The Joint Committee on Taxation found that raising the tax on millionaires (the so-called Buffet Rule) to 30% federal would raise $5 billion per year.
Worse, if the Democrats passed all of their tax increase wish list – Congress’s Joint Committee on Taxation concluded the best case scenario (if no one changes their behaviour) – would raise $82 billion…..or just 7% of the current deficit.
In short there is simply no possibility that the Fiscal Cliff will be solved without MASSIVE spending cuts. Don’t tell that to a lefty like CNN’s Candy Crowley though, as the math simply does’t fit this idiot’s fantasy….. as she proved on Sunday’s State of the Union when she pitched Tax Hikes Without Even Mentioning Spending Cuts
Where I think people are ‘stuck in stupid’ is that they think that government is the Source of Wealth. It isn’t. Government is merely a conveyor belt; it takes wealth from the citizens who make that wealth…and distributes it to others.
Some of this ‘take’ is legitimate, to pay for COMMON services such as police, fire, roads, water supply, defense, etc. But these common provisions should be basic and the government should not intrude on the capacity to make wealth.
Wealth is only created by the private sector. It’s created by people ‘making things’ and selling them. To ‘make things’ you have to INVEST money. Buy the land, the cattle, look after them, milk them, sell the milk. Build the factory, buy the raw resources, hire the workers, make the shoes, sell them. All of this must create a profit, which is then INVESTED back into the company. Or used to build another company.
The common needs are entitled to some of this profit. But not too much, because that implodes the economy.
If government takes too much then, there’s no capacity to provide that milk or those shoes.
What people like phil and quebecois don’t get is that basic formula.
And they both ignore that the government has its hand in all kinds of money sources. Income taxes are just one; what about corporate, capital, tariffs, property taxes, land transfer taxes, licence fees, sales taxes and so on? These ‘stuck on stupid’ minds don’t get it.
And, as others have noted, if you build up a population, the majority of whom are removed from the work force, from the wealth-producing actions of the economy…as is the case under Obama..and yet, you provide them with food, housing, medical care (cell phones and flat screen TVs) and so on, then, there is not only no need to work. But, the actual work force cannot support both these people AND themselves!
Obama borrows trillions to maintain His People (and get their votes). Result? He’s put the next two generations into exploding debt. All their work profits will go to pay the interest on the debt, and zilch for new roads, new jobs, etc.
And, inflation goes along with this. So, a loaf of bread costs four times what it did four years ago. But, your salary hasn’t increased fourhold.
Bankrupting western society (IS) the goal..
We’re wasting our time trying to educate leftists about their spending follies.
All the spending, all the intrusions by the nanny state, all the hands in our pockets are deliberate and organized.
They’re trying to do to us what Reagan did to the Soviets, quite successfully I might add.
Prepare folks, get and hide your guns, stack-up on supplies including gold, as currency will be useless.
It’s time we tore it all down and started over, with the words of Jefferson and Adams and others as a starting point.
I know it all sounds so conspiracy-ish, but when the other shoe drops …it won’t!
No, Romney’s income isn’t a public subsidy, phil. What an incredible statement to make. That investment income doesn’t come from the government; it doesn’t come from other taxpayers. It’s interest earned on money he puts into a corporation to help them carry out their business. It’s unfortunate that you don’t understand taxation and economics.
If X person invests his savings in a company, and also, works for a shoe company on salary, he has two forms of income. Dividends from his investment. And his salary.
The taxman taxes his salary ONCE.
The dividend money, however, is taxed TWICE. Once at the corporation level, and once at the individual level.
The money that you receive from your investments, and remember, you only get interest; you have to leave your money in that corporation…shouldn’t be taxed at the same level as your salary. Why not? Because the government has already taxed it at a very high rate!
It’s already been taxed at 35%, far more than your salary is taxed. So, you get what’s left, and you have to pay a second round of taxes on it! Whew. Not much incentive to put your savings into helping a factory manufacture anything.
I’m sorry you don’t understand this. But it’s certainly not a subsidy from the government. Remember, the government doesn’t have a RIGHT to dictate how much you earn in salary, nor how much of your savings you should put into Investments. Nor how much of your savings you should give to Charity (Romney gives 30% to charity). But, I know already that you won’t understand this.
pill said this howler: “Personal income is personal income, regardless of the source.”
Proving once again that pill has no clue. At all.
ET, approaching pill from a reason-and-facts direction is a waste of time. pill is the perfect socialist. He gets an idea in his head and it sticks there no matter what. Mostly because he’s just plain bloody minded, and partly because there’s not a lot of room in there fore more ideas to fit.
All the trolls come on here strictly for the purpose of taking a swing at “those racist conservative b@st@rds”. That’s who we are to them, they certainly aren’t going to change their minds based on anything we say. Or anything we do, either. We are fair game for abuse.
Trying to explain to pill that tax on investment income is taxing you -twice- on the same money (once when you made it, again when you invested it) or that over-taxing people on investments means less investments therefore no jobs therefore no money… this is futile.
pill may finally come to understand when he’s jobless, homeless, standing in the really long line for soup and its raining on him. But probably not. pill seems to be a member of the 47% tax consuming class, he’s unlikely to change his cells from mooch to mensch.
Not to worry, he’ll get ground under with all the other mooches when the welfare checks stop. I’m looking forward to it. Got my cluebat all sharpened and everything.
phantom, what stuns me is that phil and people like him, who have no understanding of economics, actually think that government SHOULD take more and more and more of what we earn, away from us. Why?
Certainly, for common interests such as defense, security of person and property, schools, water, roads etc. But why should more and more of our money be spent on more and more bureaucrats and food stamps and yes, subsidies to this and that solar enterprise?
And phil simply don’t understand how Investment operates in an economy. I’ll try again.
Phil, suppose ten Brave Investor people get together and invest their savings into a toy factory. They each put in ten thousand. That’s…mutter, mutter, click, click…one hundred thousand.
The factory buys equipment, resources, hires workers and gets to work.
At the end of the year, after paying all its bills, it makes a profit of one thousand. Yum, says the government, and dashes in with its request of 35% of that. …mutter, mutter..let’s see…that one thousand is now reduced to $650! Hmm.
Then, that 650 is divided up between the ten investors. They each get $65.00. Not the original $100 because, yummy, the govt stepped in. And THEN, the govt says, yum, yum again, and taxes that same original profit yet again. At 14%. So, let’s see…mutter, mutter, counting on fingers..umm, that’s $56.00.
So, the return on that original ten thousoand dollars that Brave Investor put into this toy shop is, for that year not one hundred but $56 dollars. And the govt, which did nothing, gets 44. Not bad.
The govt’s percentage of that original one hundred dollars, is 44%. That’s an incredible taxation rate.
Now, phil. Do you understand it? No?
@ ET
Try doing the math with corn cobs instead,or peas, or anything related to farming. Phil understands farming better than economics. Also has the same loathing for farmers that he has for business. Phil does not seem to understand that all taxes are already too high. That we are taxed on our earnings and then taxed again on everything our taxed earnings are used for. Often taxed several times for the same product (i.e. used cars) We even pay tax on a .038% trace gas required for life and taxed on other things disguised as user fees and service fees. He states “income is income” but fails to understand how badly abused our income is after the government at all levels is through with it. If income was truly income it would only be taxed once and that includes business. Seems to be over his head. Perfect candidate for the NDP.
ET said: “phantom, what stuns me is that phil and people like him, who have no understanding of economics, actually think that government SHOULD take more and more and more of what we earn, away from us. Why?”
Two reasons I can see. First, he most likely has -nothing- and we do, so he’s quite happy to get some of our stuff. Seeing as how he doesn’t have to steal it personally and all, its quite convenient.
Second, he gets to have revenge on all us bad people who don’t believe the One True Religion.
He’s a d1ck, basically.
Phil, deal with your anger problem.
phil – who on earth says that there is a correlation between capital gains tax and GDP growth? Where did you get that one from?
Do you seriously think that a high capital gains tax causes high GDP growth? Whew. Where did you get that from? Whew.
Are you aware that the economy operates, not just in the immediate month, but in the long term. The high capital taxes of the 1990s were an attempt by the government to cash in on the strong economic results of the previous post war decades of LOW capital gains. That didn’t work out too well. Bush reduced them to 14.8
Oh, do you know the difference between corporate taxation and capital gains taxation? Hmmm. I don’t think you do.
Again, if you remove, by taxation, the Investment money from the population, then, the economy dries up. Because there’s no money to use to set up a new business, purchase new equipment, maintain old equipment or hire workers.
So, most certainly, preferential taxation MUST reward wealth. But guess what, phil, where does wealth come from? Heh. From work. So, preferential taxation rewards wealth AND work. I’ll bet you don’t understand that.
And it’s sad that you continue to not understand that when a government taxes the SAME money, ie, from the SAME economic source, TWICE, then, it is depriving the economy of the means to Make Wealth.
And my outline of ‘double taxation’ isn’t a ‘rationale’. It’s a FACT. Facts aren’t spurious, phil. They are really, really, real.
Again, phil..work makes wealth. And work requires investment. I suggest a basic book on economics for you. You don’t understand the terms or the actual functioning of an economy.
What a lot of people seem to be missing here is that money is just an accounting system to facilitate trade among people. Rather than having to carry 50 cartloads of turnips to a vehicle dealership to buy a new truck, one can simply make a transfer of monetary symbols in exchange for a truck and the customer drives off happy he didn’t have to figure out how to get all those turnips to the dealership and the truck dealer happy he just has to put $20,000 in bills into his safe instead of trying to figure out what he can trade the turnips for.
In a world run on logic, a government central bank would create new money at the same rate that material possessions were being produced. The market would take care of assignment of value to the newly produced goods.
The only impediments on economic growth at this time are statist in nature. While the US national debt seems astronomical, a true free market economy would create wealth so quickly that the arguments over trillion dollar deficits will seem quaint in an economy with a GNP measured in tens of trillions dollars/week.
We were headed in that direction until the watermelon religion infiltrated all western governments and put them in a position analogous to a runner beginning a marathon by shooting himself several times in each foot first.
The current economic system is highly unstable and will likely collapse in the near future given the widespread lack of knowledge about chaotic systems and a marked underestimation of the probability of black swan events. In such a situation, having a large supply of gold bars will be useful only if one is bartering with someone who requires gold for industrial use.
Anyone who isn’t now converting their savings into tangible physical objects is not going to survive the collapse. Money in a savings account or invested only has value if one has a functioning symbolic exchange system. Converting money to guns, ammo, electronic goods, land, generators and other survival gear will result in one retaining most of the value of ones savings when TSHTF. People who lose all their symbolic savings may be left with nothing and they’re the ones who will attack people who’ve thought ahead; hence the emphasis on means of self defense.
One of the defenses against black swans is redundancy and this is severely lacking in the hyperspecialized global economy. I didn’t realize that most injectable drugs in Canada were produced in a single Sandoz plant. There were “manufacturing quality control issues” (probably meaning that someone forgot to bribe the right people in government) and there is a shortage of what should be readily available drugs in hospitals throughout the country. A combination of excessive statist regulation and “efficiencies of scale” result in a single point of failure causing national repercussions. A much more robust scheme would be to have multiple plants producing injectable drugs as well as letting hospital pharmacists produce injectable drug solutions (a colleague of mine said it very well to a group of irritated pharmacists when he mentioned that uneducated patients of his have absolutely no difficulty in producing injectable hydromorphone from the tablets and one would think that pharmacists should also be able to perform this simple task).
Because of government over-regulation, manufacturers are moving offshore thus putting N. America in a situation where it likely wouldn’t survive a SHTF situation. When the currency crashes, factories retain their value and are able to produce goods if they can obtain raw materials. The overinflated ego’s of manipulators of symbols who are under the delusion of creating wealth through their actions on Wall Street will be shown to have zero value (well a bit of value if they’re rendered into soap and fertilizer).
Whether or not there are sufficient manufacturing resources in N. America to survive a SHTF scenario is unclear. In the countryside and small cities, perhaps civilization will persist. Large cities are very good places to stay away from at this time.
@ Loki 4:26
“Converting money to guns, ammo, electronic goods, land, generators and other survival gear will result in one retaining most…….
All very good points. I would also recommend buying in smaller amounts from various suppliers and hiding it well so the government of the day can’t trace it, because when the SHTF it can be confiscated by desperate bureaucrats. A simple hoarding law would give them the green light to plunder for the good of the masses. Any rights we have as individuals would probably be thrown out the window. Once the warning signs of impending chaos are obvious it could already be too late for bulk purchase.
I have read some, not all comments, and note the wonder and debate of why politicians would allow the financial mess we are all seeing. I have to note an uncomfortable thought – maybe they want to collapse the system as that would be the fastest way to impliment a totalitarian system in its place. From my way of thinking, they are trying to get off the fiscal cliff as soon as possible. It’s not a bug, it’s a feature. There isn’t but two or three politibots up there for which I would give a plugged nickel, and that includes my own.
matt and others, I can see your reasoning behind fears of a deliberate attempt by certain politicians in power to destroy the freedoms, intellectual and economic, of the people in a society.
I can certainly see that in Obama’s agenda and that of the cabal that surrounds and guides that agenda. My questions are focused around – that others certainly see this and what are they doing about it?
I can only compare the slow ‘drip drip’ methodology of a takeover to that of the Third Reich; such a tactic works. But, what we are seeing is not an agenda towards economic strength but towards the economic dependency of an entire population.
Since the economic results of socialism are obvious, then, what seems to be happening, since it doesn’t seem possible to stop it at the ballot box, or in the media or even via government..since Obama ignores Congress and the rule of law…is that the businesses themselves are retreating and ‘turning in on themselves’. They aren’t investing, they aren’t hiring. This dries up the economy and, no matter how Obama raises taxes, there won’t be enough there for him to use to support his new society of dependents.
What will he do then? My point is that the actions of Investment and Production in private businesses are outside of the control of government. Obama can’t MAKE a company invest in more jobs. He can create fake businesses, ie, without an investment infrastructure, such as Solyndra, but he can’t make private businesses invest and produce. What then?
I have a much simpler theory. We give people in power far too much credit for being intelligent. A good education, greed for power and the ability to sell snake oil does not equate to common sense or logic. The vision we are being sold comes from the UN which the elite considers the temple of wisdom and the height of achievement. A “Borg” mentality does not allow for the individual to question the superior wisdom of the collective. The world would need a lot more leaders like Harper who actually question the brain power at the apex of the pecking order rather than the Obama’s that follow criteria failed throughout history. Most world leaders seem to be far more concerned with the required complicity to reach what they conceive to be the top of the social order,i.e the UN and its approval than to stand their ground with rational thinking that tells them it’s the wrong path. Many do not even have the ability. They are actually followers, not leaders. One does not need to be intelligent to be a follower.Just a 3rd rate lawyer, a community activist or used car salesman with the gift of gab and comfortable with a herd mentality of their peers. They can not see the destruction in their wake bacause they are only looking “Forward” in their quest to reach the top, which is the circle of world dominance better known as the United Nations, or the supreme leader on a smaller scale in the case of narcissists. Either way, in many cases they are completely devoid of common sense or logic. These are the people herding the free world over the cliff.
phil, what can I say. You are profoundly ignorant of basic economics.
I said, that you cannot have high taxation and high GDP. And I’ll bet that you still don’t understand the difference between capital gains taxes and corporate taxes. Your example of high capital gains taxes and high GDP growth was invalid, for the high GDP growth wasn’t a result of those high capital gains taxes! The fact that you don’t understand this – what can I do.
Read a basic book on economics. Try it. You’ll find analysis of the function of Investment and Production in any basic textbook. The fact that you don’t understand these terms or know the role these actions play in an economy simply shows your ignorance of how an economy works.
Try Henry Hazlitt’s Economics in One Lesson.
Try M. Friedman’s Freedom to Choose. Hayek’s The Road to Serfdom. Thomas Sowell’s Basic Economics.
Heck, look up the terms online.
Educate yourself, phil, don’t remain ‘stuck on stupid’. Cheers.
Otherwise, tell us: how does an economy function. Does it need any Investment money?
Does it need any money for Production?
If you remove all this money, can the economy produce any goods or services?
Tell us, phil, how does an economy function.
@ET:
Notice how he glosses over the indisputable fact that income dispensed from a corporation (in interest or dividends) is taxed twice. What you’re seeing is a distraction act.
The double taxation is taxation on individuals because individuals own shares of corporations. The money taken from corporations reduce their book value by the exact same amount of the tax. Thus, corporate taxes subtract value from individuals – the corporations’s shareholders.
But good luck getting the point across to phil without using Muppets.
Here’s an especially noteworthy angle: for corporations with a sole shareholder, the double taxation impinges on exactly the same individual. What’s theoretically interesting about the corporate tax is that it acts as a de facto wealth tax on the shareholders (or shareholder) assessed annually.
The rate of the wealth tax varies, as it depends upon how much income the corporation recieves as a percentage of its equity. And, of course, the wealth tax disappears entirely if the corporation has no taxable income.
For a sole corporation that’s a fast grower, the effective wealth-tax rate is eyebrow-raisingly high. At a 35% corporate tax rate and return on common equity of 30%, that’s more than 8.7% subtracted from the common equity in a taxation year, using the equity at the end of the taxation year as the denominator. In other words, an 8.7% tax on the wealth embodied in that corporation.
I have to hand it to the tax promulgators, though. A sliding-scale de facto weath tax is both easier to accept and less damaging than a straight wealth tax because it kicks in highest when the wealth (i.e., the corporation) enjoys fast growth – and doesn’t kick in at all for wealth that remains stagnant. Thus, it avoids the protest that a straight wealth tax would raise.
One more point, kids: when the interest rate on savings is 2%, a 2% wealth tax on savings is equivalent to a 100% tax on interest income from those savings. It’s a point that sometimes baffles, like “3% is 50% of 2%.”
One more point, kids: when the interest rate on savings is 2%, a 2% wealth tax on savings is equivalent to a 100% tax on interest income from those savings. It’s a point that sometimes baffles, like “3% is 50% of 2%.”
DM Ryan – fascinating. I’m not an accountant, but your points are fascinating. Essentially, the tax on a fast growing company reduces the value of the invested capital in that company.
Right, I see your point about 100% tax if profit (on Investment) percentage is equivalent to tax percentage.
As for phil, I simply give up; he doesn’t have a clue about how an economy operates. Heck, you don’t have to know the terms; just understand about the costs of investing, the costs of producing your goods, and what happens if taxes remove your ability to carry out these actions. Ah well.
sigh. phil. Read a book on economics. Just a basic book. It will, or maybe I should say, might prevent your making the inane comments you’ve made above.