of any medical reimbursement plan? No. But can with a C. Hardly a legacy, it's the way to go. Any accountant who says otherwise is being lazy IMO.

Not to mention things like 50K per employee for education 100% write off AND not taxable to beneficiary , employer-provided vehicles, transportation passes etc etc etc. Which Cs can take and S's can't.

I don't believe this is correct.

Any rules that prohibit plans (HC, retirement etc) that favor highly compensated employees (including officiers and owners of an s-corp) apply to both C-corp and S-corp.

There is a 'mechanical' difference in how HC benefits are displayed for S-corps. Instead of the company deducting it, the S-corp owner deducts it on his/her own tax return. That's a simplified explanation, but the result is the same for both the C-corp and the S-corp.

Now it's true in past times the HC benefit was better under a C-corp than an S-corp or even a sole proprietor. However, over time the tax treatment has become identical (in it's effect, although presented differently on tax returns.)

S-corps can do medical reimbursement plans.

Company owned vehicles are treated the same.

Not too familiar with thye employee eductaion thing. But my guess is that, here again, the net effect is the same but the tax return presentation is different.

Fern

 

[Atreus21]

Because there is not a single piece of evidence that the Bush tax cuts had any effect whatsoever on the economy.

If that's true, then why should repealing them have any effect on the economy?

 

[Fern]

You're making the same mistake neocons are, going through the economic cycle backwards.

CONSUMER SPENDING creates the demand for loans. The availability of loans DOES NOT create consumer spending.

You have to give the money to the working guy FIRST before he can buy cars and houses. It all starts with the lower and middle class. Trickle up.

Trickle down is going through the economic process backwards and most of the money spent on it get's wasted.

Give some rich guy tax cuts so he can invest the money overseas? That's where a lot of rich are investing now. Yeah that makes sense.

Um for one thing, I believe the neocon ideology primarily refers to a foreign policy outlook and is not rooted in economics. Not sure it's particularly helpful to refer to neocons when discussing economic policy.

While I agree that Washington often gets the economic cycle wrong. E.g., providing exapanded write-off's for expansion of equip etc (section 179 deduction) when there is no demand. If no demand, who wants to expand?

However, this:

CONSUMER SPENDING creates the demand for loans. The availability of loans DOES NOT create consumer spending.

If there are no loans available to the consumer, they cannot express their demand by additional spending. There are no funds available to them.

So, to the extent we have people (including small businesses) that would like to spend but cannot obtain loans to fund it, that lack of loans actually suppresses demand. I believe we have this problem now to some extent, particularly for small businesses.

Many small businesses have closed. Their competitor(s), still in business, would like to grab up those customers now available. But if you can't get loans to go after that business you have a problem, and self-funding is a b!tch.

Theoretically at least, it is possible that the lack of loans/capital can prevent an economic turnaround. If no one can get money to go after/handle those customers, no one gets hired. The demand that could be there will die of starvation.

The current group in charge (Admin, Fed, Congress) seems to think that by flooding banks with money some of it will find it's way into new loans. A 'trickle down theory' for capital, if you will. So far it is not working. I think we have a situation where everybody is waiting for someone else 'to go first'. And small business is getting killed. The gov needs to use the SBA to get money flowing to them.

Fern

 

[Phokus]

While I think your argument is a good one I can't help but question the source.

Would you like to purchase some MBS that Moody's has rated AAA quality, almost impossible to lose money on investments? If so I can sell you some, give you a real good deal.

Why does ANYONE still trust those assholes?

It's basic economics, even my basic economics textbook by Greg Mankiw says that spending increases have a higher multiplier than tax cuts.

 

[Fern]

If that's true, then why should repealing them have any effect on the economy?

Obama himself, and his advisors, are warning that a tax increase now may cause a double-dip recession.

In other words, Libs/Dems/Progessives are talking out of both sides of their mouth. I.e., tax cuts don't help demand and the ecomonomy, but tax increases hurt demand and the economy. It's irreconcilable.

Fern

 

[Atreus21]

I really wish we'd do the Fair Tax, or the Flat tax, or the Retard Tax, or whatever. It can't possibly be as bad and confusing as our existing system.

 

[Phokus]

Obama himself, and his advisors, are warning that a tax increase now may cause a double-dip recession.

In other words, Libs/Dems/Progessives are talking out of both sides of their mouth. I.e., tax cuts don't help demand and the ecomonomy, but tax increases hurt demand and the economy. It's irreconcilable.

Fern

Dems are for tax decreases FOR THE MIDDLE CLASS. The GOP is holding them hostage so that they can give tax breaks to their rich friends again.

 

[Fern]

Dems are for tax decreases FOR THE MIDDLE CLASS. The GOP is holding them hostage so that they can give tax breaks to their rich friends again.

That detail is ancillory and doesn't change my point - we all really agree that taxes affect demand and the economy; in spite of much rhetoric to the contrary.

Fern

 

[OutHouse]

i still like my stimulous plan. instead of giving all that money to the banks, car makers and god knows who else. the government shouls have given every person age 60 and over 2million bucks. on one condition. they had to retire. just think of all that money being pumped into the economy buying "things" and think of how many jobs that would have opened up for the unemployed to move into.

yea it would suck to be 59 and 364 days old but you have to draw the line someplace.

 

[OutHouse]

Oh, hey, thanks for naming all two of the Dems who you can think of compared to the untold thousands and thousands of rich righties whose ideology keeps them on the right, as opposed to the much fewer Dems who share in that "rightist" ideology.

so what ideology do the untold thousand and thousands of filthy rich lefties adhere to to keep them "the rich left" ?

 

[fskimospy]

That detail is ancillory and doesn't change my point - we all really agree that taxes affect demand and the economy; in spite of much rhetoric to the contrary.

Fern

Actually they've said that tax cuts for the rich don't help the economy, but tax cuts for the middle class do. This is fairly well backed up by the empirical evidence. Therefore SOME taxes affect demand in the economy more than others.

 

[OutHouse]

I really wish we'd do the Fair Tax, or the Flat tax, or the Retard Tax, or whatever. It can't possibly be as bad and confusing as our existing system.

amen brother. we have been long past that and our dumbass congress pricks need to really change to it.

everybody pays in that system and you pay your share according to what you buy. how hard is that.

 

[The-Noid]

I really wish we'd do the Fair Tax, or the Flat tax, or the Retard Tax, or whatever. It can't possibly be as bad and confusing as our existing system.

Problem is that kills somewhere around 2M accountants and auditors not including corporate treasury and tax preparer.

 

[thegimp03]

What's the definition of "rich"? And don't say it's two people living in San Francisco or New York working their asses off to make $250k combined.

 

[Craig234]

I really wish we'd do the Fair Tax, or the Flat tax, or the Retard Tax, or whatever. It can't possibly be as bad and confusing as our existing system.

It's worse.

 

[boomerang]

I am just so pleased progressive democrats are giving Obama hell.
Or should I say HELL NO!
Keith Obermann had a guest on 12/9, that had warned way back during the 2008 election that Obama would wimp out when up against the republican machine. He was sooo right. His guests told how Obama had wimped out on most, if not all fights for the middle class in his early years. Worth podcasting Thursdays msnbc countdown show and give a listen. Obama exposed for what he.... isn't. All I know is.. this last Obama stunt is the deal breaker for my support in 2012. (I always was a Hillary fan anyway)
Hopefully.. Obama will be a one term president. Sure, a republican in office 2012 would be not good, but there is something about a person/leader that shows weakness, and just plain disgust towards his own base, that turns most stomachs.
He's got to go in 2012. Period!
We made history electing him in 2008. Time to move on...

We tried to tell you guys...

 

[manimal]

That detail is ancillory and doesn't change my point - we all really agree that taxes affect demand and the economy; in spite of much rhetoric to the contrary.

Fern

Actually its not ancillary at all to the discussion at hand. Lets not overstate your position as well since we can NOT all agree that this specific tax issue will have an adverse long term negative effect. You can obfuscate all you want but raising rates 3 percent on people making over 250K is not a slam dunk to ruin the economy. If you want to parrot away with the bogus uncertainty mantra fine....


for the kids who frequent P&N who may have been in diapers during the 90s....FYI the economy was pretty good back then and MUCH better than it was during the last decade....


Can you at least say that the Bush era tax cuts had little effect on the middle class and in job creation?

 

[Brigandier]

Where is the obligatory, "You can't prove a negative"?

 

[chucky2]

Problem is that kills somewhere around 2M accountants and auditors not including corporate treasury and tax preparer.

But can you imagine the productivity gains?

Chuck

 

[JMapleton]

If there are no loans available to the consumer, they cannot express their demand by additional spending. There are no funds available to them.

So, to the extent we have people (including small businesses) that would like to spend but cannot obtain loans to fund it, that lack of loans actually suppresses demand. I believe we have this problem now to some extent, particularly for small businesses.

If you think that taxing the rich would decrease the amount of loans to small businesses you're ridiculous.

Most rich people do not hold large amounts of cash, firstly. Cash is a foolish investment.

Secondly, the Fed's loose money policy is what has loosed the credit system.

And I'd rather have money in the hands of average people than it in the bank's coffers and no one else having any money to buy anything.

You're comment is just ridiculous and not thought out. I think you know you're wrong but you just like to argue.

The loans will be there, that's a fact, no matter what the tax rate on the rich is.