At first glance it looks like the Democrats, to preserve the $500 million symbolic money to Planned Parenthood, agreed to more significant cuts elsewhere. Total cuts are $38.5 billion, which are a drop in the bucket relative to the impending deficit (let alone the debt). As I recall, that's more than the House Republican leadership originally asked for (before the Freshman busted up the proposal over their promise to cut $100 billion).
Posted by Mucus (Member # 9735) on :
So ... what are the 39 billion in cuts? (Kinda unsatisfied with the article, nothing obvious on Google News)
Posted by theamazeeaz (Member # 6970) on :
I'm glad there's no shutdown as it could have hurt my dissertation (long story).
Posted by Hobbes (Member # 433) on :
800+ pages long if engineering dissertations are any guideline.
Hobbes Posted by Lyrhawn (Member # 7039) on :
Near as I can tell, there haven't been specifics on cuts because they haven't really hammered them out yet. Tonight's CR lasts until Thursday, when they'll supposedly vote on the final version that lasts until the next budget in October.
From what I've read, while the GOP lost on its bid to include social reforms (defunding PP, the new health care law, the Consumer protection bureau, NPR and removing EPA powers to police greenhouse gas), they did force the Senate to offer up a vote on these various issues. None of them will make it through the Senate, or if they do, through an Obama veto, but they'll get a vote in the Senate at least. It's symbolic really. In return Reid had to give up a little more money, but no idea from where.
Looks to me like Boehner came out head, but the devil will be in the details. If he managed to defund a lot of other social programs that Democrats like, and for more value than he probably should have gotten while putting up social reforms as a red herring, it'll be a big win for him. Ironically, it probably won't be viewed as a big win since it's dramatically less than the cuts he promised.
This was all just a preamble to the real fight that's coming up. The question is whether or not they'll actually pass a worthwhile budget in October, or whether they push it off until after the election. I'd really like to see the Democrats put forward their ideas for the year, including entitlement and defense spending reform. Wait until after the GOP votes their House bill forward. That way if the GOP tries to play politics with Democrats cutting defense spending, Democrats can whack them back for cutting Medicare. It's stupid politics and I hate it, but it might keep them both in line if they're playing MAD with political nukes.
I really hate my government.
Posted by Samprimary (Member # 8561) on :
I never even gave this story much thought, because there was nearly no way the government was actually going to end up shutting down, even if they have to play the mini brinkmanship politics game with the deadline.
All it comes down to at the end is who would end up taking the biggest image hit if the government DID shut down; that party ends up making the most last-minute concessions overall, but the engine keeps going.
Posted by ambyr (Member # 7616) on :
quote:Originally posted by Samprimary: I never even gave this story much thought, because there was nearly no way the government was actually going to end up shutting down, even if they have to play the mini brinkmanship politics game with the deadline.
You should have gone into the business of selling shut-down insurance packages to federal employees, then; you could have made a lot of money. Everyone in my office was convinced we were going to be shut down.
I wonder if anyone will ever do an analysis into how much the "almost" shut-down cost the government? Lacking further guidance Friday afternoon, we went ahead and prepared for a utility shut-off, unplugging all machines and bringing things off-line. A not insignificant number of manhours went into that, and a not insignificant number will go into bringing everything up to speed on Monday. Not to mention the cost of developing and printing all the shutdown FAQ packets . . .
Posted by Samprimary (Member # 8561) on :
oh boy, progressive commentary!
quote:For the last time: the Hyde Amendment prohibits any federal funding for abortion. Planned Parenthood receives federal funding through the Title X program. That money CANNOT be used for abortion. Planned Parenthood pays for abortion care (just 3 percent of its services) through privately raised funds.
Contraception accounts for 35 percent of PP services. According to the Guttmacher Institute, 99 percent of sexually active women age 15-44 have used some form of contraception.
That’s what Republicans were willing to shut down the government over. Condoms. Birth control pills. Cancer screenings. Breast exams. STI tests. For men and women who wouldn’t otherwise be able to access that care. Republicans like to say there are plenty of other facilities besides PP that provide low or no cost reproductive health care. You know what? There aren’t. Andrea Grimes tried to find them. She recently lost her job and needs regular Pap smears to make sure she doesn’t develop cervical cancer. Her state representative told her there were alternatives in PP in the Dallas area. She called around to find out if that was true. The only clinic she could find had an opening in May.
Her local Planned Parenthood could fit her in that same afternoon.
If Grimes had that much trouble finding health care in a large metro area like Dallas, you can bet women in other large cities do, too, not to mention smaller cities and towns. I wrote a few weeks ago about my difficulty finding a gynecologist in a smaller town, and I was lucky enough to have health insurance. The doctors just weren’t accepting patients.
Military families came within hours of not having paychecks. Senators and representatives would have continued to be paid during a shutdown, while soldiers who risk their lives for our country would do without. National parks would have closed. Tax returns would have been delayed.
Over birth control. Republicans demanded that Planned Parenthood be defunded, and Democrats (luckily) were just as adamant that PP not be touched. Although PP was not affected when a budget agreement was reached, Senate Majority Leader Harry Reid agreed to hold votes in the Senate on health care reform and Planned Parenthood; bills to repeal and defund those programs passed in the House but don’t stand much chance of getting through the Senate. Also, women who live in Washington, D.C., got a raw deal. The budget will prevent any federal or local funds from being used for abortion in D.C.
This is why the stalemate broke and the republicans relented: they were within an hour of hosing themselves and giving the Democrats tons of very useful ammunition, and they knew it, so they got to take the last swerve in this game of political chicken. "Support the troops" gets whitewashed with things like "Hey by the way the troops aren't being paid anymore because the house republicans don't want to give women access to birth control."
Posted by Lyrhawn (Member # 7039) on :
quote:Originally posted by Samprimary: I never even gave this story much thought, because there was nearly no way the government was actually going to end up shutting down, even if they have to play the mini brinkmanship politics game with the deadline.
All it comes down to at the end is who would end up taking the biggest image hit if the government DID shut down; that party ends up making the most last-minute concessions overall, but the engine keeps going.
Much of what I've read says that Obama could have pushed this to a shut down to score political points (as many believe a shutdown would have benefited Democrats far more), but he chose not to. Not sure how true that is, but if true, seems like the highwater mark of his leadership in Congress.
Posted by Samprimary (Member # 8561) on :
I don't disagree with the 'could have benefited democrats far more' part. The fallout against the Republicans — especially the house Republicans — would have been pretty wide-reaching, and it would also sync well with the Michigan brouhaha to paint the GOP as a party that has overstepped and needs to be brought back into line (as a firmly minority party).
But at the same time, they're not totally dumb and they know that would have been coming, so they would have shoved out more and more concessions up to the point where it would look bad and assign blame if the Democrats didn't take them.
Which is sort of what happened anyway.
Posted by Lyrhawn (Member # 7039) on :
We'll see. It all depends on where the cuts came from. Republicans gave ground on things they were NEVER going to get anyway, and got straight up or down votes in the Senate to put people on record, which is also what they really wanted. It's a set up for the 2012s already. And they got tens of billions more in cuts from Dems. I'd say the GOP came out on top here, or at least, will be able to paint themselves much better as having won, unless Democrats actually stay on the offensive.
Posted by Lyrhawn (Member # 7039) on :
What's going to be interesting now is Boehner's talk about not voting for an increase to the debt ceiling without concessions from Democrats. Not sure how this one will play out, but at the outset, it seems a pretty ridiculous position to take given what's at stake.
Posted by TomDavidson (Member # 124) on :
Had the shutdown happened, my wife's boss would have had to kill fourteen cows.
Posted by FoolishTook (Member # 5358) on :
quote:This is why the stalemate broke and the republicans relented: they were within an hour of hosing themselves and giving the Democrats tons of very useful ammunition, and they knew it, so they got to take the last swerve in this game of political chicken. "Support the troops" gets whitewashed with things like "Hey by the way the troops aren't being paid anymore because the house republicans don't want to give women access to birth control."
Because cutting funding to Planned Parenthood would suddenly make birth control disappear.
I think the public is far more aware of what is actually going on than the republicans or democrats or Barack Obama understand. The cuts need to come from everywhere and everyone. If the republicans only cut funding from programs they dislike, it's not going to work out for them.
If the democrats keep pretending that every spending cut is the equivalent of baking kittens into pies, they are digging their own graves (in terms of the election).
This problem of the deficit isn't going to go away until everyone is willing to sacrifice a little.
At this point, I do think the republicans will come out on top whether they deserve it or not. They at least look like they're serious about cutting the deficit, while the democrats appear to be out of touch.
Posted by Lyrhawn (Member # 7039) on :
Yeah, but the narrative is starting to turn, as far as the Ryan Budget goes, as the GOP being serious about cutting the deficit at the expense of the poor and the elderly. That's not going to fly either. The cognitive dissonance held by Congress IS shared by most Americans. We want all that we want, and don't want to pay any more for it. That's destined to hurt both sides, but at the end of the day, I think Republicans more so.
Supposedly Obama is going to release his new budget on Wednesday in answer to the Ryan Budget. It'll tackle entitlements (perhaps not SS), and even defense spending. And unlike his last one, or Ryan's, there are supposed to be some specific dollar amounts rather than only having targets. Then the conversation can really start, I suppose.
I'll say one thing about the GOP, I think they're full of crap, and wrong, but I'm glad, to degree, that they're finally forcing the issue. I think their solutions to the problem are wrong, but at least we're finally talking about it.
Posted by scholarette (Member # 11540) on :
Foolish Took- there are many women who are dependent on planned parenthood for their gynecological care. A woman in Dallas wrote about her trouble getting a pap smear (which is a requirement for getting oral contraceptives) even with insurance while ignoring planned parenthood. It would have taken several months. Once she added planned parenthood to the options, it took a day. Unfortunately, women's health is a low priority and planned parenthood is one of the few resources available. In some figures, the number of abortions would increase by 400,000 a year without the contraceptives provided by pp.
Posted by TomDavidson (Member # 124) on :
quote:the GOP being serious about cutting the deficit at the expense of the poor and the elderly
Ryan's plan doesn't even reduce the deficit. It cuts the budget and puts more money back in the hands of the wealthy at the expense of the poor and elderly, but leaves the deficit largely untouched.
Posted by fugu13 (Member # 2859) on :
quote:Ryan's plan doesn't even reduce the deficit. It cuts the budget and puts more money back in the hands of the wealthy at the expense of the poor and elderly, but leaves the deficit largely untouched.
While you might not like the plan, this is not true. The plan has been scored as reducing the deficit greatly over the next ten years and some, and resulting in surplus by around 2040. That's not "largely untouched".
Posted by TomDavidson (Member # 124) on :
quote:The plan has been scored as reducing the deficit greatly over the next ten years and some, and resulting in surplus by around 2040.
Scored by whom? I'm disinclined to grant its growth claims, for example.
Posted by Swampjedi (Member # 7374) on :
quote:Originally posted by Lyrhawn: Yeah, but the narrative is starting to turn, as far as the Ryan Budget goes, as the GOP being serious about cutting the deficit at the expense of the poor and the elderly. That's not going to fly either. The cognitive dissonance held by Congress IS shared by most Americans. We want all that we want, and don't want to pay any more for it. That's destined to hurt both sides, but at the end of the day, I think Republicans more so.
Supposedly Obama is going to release his new budget on Wednesday in answer to the Ryan Budget. It'll tackle entitlements (perhaps not SS), and even defense spending. And unlike his last one, or Ryan's, there are supposed to be some specific dollar amounts rather than only having targets. Then the conversation can really start, I suppose.
I'll say one thing about the GOP, I think they're full of crap, and wrong, but I'm glad, to degree, that they're finally forcing the issue. I think their solutions to the problem are wrong, but at least we're finally talking about it.
I'm unsure that the Republicans are going to hurt more because their arrangement of deck chairs on the Titanic isn't as cool as the Democrats' arrangement of chairs.
FWIW, I agree with you that the Republicans are full of crap.
Posted by SenojRetep (Member # 8614) on :
Summary: Obama is a bad negotiator, but Boehner should have asked for more cuts in his initial proposal.
Silver's analysis largely elides the role of the Senate, focusing instead on Obama and House Republicans, but I think the answer of how we ended up where we did resides in the analysis of all three. If you figure (as Silver does) that the 'tipping point' House member wanted cuts of around $50 billion, and that Obama asked for an increase of $23 billion, and that the Senate falls ideologically closer to Obama than the House, I don't see any way of arguing this isn't a big win for the GOP.
On top of that, the GOP got up/down votes in the Senate on defunding Health Care Reform and Planned Parenthood, with consequent electoral disadvantages for moderate Senate Dems. In the end, I agree more with the several analysts Silver cites at the top of his column rather than his analysis: the GOP won this budget fight, and they won it as soon as the Dems made a counterproposal for 'only' $31 billion in cuts.
Posted by FoolishTook (Member # 5358) on :
quote:Foolish Took- there are many women who are dependent on planned parenthood for their gynecological care. A woman in Dallas wrote about her trouble getting a pap smear (which is a requirement for getting oral contraceptives) even with insurance while ignoring planned parenthood. It would have taken several months. Once she added planned parenthood to the options, it took a day. Unfortunately, women's health is a low priority and planned parenthood is one of the few resources available. In some figures, the number of abortions would increase by 400,000 a year without the contraceptives provided by pp.
I have no problem with this argument. It's the jumping to wild conclusions that republicans are trying to get rid of birth control that is not going to win points for democrats. Birth control would still exist.
quote:Posted by Lyrhawn: Yeah, but the narrative is starting to turn, as far as the Ryan Budget goes, as the GOP being serious about cutting the deficit at the expense of the poor and the elderly.
Here's that sweeping generalization. How does this hurt the poor? How does this hurt the elderly?
Personally, I have no problem with a small tax increase. I mean, an across the board tax increase, for Social Security, Medicaid/Medicare, and income taxes, closing some of the loopholes that let the very, very rich get by with paying very little. But we can't tax our way out of this.
In fact, I threaten to march on Washington in a Betsy Ross thong, tea bags, and nothing else if all we get as a correction is a tax increase and more government spending. This would not be pretty, and the government should take this seriously. There are some things you can't UNSEE.
Swampjedi, why are we arranging deck chairs? What is really going to make this work? I'm not in favor of sitting back and watching the stupidity of our government deal a fatal blow to this country. I'm willing to sacrifice on my end, and I think the best bet is to spread the burden on everyone, with spending cuts and tax increases. But everyone has to be willing to sacrifice a little, instead of heaving the burden onto someone else.
Posted by TomDavidson (Member # 124) on :
quote:But we can't tax our way out of this.
Why not? The rich are severely undertaxed.
Posted by Samprimary (Member # 8561) on :
We not only can tax our way out of this, but the upcoming forced correctional methods will probably unavoidably do so.
It's simple, we, uh, tax the batman
Posted by Glenn Arnold (Member # 3192) on :
This is an experiment (I'll tell you my hypothesis afterwards) I'm just going to see what the reaction to this sentence is:
"A tax and spend policy is what got us out of the great depression."
Posted by TomDavidson (Member # 124) on :
I think war and technical advances in manufacturing and transportation got us out of the Great Depression, but a tax and spend policy is what helped us survive it.
Posted by Raymond Arnold (Member # 11712) on :
Tee hee. I know what the hypothesis is.
[ April 12, 2011, 01:09 AM: Message edited by: Raymond Arnold ]
Posted by Rakeesh (Member # 2001) on :
FoolishTook, who aside from the very far left is seriously suggesting that Republicans are trying to completely eliminate all birth control everywhere? That's a red herring you've latched onto for some reason.
What is much less unambiguous is that there are pretty strong elements within conservative politics that would like to end PP, and that would as we've seen have a prompt and serious impact on a whole host of women's health care, not limited to birth control.
Which, by the way, elements within the GOP that are disproportionately powerful in the party right now (it coming on primary season), the GOP is more amenable than it would otherwise be to such measures, because it's got to pander to it's far-right base.
That's why we get to hear more about Obama bein' a sikrit Muslim furriner right now, for example.
Posted by Swampjedi (Member # 7374) on :
quote:Originally posted by FoolishTook: Swampjedi, why are we arranging deck chairs? What is really going to make this work? I'm not in favor of sitting back and watching the stupidity of our government deal a fatal blow to this country. I'm willing to sacrifice on my end, and I think the best bet is to spread the burden on everyone, with spending cuts and tax increases. But everyone has to be willing to sacrifice a little, instead of heaving the burden onto someone else.
My snark was aimed at the politicians - the Republicans think cutting entitlements is the way to go while cutting taxes, and the Democrats want to raise taxes and leave entitlements alone (in general). Neither of those can reasonably fix the problem. There needs to be both.
This fighting over pennies here and there is just theater.
Posted by Rappin' Ronnie Reagan (Member # 5626) on :
What annoys me about this whole situation is that everyone has just gone along with the idea that we have to cut the budget and reduce the deficit right now and that it's the most important thing.
Posted by Swampjedi (Member # 7374) on :
I can somewhat agree with that. I do think that cutting spending and raising taxes during a downturn isn't the best idea.
However, political momentum can be somewhat unreliable. I'll grant that there isn't much momentum, but some is better than none.
Posted by Lyrhawn (Member # 7039) on :
Of course, the military is spared from any major hits. Looks like most of it falls on the poor and infrastructure projects.
quote:How does this hurt the poor? How does this hurt the elderly?
Well, as far as the Ryan Budget goes, without a magical mechanism to lower the price of healthcare, capping payments to the elderly for their healthcare means they have to make up the rest out of their pockets. He also wants to cut Medicaid. Hurts the poor. Look at the targets of this considerably smaller budget cut. And yet in the Ryan Budget, the wealthy actually get ANOTHER tax cut. Doesn't really seem like burden sharing to me. As Tom said, a lot of his budget makes dramatic assumptions about what has to happen to make his numbers work, and I'm not willing to grant that all of them are guaranteed or even likely.
The final plan is going to have to have a combination of spending cuts to entitlements, as well as big cuts to defense, in concert with a tax increase. Time to pay for the free ride we've been getting for the last decade. We have to do it in a way that doesn't gut government spending so bad that the economy tanks again. That means new revenue.
Posted by kmbboots (Member # 8576) on :
quote:Originally posted by FoolishTook:
quote:Foolish Took- there are many women who are dependent on planned parenthood for their gynecological care. A woman in Dallas wrote about her trouble getting a pap smear (which is a requirement for getting oral contraceptives) even with insurance while ignoring planned parenthood. It would have taken several months. Once she added planned parenthood to the options, it took a day. Unfortunately, women's health is a low priority and planned parenthood is one of the few resources available. In some figures, the number of abortions would increase by 400,000 a year without the contraceptives provided by pp.
I have no problem with this argument. It's the jumping to wild conclusions that republicans are trying to get rid of birth control that is not going to win points for democrats. Birth control would still exist.
Yes. But the people who need it most would have less access to it. It doesn't matter that it "exists" if a woman can't get it.
Posted by Darth_Mauve (Member # 4709) on :
You know, all this bickering about the secret devious plans of the Republicans to hurt the poor are silly and carry about as much weight as the Beckian theories that the Democrats are secretly in service to destroy America.
Yes, there are many in the Republican party, many wealthy, and many in the Tea Party movement who do want to cut services for the poor.
Why?
Because they don't see them as helping themselves.
I see the Tea Party as just the Senior Citizens Version of the Me Generation. Its the "Me" Party. If it doesn't help ME then I don't want the government to pay for it. If it does help me, then everyone should have the government pay for it.
There is no hatred or bigotry involved in wealthy Republican's demanding the shut down of the Planned Parenthood. It has nothing to do with dislike for the poor.
They simply don't matter.
Since those who support the Me Party platform don't gain anything from PP being funded, then they don't want it getting Their Tax Dollars.
They are a generation brought up to believe its all about the "Me" and they don't care about the rest.
I'm just ashamed there are so many of them that are my age, in my country, and make me look bad.
Posted by kmbboots (Member # 8576) on :
That doesn't account for the many in the Tea Party movement who do benefit from services for the poor and from Social Security and MediCare.
Posted by SenojRetep (Member # 8614) on :
quote:Originally posted by kmbboots:
quote:Originally posted by FoolishTook:
quote:Foolish Took- there are many women who are dependent on planned parenthood for their gynecological care. A woman in Dallas wrote about her trouble getting a pap smear (which is a requirement for getting oral contraceptives) even with insurance while ignoring planned parenthood. It would have taken several months. Once she added planned parenthood to the options, it took a day. Unfortunately, women's health is a low priority and planned parenthood is one of the few resources available. In some figures, the number of abortions would increase by 400,000 a year without the contraceptives provided by pp.
I have no problem with this argument. It's the jumping to wild conclusions that republicans are trying to get rid of birth control that is not going to win points for democrats. Birth control would still exist.
Yes. But the people who need it most would have less access to it. It doesn't matter that it "exists" if a woman can't get it.
Surely there must be some rich, liberal charities willing to pay for poor women's birth control, no? Maybe you could lobby the Catholic Charities...
Posted by Samprimary (Member # 8561) on :
quote:Originally posted by Glenn Arnold: This is an experiment (I'll tell you my hypothesis afterwards) I'm just going to see what the reaction to this sentence is:
"A tax and spend policy is what got us out of the great depression."
wat
/alternate response is a Protoss voice going "WE REQUIRE ADDITIONAL ELABORATION"
Posted by FoolishTook (Member # 5358) on :
Dark_Mauve, is it possible that some of us republican, conservative, Tea Partiers question the notion that it's the government's responsibility to help everyone in need?
I've seen truly poor people flatly denied services because they didn't meet certain requirements. The safety net failed them and will continue to fail many, because the government is too far removed from the problem to see it clearly. This, while millions of dollars are wasted on people who don't need it.
I don't have an issue with people getting what they don't deserve. I do have a problem with people expecting it, even demanding it.
I have an even bigger problem with people demanding and expecting what they don't deserve and they don't need.
quote:That doesn't account for the many in the Tea Party movement who do benefit from services for the poor and from Social Security and MediCare.
Yep. And many in the Tea Party will bail out once they discover they will be the ones who have to sacrifice as well.
I still cling to the idea that everyone should sacrifice, even the poor. If that means Miss Jones pays $3 a month for birth control instead of getting it free, so be it. If that means I pay $20 a month extra on income/SS/Medicare/Medicaid taxes, so be it. If that means giant corporations lose some of their loopholes, the congress and senate take a salary cut, and the military has to do with less, so be it.
So far, there is no proposed budget that comes close to what I want. Paul Ryan's is a start, however.
Posted by Rappin' Ronnie Reagan (Member # 5626) on :
quote:Originally posted by FoolishTook: This, while millions of dollars are wasted on people who don't need it.
Can you give some examples?
quote:If that means giant corporations lose some of their loopholes, the congress and senate take a salary cut, and the military has to do with less, so be it.
Yeah... I don't think that's gonna happen.
Posted by TomDavidson (Member # 124) on :
Tell you what, FoolishTook: since I think we all agree that far fewer people will suffer if military funding is cut and giant corporations lose some tax loopholes than if old people have to start paying more for medicine, let's focus on doing those things first, 'k?
Posted by kmbboots (Member # 8576) on :
At what wealth level do you think people don't need government services? I could see, for example, cutting MediCare benefits to the very wealthy. Is that the kind of thing you are talking about?
Posted by SenojRetep (Member # 8614) on :
quote:Democrats claim their budget cuts deficits over 10 years by $1.2 trillion more than President Obama’s 2012 budget proposal, which claimed $1.1 trillion in deficit savings.
The House Republican budget claims to achieve $4.4 trillion in deficit savings compared to the Obama budget.
The Democratic alternative will be offered as an amendment to the 2012 budget, which will come to the House floor Thursday.
To achieve the cuts, Democrats look hard at the Pentagon. Part of the additional savings comes from spending $308 billion less on security and defense over 10 years. It also cuts $309 billion from overseas contingency spending, assuming that the U.S. is out of Iraq by the end of 2011 and Afghan forces are in charge of their war by 2015.
Other details on how the Van Hollen alternative achieves the extras savings are sketchy.
Nothing on controlling increases in Medicare and Medicaid. Here, van Hollen punts on the question, stating that he would confer with other House Democrats about the issue.
One thing to note is the direction of negotiations. The Democrats' proposal decreases deficits by $1.2 trillion (according to them) over the Obama-proposed budget. From what I can tell, the two proposals still straddle the Simpson-Bowles commission proposal, with the Ryan budget embracing entitlement and tax reform but keeping the Bush taxes and maintaining defense spending levels, and the Democrats' proposal (in its current form) cutting defense and increasing some taxes, but not addressing entitlement growth or tax reform.
I think this proposal makes it more likely that President Obama's budget proposal in his speech tonight will largely embrace Simpson-Bowles, given his penchant for triangulation and the strategic positioning of the two House proposals.
<edit>The above-linked blog post from The Hill has been updated, replacing the adjective "sketchy" with "unclear" in relation to the Democrats' claimed budget savings. Such is the danger in citing ephemeral sources, I suppose.</edit>
Posted by SenojRetep (Member # 8614) on :
Looks like the deficit reduction goal is about halfway between the Democrats' and Republicans' plans, with a proposed increase in taxes on the over $250,000 crowd and soft caps on Medicare. This according to the article; for the actual proposal we'll have to wait for the speech at 1:35 pm (EST). But the article makes the point that early hints point to a strong alignment with the Simpson-Bowles commission recommendation.
<edit>According to the White House press release, the budge will "protect the investments we need to grow our economy, create jobs, and win the future." I find this 'win the future' catchphrase that Obama introduced in the SotU (using it 11 times in the speech) is not wearing well. It sounds too gimmicky, too corporate-speak, under repeated use. Or maybe it's just me. Anyway, if I were the speech writer who coined it (or, uh, borrowed it) I might rethink my chosen career.</edit>
Posted by Lyrhawn (Member # 7039) on :
He's been trying to recapture the "on-message" approach he had during the campaign that quickly left when he became president.
Bush was quite excellent at this. Remember all his backdrops with the catchphrase of the day behind it. The difference I think is that for the most part the GOP took his talking points and ran with them. Obama is simply too aloof from Congressional Democrats to push a cohesive message.
Posted by SenojRetep (Member # 8614) on :
I missed the speech, but I've read several articles covering it and I'm disappointed. Obama still seems to believe (wrongly, IMO) that we can 1) keep Bush tax cuts on the middle class and 2) avoid at least soft caps on Medicare and Medicaid.
For all those complaining that Ryan's budget is unrealistic, I'd be interested if you think Obama's is any more grounded. From where I'm standing it looks like wishful thinking, with almost all the pain pushed off to six years in the future, and no real consideration of the inevitable growth of healthcare costs. That's not meant to be an in depth analysis, just a snap judgment based on the broad strokes being reported in the media.
Posted by Lyrhawn (Member # 7039) on :
Obama was pretty clear about the difference between his and Ryan's solution to Medicare. Ryan's plan is to cap payouts, Obama's is to (attempt to) make healthcare fundamentally cheaper for everyone so that its cost actually falls, rather than leaving the healthcare apparatus entirely untouched.
I think Obama is closer to right here than Ryan is. Ryan's plan does nothing to actually help anyone with the spiraling cost of healthcare, it just foists the problems off on individuals who are ill-equipped to deal with it. Read his speech, you still might not agree with it, but it allays some of your negative impressions.
One of the things I noticed in the speech was that he refers to tax cuts as spending, which I thought was an interesting way to frame the debate. Personally I think the middle class tax cuts should be HALF rolled back. As he noted, incomes for the middle class have actually fallen in the past decade, and have dramatically risen for the wealthy. Roll back theirs, and let the middle class keep half of theirs. I think that's fair.
What I'm really interested in seeing is the Gang of Six budget that will come out of the Senate soon. I think that's the real in-between budget that many have been looking for, and it will likely follow the Debt Commission recommendations even more closely.
On the bright side, both sides seem to be on board with a number of issues, like tax code reform, tax decrease in the corporate tax rate, ending most tax deductions, etc.
Posted by Samprimary (Member # 8561) on :
quote:I think Obama is closer to right here than Ryan is. Ryan's plan does nothing to actually help anyone with the spiraling cost of healthcare, it just foists the problems off on individuals who are ill-equipped to deal with it.
quote:Just over a year ago, I wrote a column praising Rep. Paul Ryan’s Roadmap. I called its ambition “welcome, and all too rare.” I said its dismissal of the status quo was “a point in its favor.” When the inevitable backlash came, I defended Ryan against accusations that he was a fraud, and that technical mistakes in his tax projections should be taken as evidence of dishonesty. I also, for the record, like Ryan personally, and appreciate his policy-oriented approach to politics.
So I believe I have some credibility when I say that the budget Ryan released last week is not courageous or serious or significant. It’s a joke, and a bad one.
For one thing, Ryan’s savings all come from cuts, and at least two-thirds of them come from programs serving the poor. The wealthy, meanwhile, would see their taxes lowered, and the Defense Department would escape unscathed. It is not courageous to attack the weak while supporting your party’s most inane and damaging fiscal orthodoxies. But the problem isn’t just that Ryan’s budget is morally questionable. It also wouldn’t work.
Don’t take it from me. Take it from Robert Reischauer, who directed the Congressional Budget Office from 1989 to 1995 and now leads the Urban Institute. “If this is a competition between Ryan and the Affordable Care Act on realistic approaches to curbing the growth of spending,” Reischauer says, “the Affordable Care Act gets five points and Ryan gets zero.” But Ryan would repeal the Affordable Care Act and replace it with his own wishful plan. In doing so, he makes it harder, not easier, for us to balance the budget.
To understand why Reischauer gives Ryan a zero, you need to understand the technical trick that gives Ryan his savings. His proposal says the federal government’s contributions to Medicare and Medicaid can’t grow at more than the rate of inflation. Then he told CBO to score his plan based on that assumption. That’s where his money comes from. But it’s nonsense.
quote:Health-care costs don’t grow at the rate of inflation. Ever. Previously, Ryan acknowledged that. His Roadmap capped federal contributions between inflation and the actual cost of medical care. He then developed a more bipartisan version of the idea with Alice Rivlin, who founded the Congressional Budget Office and directed the Office of Management and Budget under Bill Clinton. That one was capped at the growth of GDP plus 1 percentage point. Both targets were far more plausible than the fantasy target Ryan is now using.
So why the switch? He has not said. I suspect he couldn’t make the numbers add up without tax increases. The problem now, however, is that his numbers don’t add up at all. Rivlin — a budget hawk’s budget hawk — has abandoned the proposal that Ryan says she helped write. “The growth rate is much, much too low,” she says.
Rivlin’s worry is that Ryan’s plan won’t control costs so much as shift them to seniors. And the CBO agrees with her. It concluded that Ryan’s privatization plan would actually add to Medicare’s costs. In 2030, traditional Medicare insurance, CBO estimates, would only cost 60 percent as much as the private options Ryan is offering. But under Ryan’s plan, seniors would pay two-thirds of the cost, while under traditional Medicare, they’d pay only 25 percent.
That’s not cost control. That’s cost-shifting. And even assuming Congress would turn a deaf ear to the cries of seniors, it wouldn’t solve our nation’s fiscal problems. It would just shunt them off the federal budget and onto family budgets, and make them worse.
quote:One refrain we’ve heard about Ryan’s budget is that it may be flawed, but at least it’s a starting point. Maybe so, but it’s the wrong one. Taking Ryan’s zero and making it into a five would be a lot harder than taking the Affordable Care Act’s five and making it into a seven — and the Affordable Care Act has the advantage of already being law, not just a glimmer in a congressman’s eye.
Posted by Glenn Arnold (Member # 3192) on :
quote:/alternate response is a Protoss voice going "WE REQUIRE ADDITIONAL ELABORATION"
What part of experiment didn't you understand? Well, I guess no one pays any attention to my posts anyway, so I guess I got my answer.
Posted by Dobbie (Member # 3881) on :
I don't understand the "ex" part. I mean, did it used to be a periment?
Posted by Lyrhawn (Member # 7039) on :
quote:Rivlin’s worry is that Ryan’s plan won’t control costs so much as shift them to seniors. And the CBO agrees with her. It concluded that Ryan’s privatization plan would actually add to Medicare’s costs. In 2030, traditional Medicare insurance, CBO estimates, would only cost 60 percent as much as the private options Ryan is offering. But under Ryan’s plan, seniors would pay two-thirds of the cost, while under traditional Medicare, they’d pay only 25 percent.
I really think this is the most important part. It's not even just about shifting costs onto seniors, it's that putting them on private insurance will raise the total amount spent on health care. Medicare is cheaper than private insurance. At this rate, it would make more sense to keep them on Medicare, but cap their payments and make them pay the government instead of a private insurer. At least that rate, the costs that are foisted off onto them would be less so than they'd face in the open market.
This is something that needs to be emphasized.
Posted by Samprimary (Member # 8561) on :
quote:Originally posted by Lyrhawn: This is something that needs to be emphasized.
ON IT
quote: In 2030, traditional Medicare insurance, CBO estimates, would only cost 60 percent as much as the private options Ryan is offering. But under Ryan’s plan, seniors would pay two-thirds of the cost, while under traditional Medicare, they’d pay only 25 percent.
Posted by Raymond Arnold (Member # 11712) on :
quote:Originally posted by Glenn Arnold:
quote:/alternate response is a Protoss voice going "WE REQUIRE ADDITIONAL ELABORATION"
What part of experiment didn't you understand? Well, I guess no one pays any attention to my posts anyway, so I guess I got my answer.
To be fair your post was cryptic and vague. I understand why you phrased it that way, but there's nothing wrong with actually explaining your thought if no one took your bait.
Posted by Lyrhawn (Member # 7039) on :
Samp -
Excellent. I was worried when you didn't bold italicize it all the first time that you weren't giving the information its due. Posted by capaxinfiniti (Member # 12181) on :
quote:Originally posted by TomDavidson:
quote:But we can't tax our way out of this.
Why not? The rich are severely undertaxed.
Walter Williams addressed this line of thought in a recent editorial:
quote:This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money? According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It's not even yacht and Lear jet money. All told, households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year.
Seizing all the assets of the richest Americans would amount to little more than killing the goose to get at the eggs - it's a one time deal. you can't go back next year and shake them down again for a few more billion.
Taxing only the rich isn't a reasonable approach to reduce the debt at the rate which is needed, even if you raised the taxes on the wealthy to an absurd level. This is why rational voices call for across-the-board cuts.
Posted by MattP (Member # 10495) on :
That article does come confusingly bizarre math. The thought experiment suggests a 100% tax to cover all government expenditures with no other revenue. Fortunately, that's not the problem we need to solve. Rather, we have deficit which is substantially below $3.7T (~1.7T for 2010) which needs to be offset by a number of tax increases and spending cuts. Increasing the tax on the wealthy can substantially cut into that deficit.
Posted by Lyrhawn (Member # 7039) on :
I've yet to hear a single person suggest that raising taxes on the wealthy is the ONLY thing that needs to be done to solve the budget problem. Everyone suggesting it pairs it with cuts and revenue enhancements in other areas. Besides, earnings are up the wealthy and down for everyone else. It seems that raising their taxes just to keep pace with this changed reality would at worst just keep the status quo.
Posted by Mucus (Member # 9735) on :
quote:Originally posted by capaxinfiniti: Seizing all the assets of the richest Americans would amount to little more than killing the goose to get at the eggs - it's a one time deal.
Technically, your quote refers to calculations done on household income while your interpretation refers to assets.
Agreed, it would be a one-time deal, but let's not minimize the power of seizing all the assets of the richest Americans Posted by capaxinfiniti (Member # 12181) on :
quote:Originally posted by Mucus:
quote:Originally posted by capaxinfiniti: Seizing all the assets of the richest Americans would amount to little more than killing the goose to get at the eggs - it's a one time deal.
Technically, your quote refers to calculations done on household income while your interpretation refers to assets.
Agreed, it would be a one-time deal, but let's not minimize the power of seizing all the assets of the richest Americans
You are correct. I was attempting to continue with Walter's hypothetical in order to illustrate the size of the problem. I should have started that thought with "Even seizing.." to identify this. The assets do amount to a significant sum of money but the negative consequences of seizing these assets puts the proposal well beyond the realm of possibility.
Posted by TomDavidson (Member # 124) on :
Heck, creating a new 45% tax bracket at $400,000 and removing corporate tax loopholes would result in a budget surplus, no cuts needed at all. I'd still do some cuts anyway, but the rich have been coasting on the backs of actual Americans for years now, and it's time we put the brakes on.
Posted by Mucus (Member # 9735) on :
quote:Originally posted by capaxinfiniti: ... I was attempting to continue with Walter's hypothetical in order to illustrate the size of the problem.
I know, I'm just making sure we have the correct sizes in mind. The deficit isn't really a big deal in terms of policy, the barriers are really just political.
Posted by katharina (Member # 827) on :
quote:coasting on the backs of actual Americans
If you make more than $250,000 a year, you are no longer an American?
Now there's a winning political catch phrase. "Give us your money. You don't exist."
Posted by Raymond Arnold (Member # 11712) on :
quote:Originally posted by katharina:
quote:coasting on the backs of actual Americans
If you make more than $250,000 a year, you are no longer an American?
Now there's a winning political catch phrase. "Give us your money. You don't exist."
Not that it matters (much) for your actual point, but I'm intrigued as to why you said "250,000" when Tom just EXPLICITLY said "400,000."
Posted by katharina (Member # 827) on :
Because the generally bandied about definition of "the rich" has been those making more than $250,00. Tom's first sentence doesn't change that.
But you're right - that's irrelevant to my point. Rhetoric like "actual Americans" is neither effective or...anything else good.
And bringing up coasting in general isn't a good point, because the proper response would be to point out that the people who truly pay no income taxes are could therefore be accurately said to be coasting are not at the TOP of the income heap.
Posted by Mucus (Member # 9735) on :
It depends
quote:How to Pay No Taxes Eleven shelters, dodges, and rolls—all perfectly legal—used by America's wealthiest people
The true effective rate for multimillionaires is actually far lower than that indicated by official government statistics. That's because those figures fail to include the additional income that's generated by many sophisticated tax-avoidance strategies. Several of those techniques involve some variation of complicated borrowings that never get repaid, netting the beneficiaries hundreds of millions in tax-free cash. From 2003 to 2008, for example, Los Angeles Dodgers owner and real estate developer Frank H. McCourt Jr. paid no federal or state regular income taxes, as stated in court records dug up by the Los Angeles Times. Developers such as McCourt, according to a declaration in his divorce proceeding, "typically fund their lifestyle through lines of credit and loan proceeds secured by their assets while paying little or no personal income taxes."
According to the New York Times, it is 10% of population who pay no taxes at all, including state and payroll. If they do pay payroll taxes, they get more back from the EITC than they paid.
This isn't a commentary whom to squeeze to get more money to pay for the retirement of people who didn't save enough.
It is instead an objection to excluding anyone from the list of "actual Americans" while holding your hand out to them.
Posted by Mucus (Member # 9735) on :
I was responding to this.
quote:Originally posted by katharina: ... the people who truly pay no income taxes are could therefore be accurately said to be coasting are not at the TOP of the income heap.
Posted by Destineer (Member # 821) on :
You're right, Tom's not diplomatic enough to make it as a tax collector.
Now, back to the point. A 45% top bracket rate is much less than what we had back in the '50s. One might be concerned, though, that in the present environment it would lead some of the biggest earners to take their business overseas. On the other hand, it may be that those who can do this already have.
Posted by TomDavidson (Member # 124) on :
Anyone who says the super-rich live in the same country as the actual population, IMO, is not a careful observer.
Posted by katharina (Member # 827) on :
Whatever the differences, both contain Americans.
Posted by Bokonon (Member # 480) on :
One might say that therefore it's about time some of them started acting like it, and fulfill obligations that we, as a country on the whole, have agreed to make.
Posted by katharina (Member # 827) on :
One could say that. One could also say that they are paying what we have collectively decided is their obligation. One could also say that we should collectively decide that their obligation is more than we are currently saying that it is.
Which is very different from excommunicating them because they make a lot.
Posted by TomDavidson (Member # 124) on :
quote:Which is very different from excommunicating them because they make a lot.
Is "American" a religion, from which one might be cast?
The rich have been fighting and winning the class war for thirty years -- longer, even, but there was a lull for a while. I don't know that it's feasible to pretend otherwise. I mean, it would be nice if there weren't actually a class war going on, but I don't think we do anyone any favors by burying our heads in the sand and hoping that the rich will just go away and start behaving better. They've been playing to win, and at the same time manipulating the media to train us to think that playing the game is something that only horribly gauche people do; we've learned that lesson, to the extent that everyone talks as if a class war were some horrible thing that we want to avoid.
Except we haven't avoided it. We're losing it.
Posted by scholarette (Member # 11540) on :
I thought we gave the rich low taxes because they were creating jobs and buying stuff to help the economy. Turns out, they aren't really doing that, so they are failing in their obligations.
Posted by katharina (Member # 827) on :
They aren't creating jobs and buying stuff? Is that the contention? That jobs are not being created and that luxury goods are not being sold?
Or perhaps you mean that it isn't happening enough as might be wanted. Or perhaps there is another way of putting it where it is the fault of the people following the current law and not the fault of the elected decisionmakers who made the law.
The point is that if you want to change the obligations, then change them. You can pick the laws but not the consequences of them. If you don't like the present system, change the laws.
But as long as you're talking about collectively decided obligations and living up to them, then change those collectively decided obligations before chastising people for not living up to what you think, but have not put into law, their obligations should be.
[ April 14, 2011, 03:53 PM: Message edited by: katharina ]
Posted by Lyrhawn (Member # 7039) on :
You're saying you wouldn't agree that citizens have societal obligations that aren't specifically codified into law?
Posted by katharina (Member # 827) on :
Are you saying that you think if you are well off, you should pay more taxes than the law requires of you?
Posted by kmbboots (Member # 8576) on :
I would suggest that the wealthy have more power to change laws (and lawmakers) than the poor have.
Posted by katharina (Member # 827) on :
So you wish to get rid America of elected lawmakers and the rule of law?
Or perhaps you are saying that people with money should have a different set of laws to follow, and these are not set by elected lawmakers but instead...whom?
Posted by Lyrhawn (Member # 7039) on :
quote:Originally posted by katharina: Are you saying that you think if you are well off, you should pay more taxes than the law requires of you?
More than the law requires? No. I think the law should require more. I also think the whole "lower personal income taxes on job creators" thing is full of crap too. I'll cede your point specifically on taxes, but drawing a larger point from it, you seem to be suggesting that people must only do what the law tells them to do.
I would argue that we all have higher obligations to each other that aren't specifically passed as laws, but are often no less important.
Posted by Raymond Arnold (Member # 11712) on :
I'm not sure why "the rich must pay more than the law requires" is even a subject of discussion. We're saying we should change the law and raise their taxes. We're saying we should do that because the previous tax change (lowering their taxes with the intent to stimulate the economy) didn't have the desired effect.
Posted by katharina (Member # 827) on :
Then you aren't talking about government, or the government shutdown, or the budget, or anything else the thread has been about so far. Which I guess is your path to choose, although I'm not going down that particular one at the moment.
Posted by Lyrhawn (Member # 7039) on :
quote:Originally posted by katharina: So you wish to get rid America of elected lawmakers and the rule of law?
Or perhaps you are saying that people with money should have a different set of laws to follow, and these are not set by elected lawmakers but instead...whom?
I think she's saying that that IS how things are, not how she would like them to be. Money buys access, and while the ra-ra America lovers might profess that America is an egalitarian society, when it comes to access and influence over our lawmakers, it most certainly is not. We all follow the same rules, but circumstances dictate who is best able to take advantage of those rules.
Posted by katharina (Member # 827) on :
quote:Originally posted by Raymond Arnold: I'm not sure why "the rich must pay more than the law requires" is even a subject of discussion. We're saying we should change the law and raise their taxes. We're saying we should do that because the previous tax change (lowering their taxes with the intent to stimulate the economy) didn't have the desired effect.
I'm saying the "collectively decided obligations" cuts both ways. We've collectively decided to give socialized medicine to old people, and we've collectively set the income tax rates and the accounting tricks to go with them. The two are becoming unreconciliable, so one of the two must change. But presently they are both collectively decided.
We can choose the laws but not their consequences. That means only that choosing the laws is more important than ever, not that people should divine what the law MEANT to do and are obligated to do that instead.
(On a micro level, it has stimulated some. My dad's business has added about 25 employees this year, which wouldn't have happened if taking on the new business hadn't been worth it. 25 blue collar jobs with health benefits is not a minor thing, and I suspect it is not an isolated incident.)
Posted by Lyrhawn (Member # 7039) on :
Oh? Your dad paid for 25 blue collar jobs and their health benefits out of his own pocket?
Deep pockets.
Posted by kmbboots (Member # 8576) on :
In general people don't hire more people because they have extra money to burn; they hire people because they need them to meet demand. Lots of people with some money to spend creates more demand than a very few people with more money than they can reasonably spend in a lifetime.
Posted by katharina (Member # 827) on :
quote:Originally posted by Lyrhawn: Oh? Your dad paid for 25 blue collar jobs and their health benefits out of his own pocket?
Deep pockets.
My dad owns a business with my uncle. Their income is the profit from the business, after paying taxes, facilities, all the other stuff, andm most of all, labor with benefits.
So, yeah, out of their pockets. Now, the pockets wouldn't have had as much without the people working to produce the services the business sold, but if all the extra profit was taxed away, then they wouldn't have bothered to take on the extra business that required the 25 new employees. And the employees get paid whether the business they took on ultimately is profitable or not.
That's how it works. Unless you think people should work without getting paid. Taking on business, hiring people, setting up the work, and tracking both the jobs and the employees is my dad's job, and he gets paid if the whole shebang costs less to run than he is getting from the customer. That's how job creation works - if you tax everything over a certain amount away, or so much that it is effectively not worth taking on the new business, then those 25 new jobs don't get created.
Posted by TomDavidson (Member # 124) on :
quote:Then you aren't talking about government, or the government shutdown, or the budget, or anything else the thread has been about so far.
Who were you replying to, Kat? Because the post that immediately preceded this observed that we were in fact arguing for higher taxes on the rich, which would seem to speak directly to government, one of the underlying causes of the threatened shutdown, and the budget.
Posted by katharina (Member # 827) on :
Lyrhawn. RA and I were writing at the same time, which you can see from the time signatures.
Posted by TomDavidson (Member # 124) on :
quote: if all the extra profit was taxed away, then they wouldn't have bothered to take on the extra business that required the 25 new employees
That's not how tax brackets work. I'm aware that there's a point of diminishing returns, but even ignoring the possibility of tax breaks and shelters (which every single business owner I know uses liberally), they're still not looking at paying more than 35 cents on every dollar of profit.
I understand that at some point you're not making enough to justify the effort. Every small business hits that point, after all, where it's forced to decide whether it's really worth the risk and effort to try for further growth. But would you really refuse to bend down and pick up a dollar if it meant you had to give someone else 35 cents of it?
Let's run with that analogy. Sure, it's possible to make things onerous. You can make it hard to expand or maintain through regulation and the like; this is like making the dollar really, really, heavy. You can take more and more of that dollar away. You can make it riskier to bend down. At some point, yeah, any rational person is going to decide that the combination of risk, cost, and effort isn't worth what they'd get from that dollar. John Lennon famously complained in song about getting to keep just one out of every twenty shillings (which wasn't exactly accurate, since he wasn't actually paying 95% of his entire income in taxes, but was indeed paying 95% of the bulk of his income in taxes); I certainly agree with him that a 95% tax rate is excessively discouraging to the entreprenurial spirit.
But right now, American rich are making more money than they have made in living history, at a time when most other Americans are making less -- and continue to make less and less. For them to complain that it's too hard for them to bend down and pick up that dollar now, in an era that has made picking up that dollar easier and more rewarding than any other time in the last eighty years, seems remarkably callow.
Posted by katharina (Member # 827) on :
When people talk about blithely taxing 90% of the income over a certain level, that means they either are not aware or are choosing to ignore that the income to tax will dissapear, because it wouldn't be worth the effort to make it.
Anyone who says that job creation isn't chilled by higher tax rates doesn't know, historically or economically, what they are talking about.
I'm more impressed by a knowledge of economics and the demonstrated effects of proposed laws than I am by namecalling.
Posted by Lyrhawn (Member # 7039) on :
quote:Originally posted by katharina:
quote:Originally posted by Lyrhawn: Oh? Your dad paid for 25 blue collar jobs and their health benefits out of his own pocket?
Deep pockets.
My dad owns a business with my uncle. Their income is the profit from the business, after paying taxes, facilities, all the other stuff, andm most of all, labor with benefits.
So, yeah, out of their pockets. Now, the pockets wouldn't have had as much without the people working to produce the services the business sold, but if all the extra profit was taxed away, then they wouldn't have bothered to take on the extra business that required the 25 new employees. And the employees get paid whether the business they took on ultimately is profitable or not.
That's how it works. Unless you think people should work without getting paid. Taking on business, hiring people, setting up the work, and tracking both the jobs and the employees is my dad's job, and he gets paid if the whole shebang costs less to run than he is getting from the customer. That's how job creation works - if you tax everything over a certain amount away, or so much that it is effectively not worth taking on the new business, then those 25 new jobs don't get created.
You're missing something here. Ultimately, the owner of a business makes a judgment as to what his salary should be versus what money the company makes that should be re-invested in the company. It's different, of course, when there isn't just one or two owners, then a group decides what each individual gets. I think my argument works better in that case, but it works here as well.
If your dad used company money to hire new employees, then his decision wasn't in the slightest bit influenced by personal income taxes. That money would be affected by business tax laws, not personal income laws. And the rest goes to your dad as income, which is taxed differently. I'm all for making business taxes more fair and conducive to job creation, but I still fail to see how, with perhaps the exception of very, very small mom and pop outfits (where the levels of income we're talking about really don't apply anyway), personal income taxes are as much of a factor as many argue they are.
Posted by TomDavidson (Member # 124) on :
quote:When people talk about blithely taxing 90% of the income over a certain level, that means they either are not aware or are choosing to ignore that the income to tax will dissapear, because it wouldn't be worth the effort to make it.
Well, I don't know. It's not like John Lennon actually stopped making his millions. At a certain income level, after all, the actual financial rewards ceases to be anything more than a number. You could probably chart actual labor against the perceived value of a dollar, if you could figure out what metrics to use.
My gut feeling is that a 90% tax rate imposed on a very high income level would not in fact prevent those people from further investment, but it would encourage illegal and unethical behavior. I think a decent level would be closer to 50-60% on the highest brackets -- which I'd set higher than $250,000 -- but believe a level that eliminates all sensible objections while still being sustainable would be, as I've said, around 45%.
Posted by katharina (Member # 827) on :
quote:If your dad used company money to hire new employees, then his decision wasn't in the slightest bit influenced by personal income taxes.
The business is set up as an S-corp (I think), which (I think) means that the business profit is personal income and is taxed by the personal income rates and not corporate income rates.
It isn't an option for a lot of businesses, but it was created for situations like their business, which is 100% owned by only two people. There is no difference between company profit and their personal income.
quote:My gut feeling is that a 90% tax rate imposed on a very high income level would not in fact prevent those people from further investment, but it would encourage illegal and unethical behavior.
You are welcome to your gut feelings. However, there is no reason for anyone else to take them seriously.
Posted by TomDavidson (Member # 124) on :
quote:However, there is no reason for anyone else to take them seriously.
This is entirely true. Nor would I be particularly interested in quoting statistics to defend a 90% tax rate, because I'm not advocating or recommending a 90% tax rate. You're welcome to rail at that straw man, though, if it's offensive to you for some reason; I don't think anyone here will object.
Posted by katharina (Member # 827) on :
You can go back to declaring that people who make over an arbitrary number are no longer Americans, I suppose. That was as persuasive as your gut feelings.
Posted by TomDavidson (Member # 124) on :
I maintain that the rich certainly do not live in the same America as, say, the poor. The countries occupied by each would be unrecognizable to the other. The leadership, the boundaries, the citizenship, and the facilities provided by the "American" state to each of those groups are fundamentally different on a level that is frankly irreconcilable.
If one must discuss, as politicans certainly appear to require, "real" Americans, it is unquestionably salient to note that the life and experiences of the richest 10% of the population diverge from the "mainstream" far more than, say, the life and experiences of the poorest 10%; there is more commonality to be found among dockworkers and the homeless than among dockworkers and the CEO who unknowingly employs them.
We have, for as long as I have been alive, labored mightily to improve the lot of that richest 10% at the expense of the middle 80% (many of whom have fought mightily to preserve the lot of the poorest 10%, who have not suffered as horribly as other groups). If we're talking -- as many on the Right are -- about cutting taxes to benefit those "real," hardworking Americans, it is IMO incredibly relevant to observe that the rich are as removed from the American experience as, well, Martians might be.
(As a side note, I haven't actually stated the "arbitrary" number that represents the amount of annual income it would take to elevate someone sufficiently beyond normal Americans that they might be considered citizens of a different state. Part of this is because I think income is at best a contributing symptom of this phenomenon, which is best predicted by accumulated wealth and family privilege.)
Posted by katharina (Member # 827) on :
They are all Americans. Except for those that are Rupert Murdoch or...some other rich ex-pat living in the U.S., they are all Americans.
I object, fundamentally, to any delcarations that someone is no longer an American based on anything other than a personal renunciation of citizenship. Being wealthy doesn't make someone not an American. Comitting a crime doesn't make someone not American. Burning the flag doesn't make someone not American. Being a jerk, refusing to work, holding weird beliefs, dodging taxes, or driving drunk - none of these things are good, and none of them strip someone of their Americanness.
Colluding with an enemy state to attack America - fitting the constitutionally defined definition of treason - is the closest I can think of to warranting stripping someone of their citizenship, but, no, not even then.
Not legally. Not rhetorically. Declaring some people to no longer be Americans because you don't like them or what they have is both nonsensical and...a bit mystifying. Because if they aren't Americans, then they shouldn't have to pay for the retirements and health care for those who are.
Posted by TomDavidson (Member # 124) on :
quote:I object, fundamentally, to any delcarations that someone is no longer an American based on anything other than a personal renunciation of citizenship.
In making any such declaration, I'm responding myself to prior claims of "realness." I'm sorry if I didn't make that clearer. If that is indeed your only objection, you can rest assured that I agree with you on all particulars. Posted by katharina (Member # 827) on :
quote:Part of this is because I think income is at best a contributing symptom of this phenomenon, which is best predicted by accumulated wealth and family privilege
Nope. Only a small fraction of the wealthy in America have inherited their wealth. The vast majority are entrepenuers. People who come from money tend to...live like they have money, which means they might have high incomes, but they also spend it. The truly wealthy tend to make it themselves and then not spend it.
For more information, I suggest The Millionaire Next Door. It's fascinating. It made me swear never to buy a car that was new from the factory.
Posted by fugu13 (Member # 2859) on :
Interestingly, while the percentage of income received by the wealthy has increased recently, the percentage of wealth held by the wealthy has basically held constant.
Posted by Destineer (Member # 821) on :
quote:It made me swear never to buy a car that was new from the factory.
Huh, why is that?
Posted by Samprimary (Member # 8561) on :
waste of money. it's absurd how much value a car loses just for being driven off the lot.
Posted by Destineer (Member # 821) on :
Oh, I thought there was something else she was getting at.
Posted by katharina (Member # 827) on :
quote:Only a small fraction of the wealthy in America have inherited their wealth. The vast majority are entrepenuers.
I'm not actually defining "wealthy" as "having a million dollars in assets," believe it or not. That'd include a surprising number of farmers and small businesspeople living hand to mouth.
quote:The truly wealthy tend to make it themselves and then not spend it.
Depending on how you define "truly wealthy," this is not true. Certainly the majority of people who are "truly" wealthy entered adulthood with at least a million dollars in assets -- which, while I hesitate to call that "truly" wealthy, is certainly enough to tip the scales. After all, everyone universally agrees that the first million is the hardest; it's far easier to focus on income accumulation once you've got enough seed capital to feed, house, and clothe a family for the rest of their lives.
Posted by TomDavidson (Member # 124) on :
Has all that been fact checked? That's terrifying and rage-inducing.
Posted by AvidReader (Member # 6007) on :
I'm curious to see how many of the folks making under $15k are adults working full time. Because the only time I made that little was while I was waitressing and going to school. Even as a bank teller when they didn't pay me much, they paid me $18k.
Posted by Scott R (Member # 567) on :
I'm hesitant about the numbers expressed here; the article doesn't hide its bias and some of its conclusions aren't well supported (ex: the bit on Pfizer).
Posted by katharina (Member # 827) on :
The numbers there don't match the numbers I've seen anywhere else.
Do you have a different source? Maybe one from a more reliable outfit.
If you all read are slanted articles meant to induce rage, no wonder you don't have a full picture of who gets caught in the "wealthy."
When you rage against the rich but, of course, aren't talking about the "nice" rich who own businesses, it makes me think you don't know who the rich actually are. "Growing Up Gotti" is not a good representative.
quote:Certainly the majority of people who are "truly" wealthy entered adulthood with at least a million dollars in assets -- which, while I hesitate to call that "truly" wealthy, is certainly enough to tip the scales.
This is flat out not true. It simply isn't. Unless you wiggle the definition of truly wealthy to be tautological ("the truly wealthy are those who enter adulthood with over a million in assets"), which is absurd, your statement is flat out wrong. Those aren't the facts.
When you talk about taking the assets or taxing the wealthy to the utmost, there is no loophole for "unless you made it yourself".
If you want to target inherited wealth, campaign for the estate tax to be revved up. But while people do talk about that, no one even pretends it would solve the problem, because there simply isn't enough inherited wealth to tax.
quote:After all, everyone universally agrees that the first million is the hardest; it's far easier to focus on income accumulation once you've got enough seed capital to feed, house, and clothe a family for the rest of their lives
Honestly, you don't know what you are talking about. If you're willing to work and have decent skills, you don't need a million dollars to take care of a family. And if you're spending it on house and food and clothes, then it isn't seed capital.
Depending on what business you're in, it might take that entire first million and then ten years of risk and sweat to make the second and third. You could turn over the business to someone else to run, but that has horrible risks all on its own. It's certainly to be in the position of owning a profitable than not, if business-owning-and-running is your job, but it doesn't magically get easy or less risky once you pass a certain amount.
The amount needed to make sure your family isn't going to starve under most reasonable scenarios is far, far less than one million. (Get good insurance and a year's worth of emergency savings in cash, and then save 15% your whole life for retirement. You'll be fine.)
[ April 15, 2011, 09:34 AM: Message edited by: katharina ]
Posted by The White Whale (Member # 6594) on :
kat, where did you see your numbers? That would be very helpful.
Posted by katharina (Member # 827) on :
Try Megan McArdle at The Atlantic. And the Milllionaire Next Door. And...basically, the Wall Street Journal.
I read financial blogs as a hobby pretty much daily, and it's not all in one place. (This is a side effect of 1) where I work, and 2) being my father's daughter - we chat about money a lot.)
Posted by Swampjedi (Member # 7374) on :
quote:Originally posted by katharina: When you rage against the rich but, of course, aren't talking about the "nice" rich who own businesses, it makes me think you don't know who the rich actually are. "Growing Up Gotti" is not a good representative.
I keep hearing that small business owners file as individuals. Is this because something is broken in our tax code? Ok, stop laughing. Of course the code is broken. I'm just confused as to why it has to be done this way. It seems that it makes small business owners more vulernable to tax increases on the "rich".
Posted by katharina (Member # 827) on :
It's because of the legal entity known as a S Corporation.
The author is considered one of the best tax reporters alive today, and is citing publicly-available figures. I'm not sure what constitutes "more reliable" in this scenario. Certainly I wouldn't trust the Wall Street Journal on this topic. The Millionaire Next Door isn't a bad source, but it's talking about a population of "rich" that is frankly antiquated. By modern standards, a million dollars in assets is barely bourgeois.
quote:en you rage against the rich but, of course, aren't talking about the "nice" rich who own businesses...
Owning a business doesn't make someone "nice." Nor is it a matter of "nice" versus "evil." The issue is one of accumulated wealth and sources of income. Someone whose assets are tied up in the operation of a business, but who has very little disposable income otherwise, is of course going to be more more vulnerable to changes in the tax code; I would prefer to protect these individuals while increasing taxes on individuals whose incomes are more resilient.
quote:When you talk about taking the assets or taxing the wealthy to the utmost...
Again, I've proposed a 45% maximum marginal tax rate. I'm not sure whom you're talking to, but I don't think anyone here has talked about taxing the wealthy to the utmost.
quote:Honestly, you don't know what you are talking about. If you're willing to work and have decent skills, you don't need a million dollars to take care of a family.
Nor did I say you did. What I said was that entering adulthood with a million dollars was enough to pay for your family's needs for your entire life. In other words, with a million dollars in the bank, you can be reasonably sure that your family of four will never be dependent on your monthly income. This is not a trivial thing. It is a safety net that encourages entreprenurial risk-taking, professional development, and investment among those who have nothing to fear from failure. As I said in the same paragraph, there is a reason that people say the first million is the hardest, and that people starting businesses are obsessed with seed capital.
Posted by katharina (Member # 827) on :
You keep talking about the people who enter adulthood already with money.
But when you talk about raising taxes, you mean everyone who makes over a certain amount.
The two populations are not identical. The first is negligable.
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If you are counting on the million dollars in the bank to take care of your family, then it isn't seed capital. The entire point of using capital to building a business is that it isn't liquid - you can't chip off a corner of a machine in your factory to pay the mortgage, and if you do, if you cannibalize your business, you'll quickly kill it.
Confusing your seed capital with your emergency savings or your income to live off of is a good way to become an ex-business owner.
Posted by TomDavidson (Member # 124) on :
The two populations are indeed not identical. I wish there were a way to effectively tax wealth, but there isn't; in the absence of a method to do so, we're stuck with sales tax -- which becomes very problematic when dealing with corporations -- and income tax. Any income tax is always going to be an imperfect measure, too, since (as the article I linked noted) it's perfectly possible for people with sufficient assets to live on loans and leases and technically claim no income. I've seen some proposals out there, like a sales tax on stock transactions, that have intrigued me but also seem problematic enough that I can't endorse them.
At the end of the day, though, our debt problems started when we decided to radically slash the marginal tax rate for people who weren't exactly suffering from tax hardship. Given the way the demographics fall, I'm fairly comfortable with the idea of creating a new tax bracket at $400,000-$450,000; we're talking about a level of personal income at which taxes are merely mild disincentive rather than genuinely problematic.
There is a religion running wild that would have people believe that businesspeople in the '50s somehow didn't feel like working because they were too heavily taxed; this is self-evidently false. What we have seen is that lower taxes do not actually encourage the level of community investment that would pay for those cuts. Barring the moral argument that for many people lies at the core of their desire for tax cuts -- the belief, arguably mistaken, that income is earned and deserved and indicative of merit -- there doesn't appear to be a financial one that would justify continuing to treat the rich with kid gloves.
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quote:Confusing your seed capital with your emergency savings or your income to live off of is a good way to become an ex-business owner.
Granted. But here's the thing: with that million in the bank, you can intern for six years without worry. You can go out and take out some loans. You can get yourself an MBA, and almost certainly know some people already. That first million, even if you don't use it to start your business, guarantees that you can take pretty much any risk you want without worrying that you'll have to turn your kids out into the cold. Being an entrepreneur when you've got a safety net that will last your entire lifetime is a far, far different thing than being one when you've got $6,000 in the bank and a mortgage payment due.
Posted by Mucus (Member # 9735) on :
quote:Originally posted by TomDavidson: ... Given the way the demographics fall, I'm fairly comfortable with the idea of creating a new tax bracket at $400,000-$450,000 ...
It wouldn't even necessarily be "new"
quote:Over the years, changing the amount of taxes people pay was accomplished not just by changing rates but by changing the income limits of the tax brackets. Just looking at the top rates does not give the whole picture about who is paying taxes. Before the 1986 tax reform, the income tax had 15 brackets. In the 1930s, there were more than 50. The Wealth Tax Act of 1935, applied the top rate to income over $5 million and had only a single taxpayer: John D. Rockefeller, Jr.
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