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Guest Post: Paul Ryan's Budget Arithmetic Makes No Sense
Submitted by Nomi Prins
Paul Ryan's Budget Arithmetic Makes no Sense
Leaving aside for the moment
the petty let's be children and see if we can grind the government to a
halt game going on amongst parties and sub-parties, and the fact that
both parties blessed every single debt cap increase placed before them
in equal measure over the past decade of Bush *2 + Obama * 1/2, I just want to focus on House Budget
Chairman, Paul Ryan's, corporate tax decrease proposal for a second -
because the math is so bizarre.
Looking at 2010 - the Federal government took in about $2.1 trillion worth of tax revenues, 8.9% of those
came from corporate taxes, or about $187 billion. That left individuals
footing 41.5% of the bill through individual income tax and another 40%
through social security and retirement taxes (get it - we do pay into
the system, $840 billion dollars in 2010 to be exact), with the
remainder of tax receipts coming from excise and 'other' sources. (The
percentage of federal tax revenues that corporations paid in 2009 was
6.6% - the lowest on record.)
The notion that slicing the corporate tax rate from 35% to 25% would spur large corporations to either:
a) fire their accounting staffs and do their returns on Turbo Tax
b) willfully bring all their relevant earnings onshore
c) engage in major hiring sprees or
d) pay rank-and-file workers proportionately more and CEOs proportionately less than in the past
is obviously ludicrous, though not to
Ryan or the GOP or apparently, the portion of the Dems that aren't
spitting at them with their calculators.
Besides that, it's not supported by
fact. To the contrary, since the 1930s, each year in which corporations
paid less than 10% of the overall federal tax receipts, coincided with
recession and unemployment spikes. The last time that the overall
percentage of corporate tax receipts was greater than that of individual
ones was in 1943. In other words, when things are shaky for the overall
economy, corporations bear a proportionately lower share of tax
revenues than individuals. This is not exclusively, but certainly
probably, due to their ability to move stuff around their books and hire
scores of CPA's to help.
During the 1920s, Treasury Secretary,
Andrew Mellon substantially hacked tax rates for companies and the
general public under the premise that a magical 20% tax rate would
discourage the rich and the corporate from seeking off-shore tax havens
and on-shore loopholes. Though Mellon did manage to balance the budget
after World War I, the tax practice led to an over-bloated and
over-leveraged financial economy during the 1920s followed by the Great
Depression. It didn't make charities out of companies. Even though it
was more progressive than what we have today.
Sure, the budget stands a bloated mess.
But the revenue side and mechanism is far more broken than the spending
side, which itself grew due to the cost of wars, weapons and financial
subsidies to the nation's richest people and corporations (especially
the Wall Street ones). Lowering the corporate tax rate would merely
reduce the share of corporate taxes getting to the federal till even
further.
Companies like GE may operate under a
35% tax rate in theory, but in practice that rate could be 50% or 0% and
the result would be the same, not only because of the complexity of the
loopholes in the corporate tax code, but also because there is no
wherewithal in the government, or the Treasury department to do anything
about it. Hell, the Treasury Department assisted GE Capital, GE's
financial, er - hedge fund - arm, when it needed a 'crisis' bailout. The
FDIC stepped in with a $140 billion guarantee for their debt in 2008
and 2009. Not only didn't GE pay any taxes during those years, but for
2010, the company managed to manufacture its largest tax refund - $4.1
billion.
How is lowering the corporate tax rate
going to change that exactly? Uh, it's not. What it would do, is create a
wider budget gap and send more politicians scratching their heads over
why. So, it's really just a super-bad and dumb idea.
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Paul Ryan voted for bailouts, TARP, Cash for Clunkers, and Patriot act. Another douchebag politician proclaiming to be the savior of the US economy. Fuck politics, all just a one big sideshow while the bankers rape us senseless.
As I said, he don't want to cut spending. He wants to cut taxes: his taxes and his buddy's taxes. That's the game. Besides, his mentor proved that deficits don't matter. Conscience clear.
Did he really?
Paul Ryan voted for TARP?
For Cash for Clunkers?
He voted for the unpatriotic 'Patriot' act?
Folks if this is true then why do anything but shun him.
Surely America deserves better that some one who supported TARP.
I really hope Nomi already cashed Axelrod's check.
This article stinks on ice.
Nomi? What about TD's check? Articles like this really make you wonder if ZH is just some kind of high level Cloward Piven PsyOps. Well gotta pay for that Bloomberg somehow!
I'm really trying to hope it was put up here to receive the ridicule it deserves.
Pure paritsan propaganda.
Complete with sycophantic trolls. Does seem kind of staged.
The only thing missing is the "concerned conservative" who thinks she has a point, to really round things out.
Hehe. You don't really think Ryan and co. want budget cuts now do you?
It's a bargaining chip to keep the Bush tax cuts going and to bargain for some more (especially "supply-side" tax cuts).
Besides, didn't somebody prove that deficits don't matter?
Conservatives always want lower taxes, they just don't want to make the cuts needed to pay for them (chicken hawks).
Only conservatives could come up with "voodoo economics" - it takes the same degree of intelligence as thinking humans have only been on earth for 6,000 years.
"a new version of ponzi-nomics"? okay. here's another news flash: "they've never given a phuck about your money." You on the other hand--u makin me hungry... fo chicken mo fo.
Conservatives always want lower taxes, they just don't want to make the cuts needed to pay for them (chicken hawks).
TRUE conservatives DO WANT CUTS! The RINO's in Congress when Bush was in office were drunk on their own shit, and I'll still never forgive Bush for bribing seniors with his prescription drug benefit, in order to ensure reelection. Nothing conservative about that boondoggle.
TaxE, all of your comments are very true.
It was stated above. Taxes are collected by corporations. On behalf of individuals. Federal corporate tax rates should be cut.
First off, your blaming Mellon for cutting taxes as the reason the stockmarket crashed ignores the role of the very gay tag team of Strong and Norman of the US and England respective Central Banks who were playing the game of inflating the dollar in order to create the illusion of a stable fiat Pound which was trying to return to a (phony) gold standard in order to reclaim its dominance of the Continent. It was the flood of money that led to the crash as it was not sustained by Strong's replacement, Harrison when Strong died in 1928. By 1930/31 everyone was bailing out of the Pound/Phony Gold Standard driving trade down as Hoover declared depressions outlawed and started the money pump (like TARP) which was then picked up by FDR and his New Deal fed by the new Fed Chair, the very gay Merriner Eccles, who helped rain money until he raised the discount rate on that era's 2B2Fails in 1937, all the while maintaining that era's equivilant of Baranke's Quantitative Easing I, II, (III, IV, V?): which after 8 years had not created even one new private sector job according to FDR's Treasury Secretary Henry Morganthau (not gay). It was WWII that saved the administration and probably averted a counter-revolution in the United States, WWII being an arguably strategically planned affair (but we won't go into that right now as it takes too long, but whose strategy America is mimicing today).
And before you go off on Ryan's tax income end of his proposal (and that is all it is at this point and a commendable effort to ignite a real discussion on USA spending), its a well known fact that once tax rates get to 20%, people will work hard to figure out how to avoid paying taxes. At 25% he's giving himself a cushion I think and he himself has said he's open to negotitation but as of yet he has not heard anything approaching a counter offer. However, when you consider the lowest rate a corporation can find in the world today is 12.5%, a 20% rate with a 7.5% differential and no in-house accounting/lawyer army to pay for may just make an attractive tax package for most corporations and actually have the effect that Rep. Ryan is attempting to elicit.
My point is, that before you start pounding off your ignorance and trying to pass it off as fact while building your baseless argument, understand that there are people who have done their homework and are going to call you on your reconstructed history and correct you, and when that happens your credibility goes right in the proverbial shitter and you are diminished.
Which, when considered within the whole argument is probably a good thing. Consider yourself insulted if you haven't figured that out as of yet.
First off, your [sic] blaming Mellon for
- - - - - - - - - - - - - -
I stopped right there on account of grammar ...
No, actually he's right...read the whole sentence again.
Gerunds require possessive modifiers -- is that what you were looking for?
Percent change US Real GDP 1934-1940 (pre-war, post-Roosevelt election):
1934: 10.8% ; 1935: 8.9% ; 1936: 13% ; 1937: 5.1%; 1938: -3.4% ; 1939: 8.1%; 1940: 8.8%.
Total nominal US GDP exceeded the 1929 peak beginning in 1936 and exceeded $1 Trillion for the first time ever in 1940.
Afraid we won't see results like that. The US economy rebounded sharply beginning in the 2nd year of Roosevelt's first term and went on to the greatest period in US economic history. Regarding the war, it was winning the peace through reconstruction programs like the Marshall Plan (another Roosevelt vision) that kept prosperity going
http://www.independent.org/pdf/tir/tir_01_4_higgs.pdf
Yeah, sure. We bow to our God, Roosevelt.
BTW: GDP just measures spending. Give me an unlimited credit cards, some bombs, some Nazis to bomb and watch me "boost" GDP.
Rofl.
Booooyaaaaaaaa!!!!
OH SHit,.. that was your article Tyler.... sorry,... but you are a bit off on your history. I meant to correct your comments on the Egyptian Revolution a week or two ago also, but I wasn't signed up, but you have the historic process confused a bit. I'd be happy to send you my paper On Revolution that I have coming out of my book soon if you'd care to see that particular chapter as revolutions do follow a historic process. Again, sorry to come down on you so hard.
Enough brown nosing. You have been up and running for 3 weeks and 6 days, not that I care, but since you stated you meant to correct one of the Tyler's comments a week or two ago (regarding the Egyptian Revolution) I thought I would click on your name to see how long you have been around.
Just so you know, sucking up to anyone here is pretty pathetic.
Zero Hedge, you've just been HUFFPOED...
Before becoming a journalist, Nomi worked on Wall Street as a managing director at Goldman Sachs, and running the international analytics group at Bear Stearns in London.
She has appeared on numerous TV; internationally on BBC World, BBC and Russian TV, and nationally on CNN, CNBC, MSNBC, ABC, CSPAN, Democracy Now, Fox and PBS. She has been featured on hundreds of radio shows globally including for CNNRadio, Marketplace, Air America, NPR, regional Pacifica stations, New Zealand, BBC, and Canadian Programming.
Her writing has appeared in The New York Times, Fortune, Newsday, Mother Jones, The Daily Beast, Newsweek, Slate.com, The Guardian UK, The Nation, The American Prospect, Alternet, LaVanguardia, and other publications.
.........
LMFAO at this resume of bullshit...
You mean AOL; ed... It's all in good fun. We do need some deep cuts, and for people to get off their rear ends on both sides. I respect both sides of isle. This crap is just endemic of a generation, that feels entitled. Lets crack out the plows and sow some crops.
All respect for Nomi Prins = GONE
See if this changes your mind:
http://www.youtube.com/watch?v=ncpkPsDIQzk&feature=related
Corporations don't need more incentives! They already own Washington (both parties).
To fix the budget start by cutting defense in half, hiking gas taxes, put in a consumption tax (with rebates for the less well off), and voila a lot of it will disappear. Oh and raise interest rates too. Take some pain and then rebuild a more solid economy, one not built on an ocean of debt.
They were kind of forced into it by endless government regulations on business. You gotta pay to play, so they pay. It is the system
Partially. But that cheap funny money for 2 year, on a devalued USD and ZERO interest rates didn't do crap for the Bricks and Mortar of good ole US of A. They just offshored everything and perpetuated the problem. These third world countries abuse their workforces and feed them junk. Until there is Parity in Input prices, it's the way it will be. Labor is the biggest input cost!
"Labor is the biggest input cost!"
While it is not always the case, it is of great consideration. It depends on the business, obviously. Let's look at a non-manufacturing business that cannot be outsourced: Costco. The average wage is around $17 an hour and they have excellent benefits. Costco employees have the same skill set as any other big box store -- but at Costco their employees are valued. The CEO refused to cut jobs in 2008-2009 or labor costs/benefits. They have tremendous efficiency. loyalty, and next to zero turnover because their employees are happy.
Most corporations do not nourish their input, whether it is white collar or blue. But if you treat people well, not surpisingly, their productivity can be triple that of others.
WalMart is a great example on how not to manage. On the whole, most WalMart employees couldn't tell you where anything is located in the store, don't give a shit, and I think the company pays the price with high turnover and poorly managed inventory. This is the case in the 3 nearest to me. Most employees make minimum wage up to a few dollars more. They encourage their employees to get on Medicaid their health care plan is so pathetic.
So here we have two companies (competitors when you pit Sams against Costco). WalMart topped out at the January 2000 highs at $70 and has been dividend only money ever since as it hangs out now at $52. Costco is currently trading within a dollar of it's all time high. So much for cost cutting and low wages making WalMart the better investment.
In California, WalMart has closed a significant amount of their Sam's Clubs over the last few years (as well as other parts of the country). Part of this is due to the overbuild of the south of Sacramento, Stockton, Modesto, Fresno et.al. that turned into ghost towns. However, in the same areas, Costco held steady. Perhaps Costco forecasts more than a year in advance.
O/T and a personal peeve, I also hate how WalMart goes into small towns in the USA, builds a small store and then decides to super size it to the grocery realm, deserting the previous real estate that usually just stays vacant. I've seen it all across the country--the empty smaller WalMart tombs sit there as wasted space because they needed a bigger store.
I used to manage hundreds of people. I treated them like human beings and I had a tremendous team that worked very hard. Back in B school I remember the styles taught at the time regarding management with scientific (assembly line) at the lower rung of approaches since people were just treated like cogs in the wheel.
The truth is as long as we treat workers like cogs in the wheel and corporations forever seek the "cheapest" unskilled labor around the globe for manufacturing, we are all losers. The bean counters always underestimate the simple fact that there are costs associated with chasing cheap labor from country to country, leaving a mess behind as they close opertions to get the next 2 cent an hour employee.
Pay people well, create a great work environment and most people are actually glad to work for you. Sometimes you get a few not worth keeping but by and large, you get what you pay for.
As far as taxing corporations that continue to export jobs or not, lower the rate as long as what follows is done with no exceptions: Close the loopholes completely, take away their corporate personhood, get rid of their ability to lobby their way to tax freedom for a start--then we can lower the rate. Until then, it's just silly speculation of a better world.
Lest we forget: Corporate farcism is alive and well in the US, Land of the Banksta, Home of the Slave.
What I wish to know, is how much of the 6 Trillion is actually cuts and not derivative of an assumption of future revenues. If we held revenues the same and didnt assume economic growth because of lowered corporate tax rates (which i dont give a shit either way- may or may not work) how much are the real cuts. It's my cynical predisposition to believe it's not nearly proportionate-- youll have to excuse my assumption until it's proven wrong. So please somebody do that and assure me we're not jumping right into another ritualistic self flaggelation of the middle class, by the middle class. Because if we're gutting medicare and medicaid et al. we better fucking get something for it!
"Because if we're gutting medicare and medicaid et al. we better fucking get something for it!" - Old dude
"Because if we cease blowing up pregnant Iraqi women, we better fucking get something for it!" - Weapons manufacturer
"Because if we cease getting corporate welfare, we better fucking get something for it!" - Auto factory operator
"Because if we cease arresting people for growing the wrong kind of plants, we better fucking get something for it!" - Jailor
Ad nauseum...
I have been self employed since 1985. I pay for my own healthcare. Always have!
Yes.
Not exactly a sound counterpoint in that EVERYONE will get old at some point. I'm 27 and I worry about these kinds of concessions. I look at what i'm giving up vs. what the more priviledged are, and frankly i see a stark contrast. You however, see an opportunity to troll about how my valid question doesnt deserve answering. Trololol my firend, but please dont get in the way of my pursuit for knowledge.
Sorry, no can do. The middle class is going to lose Medicare, SS, the ability to give their children a higher education. The next step is for the poor to lose food stamps, subsidized housing, and Medicaid. Then the last step will be for the elite to lose their tax liability.
this is what i thought
Could the author please, given their obviously bleeding liberal tendancies, EXPLAIN HOW PRES OBAMA'S BUDGET MATH WORKS? PLEASE EXPLAIN HOW INCREASING DEFICITS EQUALS "LIVING WITHIN OUR MEANS"?
A few more points:
(1) Lowering the corporate rate, if you read the DEFICIT COMMISSION REPORT, sought to LOWER THE RATE + BROADEN THE BASE (their words, not mine) and eliminate all what people on the left coast refer to "TAX LOOPHOLES" unless they are for GOING (or GROWING) "GREEN" , "NEXT GENERATION INNOVATION" , or a whole host of other liberal buzz-words. Thus you bring in more tax receipts by simplifying the tax code with fewer exceptions "loopholes" despite having a lower headline rate.
Here's some "basic math":
CURRENT SYSTEM: Taxable Income $1000 ; Tax Rate 35% ; Tax Credit $250 ==> Tax Collected : (1000)x(35%) - $250 = $100 or 10% EFFECTIVE TAX RATE.
LOWER RATE with no Credits: Taxable Income $1000 ; Tax Rate 25% ; Tax Collected = $250
So you can see, the arithmatic is QUITE SIMPLE, LOWER RATE, LESS INCENTIVE TO HIRE MORE ACCOUNTANTS & higher tax receipts.
You could also find info on this subject on the JOINT COMMITTEE ON TAXATION'S SITE, they wrote a paper on "TAX EXPENDITURES" which should clear up your confusion.
(2) Much like an addict, you must first admit you have a problem. OBAMA'S BUDGET takes the position of a "FUNCTIONAL ADDICT".....as if there were such a thing
(3) With respect to Mr. Mellon in the 1920s, you may want to see the effectiveness of the 95 and 97% TOP MARGINAL RATES enacted by another socialist wizkid......SEE HOW MUCH ADDITIONAL TAX REVENUE CAME INTO THE TREASURY. ONLY ONE TAXPAYER, Mr Rockefeller, paid the top rate. This so frustrated the THEN (and CURRENT PRESIDENT) that he (they) both admonished the GREEDY BUSINESS OWNERS FOR HOARDING CASH & NOT HIRING WORKERS.
While I respect the liberal view point, it certainly does not put one in a position to argue about "BUDGET MATH" as you havent a leg to stand on (irrespective of your professional credentials)
Best.
First of all, I want to say that Nomi Prins is one of my heros for her work and publications on the shenanigans that make up the foundation of the financial services industry and the relationship between government and finance. Her work is top notch. I do believe that tax rates for people and corporations should be reduced. Tax rates are lower overseas and this is just another reason for companies to move overseas and this is bad for all of us. At the same time, the Federal Gov needs to stop the economic central planning they promote through the tax system. We all just read that GE paid an average tax rate of 3.6% of income over the past 5? years. In some sense the tax rate for big companies with their armies of tax lawyers is irrelevant. They take advantage of every tax loop hole on the planet., and pay bupkis. It is the small business guy that has a few million of income or less that pays the big tax. So lets give them a break and get rid of the loop holes and lower the rates.
I for one would love to have a cup of coffee with Nomi to discuss the issues of the day. She is brilliant!
http://www.TheAngryGrapes.Com
" cabernet
It is the small business guy that has a few million of income or less that pays the big tax. So lets give them a break and get rid of the loop holes and lower the rates."
We agree, that area of business is one of the main losses of job's in our system. The "small business guy" is and has been getting strangled to death.
Health and comp. Ins, good's and services, fuel, commodities etc. The cost burden is totally out of control.
Time for tea not coffee IMHO......
the tax code is nothing more than a way for the DC elites to buy power and influence by granting favors to the elites of their choosing.
you clearly fail to understand that all taxes in the end are paid by citizens. "corporations" may write the check but ultimately the money comes out of the pockets of people.
If you don't understand that, think about it for a while. If your cost go up (higher taxes) either you increases prices (paid by consumers) or reduce costs (wages earned by workers). Pretty simple really.
I am not a believer in no corporate income tax, but the notion that raising corporate taxes will solve everything is a canard.
Do you think GE is able to pay no taxes because they are just smarter? No, it is because they buy votes to get special loopholes that benefit them.
simpify the code, it isn't supposed to be a system for buying favors.
Nice try at being a shill for our Democrat masters.
Exactly!! Corporate taxes are senseless. I say drop them completely.
say what?
Yes, let's stop all taxation on all activities that are PRODUCTIVE. Tax non-productive activity, like the transfer of multi-generational wealth to the useless, spoiled winners of the genetic lottery. The Paris Hiltons of the world should not be paying less in taxes on their multigenerational wealth transfer than some small business owner who's busting his hump 80+ hours per week to earn 100K, while putting his kids through college.
The repubs would sell that as family farmers losing their homesteads, and granny's estate of $5000 to her grandbabies would go to the IRS. Hell their is no tax for transfers less than 5mil or something like that.
How did you get the badazz fonts?
I'm in favor of dropping the corporate tax rate down to 0% and making up the difference by increasing tariffs on all imported goods. If done correctly, it would drive manufacturing back into the USA creating plenty of new jobs and real wage growth.
Charging taxes to corporations doesn't make any sense because the tax will be viewed as just another expense to be passed onto the consumers via higher prices. Consumers are the ones who pay whatever tax corporations are required to pay.
"increasing tariffs on all imported goods. If done correctly, it would drive manufacturing back into the USA creating plenty of new jobs and real wage growth. "
Let's take it further. I'd like to ban all imported goods from entering my neighborhood. If done correctly, it would drive manufacturing back into my neighborhood creating tons of jobs and real wage growth. Imagine how much work there will be with everyone growing vegetables in their lawns just to keep us from starving!
Are you completely mental? Increasing tarrifs would result in trade tensions and higher consumers costs. So now you are a protectionist Liberal? What is it your little corner of the world manufactures. Chips,commodity mining, Intellectual technology, Transportation, Biotech?
I was being sarcastic. I was showing how errecting tarriffs and hampering free trade collapses the division of labor that prosperity depends upon.
If you want to impoverish Americans further and deprive them of their ability to peacefully and voluntary perform exchanges with others, then errecting more tarriffs is an excellent way to proceed.
Cute. They don't want to get it that if we impose tariffs the whole economy goes down because they retaliate by not buying US debt and US exports which keepour blue chip companies alive. That sets off a chain reaction of capital exodus, dollar devaluation, inflation and unemployment. That would indeed put us back in Smoot-Hawley Hell like in 1933 with 25% unemployment and corporate America in shutdown. At least back then we were a net creditor nation unlike now. If they wanted to push it and demand actual payment you'd get 50% unemployment.
And it is not even necessary for the foreigners to "retaliate" - with similar politically-motivated economically-unfounded measures - for the self-harm to be caused.
That's fear mongering and complete bs.
Teach em to fish. Americans. Where did that get lost?
Yea and oil is at the front of the line
Agree. I was not taking any potshots at Ms Prins as I noted, "irrespective of your professional credentials"
Most liberals are very bright, after all, they are not called the "liberal elites" for nothing. However, if one puts ones self out there as not understanding a very basic proposal because the math doesn't work, well, then they are blinded by their political ideology.
Most liberals don't understand economics. The thing they do know how to do is meddle and try to control the lives of others.
Good one! The two most worthless, costly and invasive wars are the wars on drugs and terror. Both, created and promoted by Republicans.
I understand this (not that I'm Democrat) catch someone with 12 weed plants or some putz who makes a silly bomb threat, both of which weren't costing society a thing, and jail them at a cost to society of $35k a year for 20 years is absolutely ridiculous!
The damn liberals won't even allow people to play Texas Hold 'Em over the internet for money. (sarcasm)
About as bright as the wise man in the Monty Python "She's a Witch" portion of Holy Grail. Yep.
Isn't your remark a (pot calling the Kettle Black)? An estate tax person arguing tax reform! You must carry a bible with you?
I am not an Estate Tax person. I am a small biz owner who happens to be an advocate for lower taxes on any EARNED INCOME, and HIGHER taxes on Estates- where the truly "wealthy" pass on their multi-generational windfalls through cute tax loopholes, trusts, and other games. Winners of the genetic lottery haven't earned their windfall. That is the ONE flippin tax that actually DOES makes sense, because it doesn't BOG DOWN and disincentivize productivity. The Boomers don't want to talk about Estate Taxes, though, since they are arguably the most most greedy generation in the history of mankind, and it wasn't enough to vote in politicians that would bring back the goodies to their districts/States. Now they want to make sure when their parents kick-off, they get ALL OF IT, every stinkin penny, tax-free. You want some fairness? Let the boomers pay back the future generations they've robbed blind by kicking the Estate tax up to the highest personal or corporate tax rate.
A financial planner? P.S. I'm really early GEN-X.
Canada has no estate tax. Unemployment 7.8%
No tax on gains on real estate if it is your personal residence, unlike the states.
Canada is way more socialist than the US, according to some. Maybe you guys just don't know how to do socialism. You are all over the map.... some kind of attention deficit syndrome, I suspect.
+++++++++
+1
I see this locally with some who live off multi-generational wealth and have NEVER held down a job or done anything that could be considered worthwhile. Totally sickening, IMHO.
Hopefully my reply sticks this time...
So you want all earned income to be taxed at a lower rate, but you want to raise Estate taxes? This country is laughable. Everyone is so self-interested it's amazing.
http://www.youtube.com/watch?v=zrzMhU_4m-g
If you want to fix the problem of offshoring, impose an import tax. Call it an environment tax or a slave labor tax, whatever. 25% would do. You could then decide on an honest price basis whether to support China's slave labor and environmental degradation or labor and environment laws in the US and Europe.
Works for me. We can call it the (indentured servitude tax). On behalf of the Fukushima 50!
So Yen Cross, which is it, tarriffs or no tarriffs? Free trade or unfree trade? Or can you even make up your mind???
Earlier we had this
by Yen Cross
on Tue, 04/05/2011 - 20:42
Are you completely mental? Increasing tarrifs would result in trade tensions and higher consumers costs
I clearly stated ."reduce corporate taxes" Lets do it on sub-chapter-s and llp's. It will get the middle class spooled back up again. Tarriffs should be used as a tool not a threat.
Yes, and I'm sure the Chinese will then buy so many more of our treasuries.
CYN is (FLAT) on UST
Leaving aside for the moment the petty let's be children and see if we can grind the government to a halt game going on amongst parties and sub-parties.
The Wisconsin Dems were the children, fleeing to IL to shut down the government. The entire Congress (and the Presidency) was controlled by the Dems, last year. With that in mind (excerpt from Wikipedia):
The United States Federal Budget for Fiscal Year 2011, is a spending request by President Barack Obama to fund government operations for October 2010–September 2011. The budget did not pass, and on September 29, 2010, the Congress voted on a continuing resolution, to keep the government running until December 3, 2010. On December 2, 2010, Congress passed an extension to fund the federal government for FY 2011 through December 18, 2010. On December 17, 2010, Congress passed another continuing resolution to fund the federal government for only three more days. On December 21, 2010, the Congress voted on a fourth continuing resolution, to keep the government running until March 4, 2011. On March 2, 2011, the Senate followed the House in approving a fifth spending extension to fund the government through March 18; the bill was signed by President Obama the same day. On March 16, the CR was again extended to April 8.
The Dems had an opportunity to craft this budget with FULL control of the House, the Senate, and the Presidency. They decided to tuck tail and run before the November election, so they could not be on the record for the Obamination of a budget that would ensue.
Some of us don't have short memories...
So you think the Democrats should have done what the Republicans want to do now? You think the Democrats should have kept social spending high while slashing defense spending (the opposite of what the Republicans want to do)? Interesting..
Nomi, Nomi, Nomi ... your head is so far up your ass you have ring around the collar! Were you laid off from HuffPo after the AOL merger that you found it fitting to submit something on ZH.
Tax rates don't matter in this era of the Corporate State. Whether it's 25%, 35%, or 95% the tax codes are set up such that the government oligarchs and the corporate state take full advantage of the loopholes at the expense of the average taxpayer. What makes you believe that GE would pay its fair share once tax rates are increased. The United States already have the enviable position of having the second highest corporate tax rates (soon to be the highest) the planet.
A better use of bandwidth would be an article urging an audit of Geithner's 2010 Turbotax return.
Nomi, Nomi, Nomi ... your head is so far up your ass you have ring around the collar! Were you laid off from HuffPo after the AOL merger that you found it fitting to submit something on ZH.
Tax rates don't matter in this era of the Corporate State. Whether it's 25%, 35%, or 95% the tax codes are set up such that the government oligarchs and the corporate state take full advantage of the loopholes at the expense of the average taxpayer. What makes you believe that GE would pay its fair share once tax rates are increased. The United States already have the enviable position of having the second highest corporate tax rates (soon to be the highest) the planet.
A better use of bandwidth would be an article urging an audit of Geithner's 2010 Turbotax return.
"Nomi, Nomi, Nomi ... your head is so far up your ass you have ring around the collar!"
Thanks for the laugh. Might have to steal that one from you.
Everybody plays the game of "armageddon - if you don't do it this way it will be the end of the world."
The truth is, the tax rates need to be higher on the highest earners and lower on the rest. The fewer the loopholes the better.
Our economy has always functioned the best when that was true. (See post WWII when the highest tax rate was 90% on all income over $400k.)
I realize that in a global economy that is next to impossible, but lowering the corporate tax rates has not created jobs and it has not led to companies repatriating their earnings. And why would they when they can still pay factory workers in China and Third-World nations $5 a day.
Post world war II we were the only industrial based economy left standing. That's why we flourished. That and an enormous peace dividend coupled with a free and growing society. It had nothing to do with tax rates. A flat tax and no loopholes makes it fair for all involved.
You obviously never heard of the 70's and the early 80's. Which is basically just a culmination of two decades worth of economic mismanagement.
It's this sort of BS revisionist history and disinformation that permeates a lot of discussions nowadays.
Yeah sure let's expropriate 90 cents to every dollar a corporation or an individual makes for the good of the collective and have the government manage the money because history dictates how well that works, right?
The fact of the matter is corporations don't pay taxes, people pay taxes. Corporate income taxes are paid from the coffers of the shareholders or the owners of capital. The same said shareholders are once again taxed via capital gains and dividends taxation.
What works best is a flatter tax structure less all the "credits" and "special deductions" with most of the taxation levied on consumption. Ironically, this is a structure that "do-gooder" lefties would find appealing as it puts most of the tax burden on the wealthier segment of the economy since they consume more. Alas, the banking oligarchs know that this would hampen an economy fueled mostly by limitless consumption (70% of GDP), so they co-opted said "do-gooder" leftists and the middle-class is once again left picking up the tab.
You obviously never heard of the 70's and the early 80's. Which is basically just a culmination of two decades worth of economic mismanagement.
It's this sort of BS revisionist history and disinformation that permeates a lot of discussions nowadays.
Yeah sure let's expropriate 90 cents to every dollar a corporation or an individual makes for the good of the collective and have the government manage the money because history dictates how well that works, right?
The fact of the matter is corporations don't pay taxes, people pay taxes. Corporate income taxes are paid from the coffers of the shareholders or the owners of capital. The same said shareholders are once again taxed via capital gains and dividends taxation.
What works best is a flatter tax structure less all the "credits" and "special deductions" with most of the taxation levied on consumption. Ironically, this is a structure that "do-gooder" lefties would find appealing as it puts most of the tax burden on the wealthier segment of the economy since they consume more. Alas, the banking oligarchs know that this would hampen an economy fueled mostly by limitless consumption (70% of GDP), so they co-opted said "do-gooder" leftists and the middle-class is once again left picking up the tab.
Ya know what makes no sense? The Federal income tax.
Do away with that bitch.
While you're at it lower taxes on all business, I don't give a shit if they have a monopoly or not. Cut all entitlements. You want to have an entitlement to health care? Get a second job. Want health care when you're retired? Don't buy that 60 inch plazma....save.
Disband/defund all wasteful agencies and you can start with the Department of Education which I think is one of the biggest failures in the great American social experiment.
Americans should have the entitlement to the opportunity to work, everything else is earned and privileged. If you can't work you rely on charity. And you know why charity works so well? It keeps people from being assholes while they're incapacitated.
I just solved every major problem currently facing America to include getting rid of the Federal Reserve (the abolishment of the 16th amendment which curiously was started in the same year the Fed was started 1913.) The Fed can't operate without the Federal income tax, or the IRS which is the chief collector of that tax...also the most hated institution in the United States.
So since you claim to have 10 fingers and can count, what the #uck is your solution to the problem?
You #uckin liberals are all the same.
He's displayed more leadership than the entire US government combined.
+1000 Word up.
Why not cut government by 50% or more?
You won't miss it, comrades.
Cut Gov but keep my SS checks a comin
.
One of the weaker articles I've seen here in months... short on fact, high on supposition and assumes corrolation over corroboration. Not upset at the opposing view... just weak intellectually. Certain articles here can get away with that depending on the topic although the bar is normally much higher here, but if your going to wade in political waters on this site... bring an A game or don't bother.
quote:"Sure, the budget stands a bloated mess. But the revenue side and mechanism is far more broken than the spending side, . . ."
Someones math is broken.
The first time government revenue eceeded 2 trillion was in 2000.
The next time it exceeded 2 Trillion was 2005. That was 6 years ago.
In 2006, 2007 and 2008 it was near 2.5 trillion. I 2009 and 2010, it was near 2.1 Trillion.
This year, revenue is projected to be off the 2007 high of 2.568 trillion by 20%.
Spending on the other hand was never above 3 trillion until 2009. This year it is prjected to be 3.8 trillion.
Revenue is NOT "far more broken" than spending.
At a time when reveues are down 20% expenses are up 30%.
The problem is spending
Makes sense to me bozo. Now this makes no sense.
http://www.gemzies.com/img_photos/fire_in_an_wind_turbine_wind_energy_2_...
For Ident and Howard Beale,... hey, blow me guys. First Ident, if you ever saw Lincoln's original Gettysburg Address you'd notice a few spelling errors, but it still made sense. And Howard, I've been here a lot longer but had to start with a new id because they screwed my password. Personally, I have a lot of respect for Tyler and I think he does a hell of a job but he's not right about his history all the time.... and you know what Ident (in the side of your head), he makes spelling errors on occassion also. It happens when you write a great deal Identhead, but you wouldn't know anything about that because your perfect,... by virtue of not writing anything challenging enough where you might make a mistake. It's a trick pony you control freaks use to create the illusion of perfection.
The idea of cutting any taxes without at least an offsetting cut in spending is insane - it means only one thing: replacing existing taxes with the most regressive and damaging tax of all, inflation.
That said, the idea that raising corporate taxes (or any other taxes) will improve the economy is idiotic. Post hoc ergo propter hoc indeed for the morons spouting that drivel. Government produces nothing. The more capital it requires, the less capital for production, and the poorer we all become. And regardless, raising the corporate tax rate will mean only one thing: instead of paying none of the 35% tax it should, GE will pay none of the 45% or 55% tax it should. The 'logic' of the OP in that regard reminds me of the people who moan about government bein in the pockets of the corporations and who want to solve this problem by...yep...giving the government more power! Non sequitur. High taxes and economic regulations don't restrain the special interests that own the people who make the laws! It only restrains the small-time competition, which is the intention when the law is written! The complexity of the tax code and regulations is intentional! Only massive corporations with economies of scale can hire the lawyers to utilize all the loopholes...get it?
+1
That's what I meant to say with all the expletives deleted!
Get rid of the fucking tax code as it currently exists - no more frigging exemptions, loopholes, etc. Strictly a percentage, then you won't have entities earning m(b)illions and getting refunds. It would eliminate a large percentage of the chicanery practiced in the halls of congress when the congresslooters prostitute themselves for the m(b)illions they stockpile in their election comittees. Just so they can fist fuck us dumbasses who end up paying taxes, all the while claiming they are helping the common man.
Of course some dumb ass like Krugman will claim that will be bad for the economy because of all the shysters lawyers/tax accountants/turbo tax programmers this would put out of work.
Whew, glad I got that off my chest!
I'm a very wealthy guy - inherited most of my money - so naturally I'm a Republican. That's because the core concern of the powers behind my party has always been 'more money for me' - me, of course, meaning the mega rich. Now, we realize that the lower classes aren't going to get all pumped up to vote Republican if we come out and tell them we don't give a rat's ass about anybody but the rich, so we keep the political spot-light on gay marriage, abortion, that cute little Baby Jesus, guns, small government, immigrants and the uppity coloreds - all the things we've hoodwinked small-town America into believing are central to its well being.
Obviously, we don't give a steaming cowflop about any of these issues. My homes and townhouses are guarded and my children go to exclusive private schools where brain-dead nonsense like creationism is definitely not on the curriculum. But the end justifies the means, and if dumbing down the message is what it takes to get Joe 6pack to vote the very candidates into office who work tirelessly to make life easier for me and more difficult for him, so be it. (thumbs up smiley)
Let's face it, these people are hopeless anyway; remember this is a country where half the population thinks Jesus is coming back sometime in the next 50 years to smite the sinners and carry the righteous white folk off to heaven. The undeserving wage-slaves should consider themselves lucky to get the trickle-down slops we toss their way. Isn't the fact they're not rich proof that they're inferior?
So while our Republican gofers in Congress work to lower income taxes for the top tenth of a percent of Americans who already own everything, fight raising the minimum wage for the coloreds and white trash, and strive to do away with odious inheritance taxes so that my descendants get to enjoy the sweet life of the new American aristocrat, we need guys like Glenn and Rush to blow smoke in the eyes of the dumb and gullible so that John Q doesn't catch on that he's being butt-fucked by the very people he votes for.
Thank Jesus I'm a billionaire!
PS. For years I have been telling the poor that my vast wealth is definitive proof that I am better than they are, and that, as a superior person, I should be allowed to accumulate and dispose of my money as I see fit.
I say to those born into poverty that they should hire private tutors, enroll their children in good prep schools, and then send the scruffy little brats off to Harvard and thus break the cycle of poverty. Once they've lifted themselves out of the gutter and proven their worth, then they'll be qualified to offer advice to their betters on how we should be taxed.
Meritocracy is what this great country of ours is all about. The poor are poor because they refuse to make the necessary sacrifices.
And as proof of how my wealth is "a great benefit to all", I'm off to Washington tomorrow to buy myself another Congressman!!
Thank goodness you are not connected to some union that forces people who want work to contribute to their coffers so they can go off to Washington and buy a congressman. Obviously you are much more ethical.
That was simultaneously funny and repulsive. Quite an accomplishment.
What union do you head?
None, but I do have internet access....do you?
The American Federation of State, County and Municipal Employees is now the biggest outside spender of the 2010 elections, thanks to an 11th-hour effort to boost Democrats that has vaulted the public-sector union ahead of the U.S. Chamber of Commerce, the AFL-CIO and a flock of new Republican groups in campaign spending.
AFSCME, the public-employees union, has vaulted ahead of the U.S. Chamber of Commerce to become the largest campaign spender of 2010. Jerry Seib discusses how that could boost the Democrats? Plus, Neil King on the Republican wave sweeping Indiana.
The 1.6 million-member AFSCME is spending a total of $87.5 million on the elections after tapping into a $16 million emergency account to help fortify the Democrats' hold on Congress. Last week, AFSCME dug deeper, taking out a $2 million loan to fund its push. The group is spending money on television advertisements, phone calls, campaign mailings and other political efforts, helped by a Supreme Court decision that loosened restrictions on campaign spending.
"We're the big dog," said Larry Scanlon, the head of AFSCME's political operations. "But we don't like to brag."
That is misleading. That union is the largest SINGLE contributor. But I bet their contributions are dwarfed by all of the corporate/Koch money that supports the Republican candidates.
Remember, the union money comes from the thousands of members that contribute to the union fund.
Remember, it is a free world. If they don't like the union and its dues they can move to a nonunion workplace! The contributions are thus: voluntary.
I love Amerika!
gh
"by Plumplechook"
Plump boy, don't loose any sleep, not just yet........
That is spot on.
Very funny!
Regardless of how you think taxes should be allocated, what kind of dizzy broad thinks an organization that takes in over $2 trillion IN ONE YEAR has a REVENUE problem????? Sheesh.
Oh boy, she's been drugged, ruffies maybe?
Prins, I'm just pissed you got 15 minutes of fame for less than 15 cents of logic. Put the bong pipe down and step away from it please...
Since nominal rate has no real bearing on big corporations like GE, what the nominal rate does have impact on are the medium and small corporations that can not afford to hire gaggles of CPA's and tax lawyers. They also need to show profit in order to get loans from banks (unlike the TBTF's) . . . incidentally, those small and medium companies, being liable to failure and have resources reallocated away from them, are the real job growth engines in the economy because they have to create real jobs that deliver more goods/resources to the rest of the society than they take in (aka: profitability as judged by the market place). That's what makes those small and medium companies fare more important to the real economy than the job destroyers (i.e. taking in more resources than they deliver in goods/resources for others) that are knowns as the government and TBTF's (which are essentially government bureaucratic departments in all but name).
Cutting taxes is a good thing simply because tax rates most severely affect those who are not TBTF and can not afford to hire gaggles of accoutants and lawyers. Cutting spending on top of tax cuts would be even better. Both actions serve to reduce the wanton transfer of resources from the competitive segment of the economy where individuals have real choice to the gun-run sector where individual members of the society have no choice but have to take it up the rear end (by de jure or defacto government departments, aka TBTF's)
WASHINGTON -- An attempt by conservative author Bill Kristol to excite interest in the idea of a presidential run by Republican congressman Paul Ryan (R-Wis.) –- with Sen. Marco Rubio (R-Fla.) as his running mate -– fell flat with the conservative political establishment on Monday. “Sounds like an idea my good friend Bill Kristol would float, but that is not the nominating process of the Republican Party,” said Mel Sembler, a major Republican fundraiser and businessman. “Paul Ryan has already stated he is not interested in running and Marco Rubio just got to town as senator.” “I guess Bill Kristol will just have to stick to prognosticating,” Sembler told The Huffington Post. Part of the derision toward Kristol derives from his central role in thrusting former Gov. Sarah Palin (R-Alaska) onto the national stage......
http://www.huffingtonpost.com/social/Morgan_Express/bill-kristol-paul-ry...
this guy is just a front man. playing the game. what he proposes is too little too late. why do we sit here and listen to this bullshit day in and day out. everybody knows its bullshit. they aren't going to do a damn thing. and we all know it too, don't we?
I like Ryan's proposal: what a penny pincher? Out of $10 trillion we'll spend on Pentagon's procurement scam, he'll cut $78 billion over the next 10 years. Hooray for fiscally sound budgets.
Okay, here's my two cents...The tax policy debate is not aimed at the OEX or even the SPX. It seems to me political tax policy is a function of non-public corporations. Let's call them "Main Street" businesses rather than Wall Street businesses.
As has been said by many Republicans since OB moved into the White House, the key demographic for Republican tax policy are the LLP's, LLC's, and Sub-chapter S corps. These entities are designed to work "hand-and-glove" with their owners. Therefore the rates mentioned by Ryan are important.
In this regard, the most serious criticism of Ryan's ideas are that they pander to the key demographic of the Republican Party AND key swing Democrats who are also small business owners.
I still think the math sucks and that the federal system does not understand how to use its capital. The problem is no candidate seems willing to step forward and really deal with this problem. That said, we would be better off with a Ryan plan than allowing OB to convince people the federal system is better spending money than individual citizens.
So this commentary gets two and half stars. Apparently Nomi is not drinking the libertarian Kool-Aid enough.
So our corporations are ASSESSED one on the highest tax rates in the industrialized world, but they actually PAY the lowest, or among the lowest. GE paid no taxes and, in fact, got money from the government. Apparently two-thirds of the corporations pay no taxes at all. Their total contribution percentage-wise is among the lowest in history.
How do you like them apples? Maybe we should all stop paying our taxes, because cutting them can only give people more choices and more autonomy.
We'll just privatize fire protection, roads, snow removal, everything at quintuple the cost. Personally I'd wouldn't mind be assessed 150,000% of my salary if I only had to pay zero in the end.
Wake up libertarian zero-hedgers. Choice does not come without obligation. If you don't like where the tax money is going, that is one thing. Neither do I (i.e. 700 billion dollar military boondoggle).
But simply cutting taxes, especially on those companies which are bankrupting this country, shipping jobs overseas, and looking for no-bid government contracts and bailouts is not a solution. It's simply masochistic stupidity.
The document addresses your very complaint on page 53: "Remove distortions from the code by eliminating or modifying deductions, credits and special
carve-outs that leave many companies paying no tax at all."
http://paulryan.house.gov/UploadedFiles/PathToProsperityFY2012.pdf
Next, you need to head over to IRS.gov and brush up on the stats... http://www.irs.gov/taxstats/bustaxstats/article/0,,id=112834,00.html
You'll see that the big corporations already average a tax rate of 25% after credits. However, for companies in the asset range of $500K - $25 million, of which represents 50% of our private workforce, pay an average of 32% after credits. The budget proposes moving all these companies to a 25% rate. That's over $20 billion to small/medium businesses which will be offset by taxes at the top end with loopholes and credits removed.
And to be clear, in the eyes of an individual tax payer, it really doesn't matter if the individual is taxed or the corporation. Corporate tax is ultimately paid though lower employee wages and higher consumer prices. But the effect of dropping taxes to small/medium companies will directly result in increased revenue in capital to invest in assets and employees without increased company risk.
And the 1920s..it was an era of new regulations and the first experiment of the Fed with "easy money" and inflation. The first effect...increasing unemployment by the end of the 1920s. There was a lot more going on than just some tax rates.
And the Rothschild's smile :o)
so what raising them is better...you are an idiot
Leaving aside for the moment the petty let's be children and see if we can grind the government to a halt game... .
A better idea would be to completely abandon the delusional let's be children and pretend we can avoid national bankruptcy by the suspension of accounting rules and unlimited money printing game. Grinding the government to a halt would be a good start...
Economic Analysis of the House Budget Resolution by the Center for Data Analysis at The Heritage Foundation
April 5, 2011
Congressman Paul Ryan (R-WI), chairman of the Committee on the Budget of the U.S. House of Representatives, requested by letter that the Center for Data Analysis (CDA) undertake an economic analysis of the House Budget Resolution for federal fiscal year 2012 through 2021.1 The Chairman specifically asked the CDA to perform conventional and dynamic budget analysis, or analysis that is based on largely ?static? budget models and on economic models with dynamic economic properties. These economic models estimate the likely effects of policy change on the major components of economic activity—supply of resources, prices, demographic change, and so forth—which might affect federal fiscal results through revenues and outlay costs.
This report summarizes the results of the CDA’s analysis of the House Budget Resolution using these models. As a general matter, the CDA found that implementing the policy changes behind the Budget Resolution would significantly strengthen economic performance throughout the economy and dramatically improve federal fiscal results. This analysis demonstrates that significant actions can be taken now to reform our tax code and rein in the drivers of fiscal imbalances.
Indeed, our work shows that those steps can be taken with a strong confidence of ultimate success.
http://budget.house.gov/UploadedFiles/heritageanalysis452011.pdf
"Republican Paul Ryan's budget proposal is brave, radical, and smart."
http://www.slate.com/id/2290509
You are a fucking buffoon...companies don't pay taxes. The working man from the CEO to the sweeper pay all taxes either directly, or through higher prices or less job. Fucking buffoons like the author of this article should shut the fuck up and sit the fuck down.