patrick.net

RayAmerica says

The reason a plan like that will never get implemented

Okay, so we've seen your silly, never could be implemented, "if I were king" plan. Now how about the one that could be implemented. Seems to me if Obama is just another political hack, you could give us examples of things that you would actually get through congress and that could have been implemented.

You know, for that resounding success.

marcus says

Okay, so we’ve seen your silly, never could be implemented, “if I were king” plan.

"Silly?" I gave you my plan because you asked for it. What's your plan? Or are you just a sponge that takes in whatever Obama spills out on the floor?

Troy says

one thing the Republicans are really good at is shitty handoffs

Maybe that's because they understand very well...

"Democracy is the process by which people choose the man who'll get the blame."

Bertrand Russell

RayAmerica says

“Silly?” I gave you my plan because you asked for it. What’s your plan? Or are you just a sponge that takes in whatever Obama spills out on the floor?

Interesting.

marcus says

RayAmerica says

“Silly?” I gave you my plan because you asked for it. What’s your plan? Or are you just a sponge that takes in whatever Obama spills out on the floor?

Interesting.

You see, marcus - rayray's plan isn't silly merely because he shared it with you. Other descriptions might apply, such as: failure, ill-informed, unintelligent, asinine, unattainable... but certainly not silly.

It just seems to me, that if you can ask us for Obama's resounding successes, with the obvious belief that there are none, and if the implication is that he is a terrible president, it shouldn't be that impossible for you to come up with an example of a real plan ( not one that even you say "never could be implemented") that would have been so much better.

I'm not surprised though.

Quote from a serious minded individual that isn't a brain dead, biased Obamabot:

Troy says

Ray, that was perfectly reasonable.
There are problems involved with its implementation, since just dumping millions of people out of work is going to utterly eviscerate the current configuration of our fake economy, and destroying the existing banking sector will cause significant operational and efficiency losses as what remains of our functioning economy disappears into a cross-default deflationary spiral.
I think as rational public policy the 1993-2000 era had things generally right . . . hold spending on the stupid stuff constant and let the economy grow around it. Clinton didn’t cut the defense budget but the economy grew/inflated, making our relative defense burden much less in 2000 than 1993.
I would like to live in your world, but I would not want to live in the transition you want us to pass through to get there.

And now from an Obamabot:

elliemae says

You see, marcus - rayray’s plan isn’t silly merely because he shared it with you. Other descriptions might apply, such as: failure, ill-informed, unintelligent, asinine, unattainable… but certainly not silly.

Little ellie "I never, ever insult anyone" mae just isn't able (in case you haven't noticed) to intelligently discuss anything without her little snide, personal insults. Oh well. And here I thought that "medical procedure" actually worked. Back to the drawing board Dr. Frankenstein!

Am I incorrect but...back before Reagan, taxes in the highest brackets were 90%+

Also, there were MORE tax brackets.

Now they just lump everyone/every family making over 370k in the highest bracket. I think there's a pretty big difference between a family making 370k vs one making 3.7 MILLION.

Why don't they create more tax brackets? Seems like everyone who supports Obama supports taxing the "rich" more and more, why not tax the WEALTHY, not just the rich with high income?

CaffeineAddict says

Am I incorrect but…back before Reagan, taxes in the highest brackets were 90%+

There was a 94% bracket in 1944-45 and 91% in 1951-1963. The deduction rules were pretty liberal and the actual taxes paid were almost always less than 50% (frequently a lot less) on the top tiers of income. The top 91% bracket of the 50/60's applied to income over 3.75 million in 2008 dollars. By the time Reagan took office the top tax rate was down to 70%, again on very high levels of income with very generous deduction rules. Reagan's tax cuts in 81 and in 86 reduced the top rate to 28% and raised the bottom rate to 15% while dramatically cutting deductions (many of these "deductions" were pretty much a tax evasion schemes mostly in real estate, eliminating them brought on the 89 housing crash along with the savings and loan crises) and expanding the AMT to disallow a lot more types of deductions like out of pocket medical costs, state/local taxes, etc..

CaffeineAddict says

Am I incorrect but…back before Reagan, taxes in the highest brackets were 90%+
Also, there were MORE tax brackets.
Now they just lump everyone/every family making over 370k in the highest bracket. I think there’s a pretty big difference between a family making 370k vs one making 3.7 MILLION.
Why don’t they create more tax brackets? Seems like everyone who supports Obama supports taxing the “rich” more and more, why not tax the WEALTHY, not just the rich with high income?

This was the Reagan crew's great change, in 1986. I was just reading about it yesterday. Top rate went from 50% to 28%, bottom rate went from 11% to 14%, 15 brackets reduced to 4.

It is a good question why there are not more brackets. The easy answer is that the fix is in.

Troy says

Ray, that was perfectly reasonable.
There are problems involved with its implementation, since just dumping millions of people out of work is going to utterly eviscerate the current configuration of our fake economy, and destroying the existing banking sector will cause significant operational and efficiency losses as what remains of our functioning economy disappears into a cross-default deflationary spiral.
I think as rational public policy the 1993-2000 era had things generally right . . . hold spending on the stupid stuff constant and let the economy grow around it. Clinton didn’t cut the defense budget but the economy grew/inflated, making our relative defense burden much less in 2000 than 1993.
I would like to live in your world, but I would not want to live in the transition you want us to pass through to get there.

Clinton didn't cut the defense budget? Are you high?

1993 to 2000 had jack shit to do with economic policy. The cold war had just ended, china wasn't open yet, japan was in deep trouble, and the freaking internet was becoming available everywhere.

NO economic policy could repeat such conditions. It was a once in a century coming together of good things. The economic policies of today are virtually identical, once you ignore the military and the busted tax base.

China and the lack of an industry to mimic that of the internet means we won't see the 90s again in our lifetime.

Troy says

Ray, that was perfectly reasonable.
There are problems involved with its implementation, since just dumping millions of people out of work is going to utterly eviscerate the current configuration of our fake economy, and destroying the existing banking sector will cause significant operational and efficiency losses as what remains of our functioning economy disappears into a cross-default deflationary spiral.
I think as rational public policy the 1993-2000 era had things generally right . . . hold spending on the stupid stuff constant and let the economy grow around it. Clinton didn’t cut the defense budget but the economy grew/inflated, making our relative defense burden much less in 2000 than 1993.
I would like to live in your world, but I would not want to live in the transition you want us to pass through to get there.

bob2356 says

CaffeineAddict says

Am I incorrect but…back before Reagan, taxes in the highest brackets were 90%+

There was a 94% bracket in 1944-45 and 91% in 1951-1963. The deduction rules were pretty liberal and the actual taxes paid were almost always less than 50% (frequently a lot less) on the top tiers of income. The top 91% bracket of the 50/60’s applied to income over 3.75 million in 2008 dollars. By the time Reagan took office the top tax rate was down to 70%, again on very high levels of income with very generous deduction rules. Reagan’s tax cuts in 81 and in 86 reduced the top rate to 28% and raised the bottom rate to 15% while dramatically cutting deductions (many of these “deductions” were pretty much a tax evasion schemes mostly in real estate, eliminating them brought on the 89 housing crash along with the savings and loan crises) and expanding the AMT to disallow a lot more types of deductions like out of pocket medical costs, state/local taxes, etc..

Those 90 percent rates also only really applied to idle wealth. You could deduct more or less all spending and investing.

Reagan had the objective of remaining revenue neutral with his bracket rework. Mostly they shifted the tax burden from idle wealth and onto the people who actually needed the money.

Why is the current tax system punishing those with high-income then?

I'm sort of divided on whether to have a progressive tax system at all vs a flat tax, but if there WAS a progressive tax system, shouldn't it be taxing WEALTH rather than INCOME?

I know I personally will be less inclined to work more hours for "more" pay if I only see 30 cents of that last dollar I earn (after federal, state, city taxes...). I'd rather work less even if my total income is less.

Taxing income seems to punish work...

CaffeineAddict says

Why is the current tax system punishing those with high-income then?
I’m sort of divided on whether to have a progressive tax system at all vs a flat tax, but if there WAS a progressive tax system, shouldn’t it be taxing WEALTH rather than INCOME?
I know I personally will be less inclined to work more hours for “more” pay if I only see 30 cents of that last dollar I earn (after federal, state, city taxes…). I’d rather work less even if my total income is less.
Taxing income seems to punish work…

A 35% rate before any deductions on income above $373,000 is far from punitive. If you don't like your state taxes then move. Even better work overseas someplace that has no income tax at all. Oops, that won't work, American and North Korea are the only countries on earth that tax worldwide income.

If you are in the top tax bracket (even today's relatively low top tax with it's historically low tax rate) it is very, very doubtful you are working by the hour (unless you are a lawyer). No one is seriously talking about a 70% top tax rate anyway. Where did you get that idea from? Since Fica stops at 100,000 and the highest state tax rate is Oregon at 10% exactly how would you even achieve a 70% rate AFTER deductions anyway? You must live somewhere with one hell of a high city tax. No one has ever paid even close to that. Even the much vaunted 90% rate rarely resulted in actual taxes paid above 50% and that was on income over 3.7 million.

Kevin says

The cold war had just ended, china wasn’t open yet

The trade deficit with China actually started getting rolling ca. 1995.

1993 $22B
1995 $33B
1997 $50B
1999 $70B
2001 $83B
2003 $124B
2005 $200B

I think this trade deficit was certainly a hidden stimulus of the Clinton-Bush economy. It came with the rise of the big-box retailer -- thanks to imports a lot of things got cheaper to procure in the 90s and retail got more efficient too. This was a significant boost to the overall economy, counterbalanced by the outsourcing involved started shutting down what consumer manufacturing we still had. The import boom benefitted everyone, while the offshoring of labor liquidated a much smaller population (the needs of the many outweigh the needs of a few).

Also, I think one dynamic that is missing in the economic analysis of the 70s through 90s is the baby boom passing through.

In 1975 the peak BB cohort was 20. In 2000 it was 45. I was in Fresno for part of that time and the city expanded right along with this boom, and I think there was some causation here, not just correlation.

Troy says

I think this trade deficit was certainly a hidden stimulus of the Clinton-Bush economy

Two sides to it. Loss of income due to outsourcing, effecting some, but stimulative benefit of nearly slave labor making many consumer goods. I think it is especially noticeable in clothing and electronics.

Troy says

the city expanded right along with this boom, and I think there was some causation here, not just correlation

I agree, and I think the stock market was effected too, with all of the 401K and other money from boomers entering their peak earning years.

CaffeineAddict says

I know I personally will be less inclined to work more hours for “more” pay if I only see 30 cents of that last dollar I earn (after federal, state, city taxes…). I’d rather work less even if my total income is less.

Except high income workers don't usually work by the hour. There are exceptions, such as doctors. But even there, there is a reason for calling it a "practice." If you are in a high income job that requires a lot of hours, decreasing your hours may mean that you are failing. That is, working less is often not an option.

I know I personally will be less inclined to work more hours for “more” pay if I only see 30 cents of that last dollar

Great, with 20% unemployment that will mean more work for somebody else who needs it.

Raising taxes is the answer to unemployment . . . who knew??

CaffeineAddict says

How do you “pay yourself in capital gains and dividends?”

Doctors do this by funneling their wage income through shell S-Corps. It was one of the tax reforms that got lost in the big battle earlier this year, thanks to Senator Snowe refusing to vote against the Republican filibuster with this tax change (on shell corporations) in it.

The IRS is of course on to this tax evasion but people with S-Corps and C-Corps have a wide latitude to determine what is their wages and what stays in their company. As long as they pay themselves a fair wage from the corporation everything else can be left in the corporation, for withdrawal at dividend tax rates at their leisure.

Troy says

CaffeineAddict says

How do you “pay yourself in capital gains and dividends?”

Doctors do this by funneling their wage income through shell S-Corps. It was one of the tax reforms that got lost in the big battle earlier this year, thanks to Senator Snowe refusing to vote against the Republican filibuster with this tax change (on shell corporations) in it.
The IRS is of course on to this tax evasion but people with S-Corps and C-Corps have a wide latitude to determine what is their wages and what stays in their company. As long as they pay themselves a fair wage from the corporation everything else can be left in the corporation, for withdrawal at dividend tax rates at their leisure.

Were doctors well known to do this, because a number of posts specifically mentioned that profession?

Anyway I personally know of any practice that did this (limited n of course) and in fact knew 1 physician who said his group was told about some sort of loophole (which I'm guessing was this) that their accountant tried to convince them to set up, but they didn't.

The S-Corp thing wasn't that big a deal -- just requiring more payroll tax payments from small professional S-Corps -- but it rankled enough people to get pulled from HR 4213, the erstwhile bolus of tax benefits and changes that has been broken up and passed mostly individually now.

"Specifically, the provision targets S corporations engaged in a “professional service business,” which it defines as “any trade or business if substantially all of the activities of such trade or business involve providing services in the fields of health, law, lobbying, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, investment advice or management, or brokerage services.”

“There is the potential for taking out smaller salaries subject to payroll tax, and taking out the rest as distributions,” noted Rick Thompson, a tax partner at Sikich LLP.

“Years ago, some S corporation shareholders were being really abusive by not taking any salary and claiming everything as a distributions,” he added. “If the IRS saw no officer compensation on a return but saw distributions, it would send a notice telling the shareholder to pay the payroll tax. The fact that the new provision targets smaller S corporations indicates that the perceived abuse is primarily at lower levels. It’s unusual to see people playing around with salaries at higher levels.”

http://www.webcpa.com/news/Tax-Extenders-Bill-Provokes-Controversy-54402-1.html

Most doctors go to c corp and s corp to limit liability not for tax reasons. The s corp doesn't get double taxed so most prefer that structure.

The IRS ALWAYS has the option of disallowing any practice it considers abusive. You have to go to court and prove it's not.

Simplification of the system would be nice but wouldn't last anyway. Simplification of taxes was a big, big part of the Reagan 1986 tax bill. Reagan really did an amazing job cutting down the tax code considering how virtually everybody at the time had tax breaks in the old tax code. The amount of opposition and lobbying were intense, but he pushed it through anyway.

Unfortunately after 25 years the tax code is more complicated than it ever was completely negating Reagan's efforts. The big problem is if there is even one special tax break in the tax code everyone else demands one too and they multiply like rabbits.

I am currently living in NZ where there are 4 tax brackets and no deductions. FYI the top rate of 38% starts at 70,000 nz. The entire tax return is a couple of pages and you only file if you have a business of some kind. If you just have salary then you don't file a tax return return at all. However it costs me $1500 every year to have an accountant prepare my 20+ page US return. This is after I have gotten out of almost everything financial in the US except a couple rental properties and a very small stake in a family business amounting to a couple thousand a year. Pretty sad state of affairs.

And YES, this is the most fiscally irresponsible government in US history. We've incurred an additional 50% debt load in just the last 18 months, as we accumulated since the beginning of our country.

You can't solve a debt problem by incurring more debt - well DUH.

Marcus .... I hate to say it (not really, I actually enjoy it) but, I told you so. The guy is a complete fraud that was, a little over 5 years ago, a back bencher in the lowly Illinois State Senate. He's a creation by the ruling elitists that are pulling his strings to accomplish their big money agenda.

Troy .... I didn't intend to single out Obama as a tool of the elitists. McCain, both Bushes, Clinton, etc. were too (along with Al Gore, John Kerry, Bob Dole, etc.). JFK was probably the only President in my lifetime that was not controlled by the elite. Example: in late 1963 he actually had the Treasury print Treasury Notes in order to circumvent the all powerful Federal Reserve (the ultimate elitists). Was this the primary reason for his murder? I don't know, but it sure looks like a motive to me. When it comes to presidential elections, in reality, we have two candidates running but the choice is pretty much the same. The rhetoric sounds drastically different, but governing on all the major issues (foreign policy, deficit spending, illegal immigration, etc.) they are pretty much the same. Without their support, a person couldn’t realistically run for president and have even a remote chance of winning. IMO, since LBJ, they have all fallen in line with the mega banksters' & Wall Street agenda.

Well, I didn't think the Michael "MooreFood" comment was productive at ALL. So, I guess he is guilty too. My read, however, is that he is NOT a FOX fan. He sounded closer to you than you may think. But....he can speak for himself.

I feel almost depressed when you say that writing your congressman is futile. I do this sometimes. Hoping against hope that the voices become loud enough that they listen...

People are catching on. Give the masses more credit. Keep it out there. The truth floats. Good ideas fly. What is the alternative? Accepting status quo?

If you haven't read the alterNet articles about our Kleptocracy that patrick shared today, you should.

A lot of nonpartisan truth there. Both articles (same link) excellent.

http://www.alternet.org/story/148038/are_we_a_kleptocracy_and_what_does_that_mean_anyway_?source=patrick.net

bob2356 says

Are you angling for the position of RayAmerica’s liberal alter ego?

Congratulations! You've just defined the little Duckie Dude's life purpose.

RayAmerica says

bob2356 says

Are you angling for the position of RayAmerica’s liberal alter ego?

Congratulations! You’ve just defined the little Duckie Dude’s life purpose.

Thanks. Sometimes I agree with some of your positions, but I don't agree with your methodology either. Why don't either of you just make an honest argument with real facts? It's not that hard.

Nomograph says

Paris Hilton is blonde, promiscuous, is a heavy drinker and drug user

Sounds like a member in good standing of the Democratic Party.

BUT! it’s hard to cite Irony for Obama’s fiscally reckless policies to date

What was fiscally reckless was this country borrowing $5T against the bubble values of their houses, and spending it on consumption. This money-debt was churned into cash and is now in stronger hands -- the 中国人民银行, OPEC, and all the other skimmers who got out when the getting was good 2004-2007.

This is fun to watch: 2 Liberals going at it in an all out brawl. It appears Kevin has the little Duckie Dude on the ropes, but the Duck is very effective at his "rope a dope" technique. Is Howard Cosell still alive? He should be here to call the action ... I can hear it now: "Look at these two monkeys going at it!"

sorry, even by that accounting you won't ever even get a 50 percent marginal rate. The 28 percent bracket is already beyond the ss cutoff.

But if all we care about is the gross injustice of marginal rates and want to pretend that marginal rates are what matters, why aren't you crying fowl about the fact that $5k in income is tax free but $5k in capital gains is taxed at 15 percent, and that's only at the federal level?

Let's have an honest discussion about taxes, like how the capital gains tax is lower than income priimarily to encourage business reinvestment rather than dividends, oe how big tech companies avoid paying any taxes on foreign income, or how our tax policies are actually regressive due to the flat fica rates. But please stop lying about people claiming that 50 percent of anyones income is going to the government.

RayAmerica says

This is fun to watch: 2 Liberals going at it in an all out brawl. It appears Kevin has the little Duckie Dude on the ropes, but the Duck is very effective at his “rope a dope” technique. Is Howard Cosell still alive? He should be here to call the action … I can hear it now: “Look at these two monkeys going at it!”

I just see two intelligent people on the interwebs having a discussion. But then again, I don't operate on the assumption that everything is a liberal/conservo issue.

You're mixing up your animals, rayray. Are they monkeys, or are they a duck and something else? Since my icon is a female dog, do you refer to me (privately) as a bitch? Oh- I forgot, you just skirt around this issue... So using your logic, you're a cross dresser.

yawn.

elliemae says

Are they monkeys, or are they a duck and something else?

If you knew anything about Howard Cosell, you would know he made a famous reference to a "monkey." Obviously (yawn ... again) you've missed the point. But thanks for trying to sound relevant.

I have to agree with the duck - the "hidden" FICA match is pure BS the way it is presented. If the person wasn't working, there would be no tax... What's next, they are going to tax the employee for the tax the company pays on the employee's behalf?

Depending on where you live, 50% is probably pretty accurate considering the total tax burden for "middle" income earners. FICA, the lovely state and federal income tax, property taxes, sales tax, gasoline tax, the "universal access charge" that they say isn't a tax but you have to pay, etc, etc...the list goes on forever and ever. Every time you turn around a government entity has their hand out. This IS, by the way, one thing I do agree with the Tea Party on...the average Joe already pays enough. No deductions and a flat tax is the way to go but it'll never happen as it will remove all of the social engineering capabilities of the government ... as well as ...how are they supposed to get their kickbacks if they can't massage the tax code for their buddies?

RayAmerica says

If you knew anything about Howard Cosell, you would know he made a famous reference to a “monkey.” Obviously (yawn … again) you’ve missed the point. But thanks for trying to sound relevant.

You're correct, rayray. Relevance is everything. For instance, revering a man who died in 1995 who described himself as "Arrogant, pompous, obnoxious, vain, cruel, verbose, a showoff," gives insight into your psyche, just like your adoration of Hitler.

FYI The racist "little monkey" comment of which you're so fond ended his career on Monday Night Football.

http://en.wikipedia.org/wiki/Howard_Cosell#.22Little_monkey.22_comment

elliemae says

revering a man

Actually, you didn't have to be an a**hole to enjoy listening to Howard Cosell. He was especially famous for his coverage of Mohamed Ali.