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Will Taxing the Rich Fix the Deficit?

CrownThomas's picture




 

Good luck with that. Eventually the bar the central planners use to determine the "wealthy" will be lowered, and the middle class will get slammed. We all know spending will never be addressed in any meaningful way, so this is the only solution.

Well that, plus inflation as the treasury sells directly to the federal reserve.

 

 

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Mon, 11/12/2012 - 17:06 | 2973920 archon
archon's picture

You want to find out how much the "social justice" types really care about the "social justice" of taxation?  Implement a voting scheme that's like voting on corporate boards - you get as many votes as you own shares.  Say, for instance, pass a law that says every citizen gets one vote, plus one extra vote for every $10,000 dollars they pay in taxes.  Then, watch as the "social justice" people cry about how unfair it is that "the poor" don't pay enough taxes...

Mon, 11/12/2012 - 16:53 | 2973857 archon
archon's picture

According to the IRS, the top 2.7% of taxpayers account for 50% of all income tax revenues, and the top 0.5% account for 30% of all tax revenues.  The real injustice is not that the rich could pay more, but they aren't, but that the top 52% of taxpayers account for 98.2% of all tax revenues, which means that the bottom 48% get a free ride.  That's the real injustice - 48% of the people have no stake in the system whatsoever, and yet they get a vote just like the rest of us.  This kind of inequality is inevitable in any system that lacks any kind of internal controls or restraints, such as, for instance, "no person may be taxed more than 40%", and "no person may be taxed less than 10%.", which would still lead to a progressive tax scheme very similar to the one we have now, but at least it sets internal limits on the system.

Mon, 11/12/2012 - 14:36 | 2973387 b_thunder
b_thunder's picture

Oh really?  88% is too much?  So in the 1950s top 1% paid effective rate of 50%, but in the 50 years since the effective rate went from 50% to 17% for Buffett and 13% for Romney?  

In the same 50 years while the top 1% accumulated more and more wealth due ever lower taxes, the budget deficit skyrocketed, and either someone (and by "someone"i mean someone with money to spare) will pay for that right now, or there might just be an adverse economic twist like a default or a 25% inflation...  which will cause the election of a *real* Marxist governemnt,  with Denis Kucinich as Sec. of Treasury and Ralph Nader as NBER and OSHA chief.

So, dear top 1%,   you can either accept MUCH higher taxes, or write a lump sum check for 50-75% of your net worth,  or accept a 3% annual "wealth tax" like in Norway or take a gamble that you private jet will be able a) take off with all your gold onboard, b) have enough fuel to escape to a non-extradition and not socialist-inclined country.

 

 

Mon, 11/12/2012 - 13:15 | 2973030 Joebloinvestor
Joebloinvestor's picture

The end game has already started my friends when we demonize the wealthy.

Just like property seizure was supposed to make us feel good that they were getting the real "evil" people.

 

Mon, 11/12/2012 - 13:07 | 2972969 HomerToeclipper
HomerToeclipper's picture

Dont' worry Kids, the government will do one of 2 things: 1) re-define the term of "rich" to equal anyones wages over $100K (couple = $175K) or 2) use the current definition and inflate everyone to that mark

 

Mon, 11/12/2012 - 12:51 | 2972850 MikeMcGspot
MikeMcGspot's picture

If it ain't broke why fix it?

Why would anyone want to fix the deficit?

Mon, 11/12/2012 - 12:33 | 2972755 Bastiat
Bastiat's picture

Inflation will put the remainder of the "middle class" and eventually just about everyone working, in the 250+ bracket.  Ask not for whom the bell tolls.

Mon, 11/12/2012 - 12:15 | 2972659 moneybots
moneybots's picture

"I vote to redistribute 25% of YOUR wealth to the bank accounts of all Zero Hedge members. "

 

The redistribution is going to the top 1% or less.

 

S&P CEO's made an average of 380 times that of the average worker in 2011.  This was a 13% increase over the previous year.  The average worker is seeing real income declining.

Morganization.  See "The Men Who Built America."

 

 

Mon, 11/12/2012 - 12:13 | 2972648 redeals
redeals's picture

The proposal floating around to raise taxes on those making more than $250K a year would raise less than 3 days worth of operating money for the US government and cost 200,000 jobs.

But who cares if we hurt 200,000 families if we can have 3 more days of cash?

Mon, 11/12/2012 - 11:08 | 2972344 redd_green
redd_green's picture

Sorry Crown, old boy.   Its not about "fixing the deficit".  It is about making the tax laws more FAIR.   Why should a billionaire pay 14% when us working class stiffs have to pay almost 30%.   

Mon, 11/12/2012 - 12:19 | 2972686 Oldwood
Oldwood's picture

OK, what is fair about me paying half of my income in taxes so that a significant number of people can set on the ass doing nothing, admitting they have no intention of doing nothing and an administration spending my money to advertise to Americans how to better receive these unearned benefits (not to mention advertising in Mexico, to Mexicans, how to apply for benefits in the US when they come here illegally)? Also what is fair about me having to pay $20k+ in school taxes every year when I have no children and most of the money is spent on unionized shool teachers and administrators that are predominately educating the children of illegal aliens?

Mon, 11/12/2012 - 11:40 | 2972507 NEOSERF
NEOSERF's picture

I do agree that this $16T issue is just about unfixable at this point as a country where 70% of its GDP is based on buying stuff, austerity is simply a swift kick in the nuts and will never generate a meaningful deficit reduction.

Mon, 11/12/2012 - 11:41 | 2972504 monogratis
monogratis's picture

I think the bigger insult is all those Veteran's fought so that Federal employees get another day of not working and getting paid.

 

Hell of a sacrifice they are making for their country...

Mon, 11/12/2012 - 10:56 | 2972317 semperfi
semperfi's picture

 

Proposed "TAX THE RICH" plan:

Hollywood tax         90%
Mainstream Media tax  90%
Pro athlete tax       90%
Banker tax            90%
Lawyer tax            90%
Politician tax        95%

 

And because "everyone" needs to pay their "FAIR SHARE"...

 

Parasite tax          25%
Illegal Alien tax     50%

Mon, 11/12/2012 - 13:03 | 2972946 gckings19
gckings19's picture

The republicans should float a wealth tax.  tax anyone with assets over 10 million usd.   5% on 10-20 mio, 7.5% on 20-50 mio and 10% on 50 mio plus.  If your income is 250k you are rich but people with multiple tens of million in assets get a free pass.  lets see the democrats defend that one.   and foundations and trusts get hit as well.   i would love to see warren buffett when the repubs propose that one.  honestly, if the rich want to pay more taxes, then lets make em pay more........a lot more.

Mon, 11/12/2012 - 10:47 | 2972298 MFLTucson
MFLTucson's picture

THIS IS ABOUT CONTROL NOT TAXES.

Mon, 11/12/2012 - 10:39 | 2972282 buzzsaw99
buzzsaw99's picture

I surmise that the majority here are pro big business and pro billionaire elitist kleptocratic scum.

scarred old slaver knows he's doing alright hear him whip the women, just around midnight

Mon, 11/12/2012 - 10:19 | 2972220 gdogus erectus
gdogus erectus's picture

"Tax the rich.". This is a complex disinformation distraction argument. Whose definition of rich? Theirs? $250,000? That's not rich. That's barely making here in silicon valley. Rich. Come on. They have us arguing over whether $100k or $300k is rich. What a fucking farce. We are one to two orders of magnitude off.

Tax the rich. Are we talking about the mother fuckers who move their billions (trillions?) into charitable organizations so that they pay no taxes? Or write loopholes into tax code where they pay nothing?

This is another sly tactic not unlike calling social security an entitlement.

Mon, 11/12/2012 - 10:33 | 2972266 tonyt78
tonyt78's picture

You need to cut spending, especially bank bailouts and military hand outs to start.  I am okay with taxing billioniares but those making $100 - $300 k are just making it in NY and Silicon Valley (agree with you).

Mon, 11/12/2012 - 10:06 | 2972171 Clark Bent
Clark Bent's picture

Let's talk about what fairness means. Prior to Obama we were a relatively free market with private property rights. This status ahs been eroding for years with some reprieves, but was still the general rule absent some corruption. Free markets facilitated, encouraged, and permitted the greatest economic productivity in mankind's history. Every human being on the planet owed his or her survival to some extent on this amazibng productivity. The socialist countries meanwhile exported slavery, misery, and quite frequently murder. They consumed more than they produced across the board.

One of the necessary elements, i.e. without which not, is the rule of law. Under this approach, a set of formal rules about the extent and place of governmental coercion is decided before the game begins according to nuetral principles. This allows for the greatest predictability, such that workers can prepare for and enter into the market with an expectation that their inputs will be compensated and they can build wealth over a period of years. Under Obama we are replacing this model with the arbitrary rule of men. Their version of fairness has it that certain favored groups must enjoy rewards whether they have earned them or not. The decision is not based on merit, but on political favoritism. Obviously unless one is a member of this august group, he will be harvested to supply rewards to the favored groups that fall short of creating their own wealth. This discourages investments universally, and profoundly diminishes the general wealth of the nation and the world. At the margins people die in their millions becuase there simply no longer is the provender to sustain their lives. Closer to home, poverty increases, crime increases, and the habits that underlie productivity are replaced with those of aggressive taking. Individuals increase their spending on defending themselves from the rapacious. Oh, and it goes on and on. Libraries full. How socialist fariness actually repels justice and fulfilling lives. It is evil.  

Mon, 11/12/2012 - 11:06 | 2972351 redd_green
redd_green's picture

"Prior to Obama we were a relatively free market with private property rights."

 

You must be kidding, with this "prior to Obama" stuff. 

Mon, 11/12/2012 - 09:54 | 2972144 johnnymustardseed
johnnymustardseed's picture

The tax cuts that started with Reagan that were not offset by spending cuts increased deficits and fake GDP growth. The entire last 30 years real GDP has really been fake. How can anyone not underatand that we would eventually get to where we wre today. 48% of the deficit is from tax cuts that were never matched with any reductions in spending.

Mon, 11/12/2012 - 12:11 | 2972638 Oldwood
Oldwood's picture

Are you suggesting that every time that they reduced the marginal tax rates, tax revenues went down? I think You be wrong! Tax revenues have usually gone up, just never enough to match spending. The whole point is not about rate increases, it is about revenue increases which are not the same and usually inversely related incrementally. People are hung up on taxing the rich because they perceive the wealthy (which covers a lot of ground) uniformly guilty of causing the current mess. This economic justice is about economic revenge and is as nonproductive as about every other kind of revenge. Part of the problem here is that too many around the world are directed by emotion rather than facts or reality. People believed in fairly tales, be it that wonderfull house that is 20 times earnings or that stock portfolio with a 15% annual return or that wonderful socialist leaning president that will make everything magically fair, by simply taxing the rich while we sink slowly below the waves, wondering where we could have possibly gone wrong.

Mon, 11/12/2012 - 11:07 | 2972359 redd_green
redd_green's picture

You nailed it, MustardSeed.   Seems like folks addicted to Human Events propaganda can't see the truth.  

Mon, 11/12/2012 - 09:47 | 2972127 j.tennquist
j.tennquist's picture

Why does the argument always start with taxes?

The government needs to spend less.

Period.

Mon, 11/12/2012 - 13:21 | 2973066 OneTinSoldier66
OneTinSoldier66's picture

Because dividing people up into "classes" is the easiest way to promote envy, and then apply divide and conquer strategies.

 

Mon, 11/12/2012 - 11:34 | 2972483 MachoMan
MachoMan's picture

The same reason why cities always threaten to cut firefighters and policemen from the ranks first.

Mon, 11/12/2012 - 09:25 | 2972056 LawsofPhysics
LawsofPhysics's picture

What garbarge, none of this is sustainable and there is no "solution".  Default bitchez and don't talk to me about taxes unless you are williing to also talk about inflation.  Both are theft and both should be punishable by death.

Mon, 11/12/2012 - 11:17 | 2972396 monogratis
monogratis's picture

Absolutely.  Of course, talking about inflation would imply an educated, or at least actively informed populace...  The word dummies probably think inflation = good, deflation = bad, like a balloon.  BALLOONS ARE AWESOME DAMMIT.

Mon, 11/12/2012 - 09:24 | 2972054 Translator
Translator's picture

I bet voting for Ron Paul for President when he's not even on the ballot will fix this!!!!

 

 

StupidAsshats

Mon, 11/12/2012 - 10:21 | 2972022 “Rebellion to t...
“Rebellion to tyranny is obedience to God.”-ThomasJefferson's picture

 Will Taxing the Rich Fix the Deficit? Absolutely not.  The tax the rich policy is a cheap political trick that appeals to the poor and the stupid that the "rich" need to pay their fair share.

 

If they really want to tax the rich, the tax man should make a wealth tax.  In no time at all, every worthless Hollyweird actor/actress, and the children of multi billionaires like that old creep Warren Buffet, would be fanatical adherents of fiscal conservatism and a national sales tax policy.

 

Mon, 11/12/2012 - 13:31 | 2973115 Lord Koos
Lord Koos's picture

The rich might prefer paying a little more in taxes over having their heads in a guillotine.

Mon, 11/12/2012 - 11:14 | 2972391 MachoMan
MachoMan's picture

Don't worry, retirement accounts will be raided before too long.  Of course, we could argue whether paper assets were real wealth, but...

Mon, 11/12/2012 - 08:33 | 2971993 fijisailor
fijisailor's picture

You can always say that any one single approach will not fix the debt problem.  There must be many things done and taxing the rich is one of them.

Mon, 11/12/2012 - 09:50 | 2972131 wonderatitall
wonderatitall's picture

RIGHT!!! AND START WITH THE MOST WORTHLESS OF THE UPPER LEVEL...TEACHERS

I KNOW TOO MANY WITH SUVS PULLING DIESEL BOATS WITH SAVE THE BAY STICKERS ON THEM...AND THEY WORK EVEN LESS THAN OBAMA...TAX THEM...WHAT DO YOU HAVE TO KNOW IN OBAMAMERICA?  WER MA CHEK..THATS ABOUT IT

Mon, 11/12/2012 - 13:29 | 2973105 Lord Koos
Lord Koos's picture

Yeah, I remember when those uppity teachers got us into two expensive wars, sent our jobs to China, and crashed the economy.  Those worthless fuckers.

Mon, 11/12/2012 - 08:57 | 2972020 naitram
naitram's picture

Agreed.  Plus it helps to pay for excesses older generations have run up and saddled my generation with.  I'm not paying... let US default.  Few years of pain and we'll be back to fine.  People and manufacturing capacity don't evaporate, but maybe I'll be able to afford a house.  Here's a novel thought.

Mon, 11/12/2012 - 09:33 | 2972077 LawsofPhysics
LawsofPhysics's picture

Correct.  This is really about power and control, period.  If you can't "afford" a house the kleptocrats and fascists in power have considerable more control  over you.  Eventually, you will report to that FEMA camp.

Mon, 11/12/2012 - 11:23 | 2972414 monogratis
monogratis's picture

LoP.... good point, we are all rent-seekers now, aren't we?

 

I'd like to "rent" a tent pleez Mr DHS man.  It comes with free proctology exams and GMO gruel, right?

 

Mon, 11/12/2012 - 09:46 | 2972123 Griphook
Griphook's picture

Eventually, you will report to that FEMA camp.

I'll go out in a hail of bullets (much like Butch and Sundance) before I report to my camp.  And that'll solve two problem at once:  My problems wil be over and y'all will be rid of me.

 

 

Mon, 11/12/2012 - 09:50 | 2972132 LawsofPhysics
LawsofPhysics's picture

Please take some folks with you as well, the herd needs to be culled anyway.

Mon, 11/12/2012 - 10:58 | 2972322 MachoMan
MachoMan's picture

I'd appreciate it if you didn't shoot at me during your blaze of glory... 

Mon, 11/12/2012 - 10:28 | 2972253 Griphook
Griphook's picture

Won't matter...your FEMA cabin will still be overcrowded.

Mon, 11/12/2012 - 11:24 | 2972432 monogratis
monogratis's picture

WHAT?!?!?  HE GETS  A CABIN AND ALL I GET IS THIS MEASLY TENT?  THAT'S BS MAN.

Mon, 11/12/2012 - 08:33 | 2971991 spinone
spinone's picture

Taxing the rich corporations? That and cutting military spending will fix the deficit.

Don't let the MSM cofuse corporate taxes and regulation with small business (LLC) and individual taxes and regulation.

In 1950 corporations were taxed $1.50 for every $1.00 a corporation was taxed.  Now its the opposite.

Corporations have 3 types of cost:  labor, the cost of capital improvement, and the taxes.  By offshoring and automation they have cut labor costs.  By switching to financial engineering, they have cut capital costs (think GE).  The only cost left to cut was taxes.

GE paid no tax in 2010.

Mon, 11/12/2012 - 09:23 | 2972052 JPM Hater001
JPM Hater001's picture

"GE paid no tax in 2010."

GE has never paid taxes.  No company ever has. 

 

Taxes are paid by people.  All taxes on a business are going to be transferred on to the consumer...always.

Mon, 11/12/2012 - 09:34 | 2972078 LawsofPhysics
LawsofPhysics's picture

"Taxes are paid by people."

but I thought corporations are people.

Mon, 11/12/2012 - 10:15 | 2972197 Clark Bent
Clark Bent's picture

Legally corporations are persons. That is why they exist. So that they can hold property, make contracts, comply with regulations, collect and pay taxes, pay workman's compensation, be held responsible for unemployment, and health insurance, OSHA and a million other reasons. What the fuck is the point about rehashing this statement? Is this somehow important to idiots? Are they shocked by artificialness of artificial entities? This seems an unproductive piece of rhetoric. 

Mon, 11/12/2012 - 11:32 | 2972453 monogratis
monogratis's picture

Clark, do you know what "regulatory capture" is?  It is not the idea of a corporation that is bad, it is the fact that some corporations actually have MORE rights than individuals.  Rights are more or less a function of who's got better paid lawyers and lobbyists.  Wouldn't you agree?

Mon, 11/12/2012 - 10:21 | 2972229 LawsofPhysics
LawsofPhysics's picture

Then I guess I should only be paying what a corporation pays.  Stop with the bullshit already.  What are you, a recently unemployed MBA?

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