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I Put a Deal on the Table

Bruce Krasting's picture




 

 

The lack of anything concrete coming from either side on the cliff debacle is troubling. I don't think the process should be as hard as it is made out to be. I have a plan. I try to address all the hot-button issues. I also try to force significant concessions. I attempt to craft something that has a chance of working.

 

Before the specifics, I have to address the broad topic of "Debts and Deficits". My thoughts on the "big picture" drive some of the details in my proposal(s):

 

A) It is not possible, nor is it desirable, for the USA to have a balanced budget at anytime in the foreseeable future.

 

B) It is possible to reduce the deficits to a more manageable percentage of GDP. Achieving this will result in a lower trajectory of the rate of increase in the national debt.

 

C) All talk of deficits, budgets and taxes is a fools game. There is only one thing that matters. Economic growth will solve the debt problem, or it won't.

It doesn't matter what the tax rate on the top 2% is, or if the retirement age is pushed out a few years. For the next ten-years, it will be grow-or-die. Washington has to focus on that side of the equation. As of today, all the focus is in the wrong direction.

 

It proved difficult for me to solve all of the crushing economic issues facing the country in 300 words or less. My thoughts are presented first in summary, after that, the details.

 

SUMMARY

 

A series of compromise on taxes and spending that results with:

1) Income of $250 - $450 > to 37.5%.

2) Income of $450+ to 39.6%.

3) Income <$250 - Bush tax cuts are made permanent.

4) Long-term Cap. Gains - unchanged.

5) Patch the AMT for one-year.

6) The Payroll tax for Social Security reverts to 6.2% - A 2% increase.

7) Deductions for state and local taxes paid will be capped at $30,000. Deductions for mortgages and charity will be retained.

8) Inheritance tax will be 40% over $4m.

8) The Transaction Account guaranty will be allowed to expire.

9) Emergency unemployment benefits will be extended for one year.

10) The programed cuts in spending (the Sequestered Amounts) will be reduced by 50%.

11) Social Security and Medicare spending will be reduced by $1T from 2014 - 2023. 50% of the savings will come from Medicare, 50% from Social Security. The framework that achieves the savings at Social Security will be applied to both the Military and Federal Workers retirement funds.

12) A four-year, $500b spending program dedicated to infrastructure building will be established. A portion of this program will be funded with new federal excise taxes.

 

Now the long-winded discussion:

 

On Taxes

- The Bush era tax breaks for those under $250k should be made permanent. (Both sides can take credit for this)

- The Bush breaks for those >$250 will be increased as follows:

a) $250-450k goes to 37.5%

b) >$450 goes to the full 39.6%

The change in tax rates would be a substantial concession by Republicans. This is nearly 100% of what Obama has demanded. Note the carve-out for the $250-450 set. That actually is a significant portion of the top 2%, so when you look at the reality, the Republicans don't do so bad.

This increase in taxes would fail to achieve the minimum of $800b of increased revenues that Republicans have offered. To bring the revenue number up to $1trillion (Obama now wants 1.4T, but he previously agreed to 800b) I propose that there be limits put on deductions. This is an issue that Republicans have insisted on. Democrats hate this topic as it hurts homeowners (mortgage deduction) and charitable giving (this is about Religion).

To defuse this very tender topic I propose to limit deductions on only one class of deductions. State income and local property taxes deductions would be subject to a cap. The cap would be around $30,000. ALL other deductions would remain as they are today.

Who would win with this cap on "other taxes paid"? Red states like Texas would win very big (no state income tax). NY, California and Illinois would get crushed (all big Democratic states with big income and property taxes). It would drive a stake into the political "prizes" in the country.

All the big-ticket fund raisers for the Democrats on both coasts would pay for this compromise. If Republicans want some additional revenue, and to set themselves up for 2014, they will push for this. The Democrats won't have a leg to stand up on with any opposition.

 

-AMT would have to be patched over for another year. There simply is not enough time left for this complex topic to be worked out before New Year's Eve.

This is a terrible, stupid, awful, unfair and ill-conceived tax; but some form of it is necessary.

The classic example is Mitt Romney. He made $10m and paid 11% tax. Sorry, there has to be a minimum. The current minimum level for AMT is an absurdly high 28%. I think it should be 20%. A new minimum tax has to be part of a deal; it broadens the base, it raises revenues and insures that fat-cats like Warren Buffett finally pay their "fair share" (I want Warren to get what he's been saying).

Let's be clear about the implications of a minimum tax. Yes, it does some good things, but it will also have the effect of reducing charitable giving. Mitt would not have given $4m to the Mormon Church if he'd been faced with a 20% minimum tax. The "tax-efficiency" of his giving would have capped out his charity at only $2m. (It's about the money, after all)

Anyway, we're talking budgets and taxes; hard choices have to be made. Last I heard, there was something about Church and State anyway.

 

-The 2% reduction in payroll taxes will be eliminate. Sorry. Either Social Security (SS) is a self-funded program that doesn't add to the deficit (as so many liberals have claimed), or it is an entitlement program that sucks down $170B a year from the general tax payers. Those who love SS can't have their cake and eat it too.

Note: The 2% increase on payrolls is a very regressive tax increase. Come January, it will be felt by 155m workers. They will all hate that. This is a perfect opportunity for Republicans/Conservatives to swing popular opinion away from SS. This "mind change" of the voters away from SS is the only hope that Republican's have.

 

-The current low tax rates on dividends and capital gains will be retain. However, the establishment of a minimum tax (see above) will raise the effective tax on capital to 20% for those who have incomes/deductions that make them subject to the minimum. Again, this is a compromise that both sides should be willing to accept.

 

-Inheritance taxes will be set at 40%, the threshold for the tax will be set at $4m. (another compromise)

 

 

Okay, that solves all the tax matters that people have been fussing about. Now the rest of the issues:

 

Regulatory

- Do not extend Transaction Account Guaranty (subsidy for banks, TBTF issue - Trust me, the world will not end when this happens).

- Extend unemployment benefits for yet another year.

These trade-offs are on political lines. No one should argue about this horse-trade.

 

Sequestered Spending

IMHO, the cutback amounts that were agreed to as part of lat year's Budget Control Act were draconian. They were more of a "show-pony" to prove to the public that D.C. was serious. Recall that a lot of the maneuvering on this was driven to placate the likes of S&P. The motivations for setting the sequestered amounts were misguided. If there is to be a deal before the end of the year, a very big concession has to be made by both sides on spending.

Time does not permit much finesse in this important area. My simple solution is to cut the sequestered amounts in half.

 

Multi Year Stimulus Program

The problem, and the solution, is staring us in the face every day. The country needs a big investment in infrastructure. All our "stuff" is falling apart. Want construction jobs? Build things. Want high paying jobs? Build complicated things. Want economic growth? Build things that will have a long-term return on the investments. The list of things that need fixing/new is endless. The only question is, "Where does the money come from?"

 

I propose doing something radical. I would like to establish a national sales tax. The tax would be 1/2%; it would be applied to all retail sales EXCLUDING autos. The tax would be collected by the individual states. Washington would put up an additional $5 for every dollar of federal sales tax.

The retail sales number (again- ex-autos) is nearing $4T. A 1/2% national tax would raise only $20b. Such a small amount would not have a significant negative consequence to the economy. D.C.would contribute 5Xs the amount collected; bringing the total in year one to $120B. I would create borrowing authority for up to 75% of the next few years of anticipated revenues (this borrowing is secured by a dedicated source of revenue. This is a different type of debt, it gets paid back.) Borrowing will facilitate/accelerate the timing of the new infrastructure investments. 100% of all of this is spent on infrastructure - no leakage permitted. The states choose the projects.

$120b is a decent sized stimulus (equivalent to the 2% payroll cut). To be effective, there would have to be a commitment to do this for a minimum of four years. Every year, there would be an obligation of Congress to either extend it for an additional year, or let it die in the remaining three.

This would help the broader economy. Jobs would come fairly soon after inception; every month the demand for labor would rise. The results would be visible in a matter of years (new roads, bridges, airports, seaports, water projects etc.)

What I am proposing is very modest. By itself, it will not create a boom. Economically, it is a step in a direction that must be taken. Remember, it's grow or die. There will be opposition to any new tax, especially a federal consumption tax. It will add to the bill at the grocery store, gas pump and Wall-Mart.

Call me a fool, but I believe that everyone should have some skin in the game. Yes, the cost of a quart of milk for a family already living on the poverty line will go up by a penny. And the cost, all in, for those new spiked heels, will be $2.50 extra. But the fact is, the milk is probably being bought with food stamps, and who cares about the cost of those stilettos (or a boat for that matter).

I say to D.C., "Suck it up!" and get this done. If there is no movement on this front in 2013, then you can kiss off any chance for digging out of an economic hole for the rest of the Obama years.

The politics of this are interesting. I would like to hear a Pol say that this (or some/any version) is "off the table". That legislator would get their picture in the paper, for being a fool.

The deficit hawks will not like this. It would add $100b a year onto the deficit ledger. To this, I say that there are two kinds of debt; one is bad, the other is okay. NYC's Triborough Bridge has paid for itself 50Xs over. Same with the Golden Gate,the airports, the interstate, the water clean up/availability investments etc.

Who would love this plan? All fifty Governors would cheer. The states would have a pot load of money to spend. Yes, this will create its own set of problems, but governors can be held accountable a lot easier than some technocrats in D.C. If money has to be spent (it does) then I think it is better spent by the states.

Another group that would cheer, would be the 1,000,000 small business's (and their employees) who would benefit. What needs building requires steel, aluminum, concrete; it needs welders, masons, truck drivers, architects, engineers and designers.

So far I've covered all of the critical variables (including a nifty stimulus idea), save two. What remains are the thorniest of all issues. What to do with the debt limit and what to do about entitlements (Social Security/ Medicare/all other federal retirement plans).

 

The Debt Limit

The debt limit is one of the dumbest things ever created. It is an issue that, at the extreme , could send the country into a depression in a matter of months. (We came fairly close a year ago.) The debt limit creates the opportunity for a self inflicted wound that could lead to a systemic implosion. With these things in mind, it's easy to say "Fix this!".

But, sadly, the debt limit is a speed bump that must exist in some form. The US debt trajectory is simply unsustainable. Something has to exist that acts as a "check" in the system. That check is not coming from the White House, Congress or the Federal Reserve. The only thing left holding back exponential growth of red ink is the debt limit. So, as flawed as it is, the concept of a debt limit has to be retained.

This would be a big concession by Obama. In exchange for giving in on this, the Republicans would be forced to set a new debt limit that would cover the country through the 2014 elections. The debt limit agreement would be held hostage to a resolution of the final, and most difficult of all issues, entitlement reform. There is not a chance in a million that there can be any agreement on entitlements in the next 17 days; the issue is too complicated and too emotive.

 

Entitlements

There would be a framework for reforms as part of a deal to get over the cliff. In order for all of the tax fixes and other compromises I've described to get inked before the lights go out, there would have to be a deal that outlined the scope of the cuts in entitlements. Both sides would know what has to be accomplished, and be committed to the process.

Legislators would have a short window to complete a final agreement. If there is no deal on what gets cut to achieve the agreed target by April, then everything falls apart in a very big way. The debt ceiling extension (required in April) will be contingent on a final agreement on entitlements. The targets for entitlement cuts that will be agreed to in December and made into law by springtime:

2014 - 2023 Cuts in Social Security and Medicare = $1,000,000,000,000.(The Big T)

The cuts will come 50% from Medicare, 50% from Social Security.

 

I can hear the screams already. Obama wins the election, then turns on his base and guts America's favorite social programs? Not a chance! Hear me out.

- Over the ten-year period, Medicare (Does not include Medicaid and CHIPS) will pay out 4% of GDP. In real dollars that comes to $9T. $500B (5.5%) of savings/cuts has to be found as part of the final deal.

- Social Security will pay out $11 Trillion. Both sides of the aisle will have to find ways to cut $500b (4.5%).

What I'm proposing is by no means "gutting" these programs. If the folks in D.C can't agree on cutting $1T out of $20+T over ten-years, the country would deserve the consequences (Shutdown, default, downgrade). To get the complete package of a cliff saving deal, all of the parties would have to agree to the $1t, and sort out the details in 90 short days.

Obama has said that he would have a discussion on entitlements, "sometime next year". That doesn't work, it's not what most Americans want. It's asking for a fight. Obama, a number of Democrats, and the House Republicans, have to do what the have already promised.

I'm certain there is a political consensus to take a walk in this direction. No "new thinking" is required. The tools to achieve this have been discussed to death. Age and COLA adjustments, means testing, more taxes on benefits, higher fees. A beat down on the providers, blah, blah blah.

It would not be difficult to suck $1t out of these two very big pieces of the pie. To a significant extent, this would have to be born by those with both means and/or income. We are headed in the direction where medical benefits will be priced at 100% of the Social Security checks for those who have done well for themselves. Sorry.

Liberals will hate this. Their opposition is ideological, not economics. I think they have no argument at all. The objective of the changes in entitlements is to strengthen these programs so that they can achieve what they were intended for. An insurance safety net, not a retirement program will free medical.

70+% of the people who get these benefits are heavily dependent on them for basic necessities. The goal is to ensure that the 70% get what they need, the 30% who are less dependent (or don't really need it at all) have to pay a price.

One can't take a more liberal position than this. So folks like Krugman, Pelosi and all of the other defenders of "the safety net" will have to stand by and watch this happen.

Conservatives won't be pleased either, by and large, this is money out of their pockets. What they (and the country) get in return is an economic plan that has a chance, and a very important directional change for entitlements. That result would be worth the cost.

 

If Obama wants a legacy he will have to solve the fiscal cliff in a way that addresses the real problems the country faces. That means he has to take on entitlements. If Obama chooses to extend the Roosevelt Dream, there will be no fiscal cliff deal, and he will have no legacy at all.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Sun, 12/16/2012 - 01:02 | 3068025 Mediocritas
Mediocritas's picture

Typical politicians. They'll squabble and bicker like school children, trying to score political points, then at the last minute they'll all agree to spend more money they don't have, and can't ever get, to counteract the implosion of the private sector. There will be no fiscal cliff, you'll see.

I wouldn't be at all surprised to see some of Bruce's suggestions getting up, so his work here isn't in vain, even if it's generally disliked in the comments. In the end though, shuffling deck chairs on the Titanic is really quite pointless.

Unless some miracle occurs to kick start the independent US private sector (when I say independent, I am excluding parasitic private contractors that suck on the government teat without delivering value), then the US will just continue to fade and fade until the world loses faith and no amount of deck-chair shuffling will save the USD.

Sat, 12/15/2012 - 22:34 | 3067769 H E D G E H O G
H E D G E H O G's picture

i'm reading alot about the "INHERITANCE TAX" ON THE POSTS. MY TAKE IS WHO IN THE FUCK GIVES A FLYING FUCK ABOUT THE INHERITANCE TAX ON THE SITE!? IF YOU'VE GOT TO WORRY ABOUT PAYING TAXES ON YOUR 4+MILLION DOLLARS LEFT TO SOMEONE, THEN YOU'RE IN THE WRONG FUCKING PLACE DUDE........NO sympathy here AH.

Sat, 12/15/2012 - 21:48 | 3067677 P'Od_Accountant
P&#039;Od_Accountant's picture

Growth IS the underlying problem. This "deal" as you call it is not creative, new, imaginative nor worth consideration.  The conditions that led to this problem will not be adequately addressed, considered or even understood.  This will lead us right back to where we are right now.  Moving on because there is nothing to see here.

Sat, 12/15/2012 - 21:25 | 3067618 hairball48
hairball48's picture

"Permanent tax cut" is an oxymoron.

Sat, 12/15/2012 - 21:07 | 3067576 true brain
true brain's picture

You lost me 1/3 way down the piece because I don't want read anymore, because it's all nonsense.

If you know anything about closed system which the planet earth is, you'd know that everything -especially complex system- must occur in cycles. Growth, plateau, decline, death, spawn, growth again for anything- life, economy. THere is no escape. The economy must go into destruction before new creation. That means a period of suffering for the least capable, the ones with least resources etc, just like the past. In the current system, there is only slow death. What you want is a quick death, and the phoenix rises again.

Unless of course there is a paradigm shift: like fusion technology providing unlimited energy, or the average human being certain becomes a saint, or have an extra 100 IQ points.

Sat, 12/15/2012 - 20:56 | 3067554 Encroaching Darkness
Encroaching Darkness's picture

But Bruce, why would you want to reward the incompetent with MORE resources?

They can't balance the budget NOW, and you want to give them MORE, in new and increased taxes?

How about this: cut spending until the budget balances. Keep it up for four years; THEN, if managed, you can talk about tax increases.

Certainty of no new taxes would boost business confidence, allow increased investment, increased savings, and so forth.

What, not politically feasible? Then I guess it's crash and burn, since even the "cliff" only decreases the RATE of increasing spending. It doesn't actually CUT spending, and doesn't pay down a dollar of EXISTING debt.

When hell opens up and we lose too many good people to the FSA riots, then we can talk about what is politically feasible.

 

Sat, 12/15/2012 - 20:54 | 3067551 booboo
booboo's picture

"It is possible to reduce the deficits to a more manageable percentage of GDP. Achieving this will result in a lower trajectory of the rate of increase in the national debt."

If it is still increasing how is that reducing. It will always be out running growth, always.

You can do nothing until you rid the country of Government Sponsored medical monopolies. Obama Care solidifies them. Game, set, match.

Sat, 12/15/2012 - 20:48 | 3067530 QQQBall
QQQBall's picture

YEAH, AMT is totally awful... you should run for office - you already know how to kick the can down the road instead of dealing with a problem.

Sat, 12/15/2012 - 20:43 | 3067522 DR
DR's picture

"1) Income of $250 - $450 > to 37.5%."

"4) Long-term Cap. Gains - unchanged."

 

So a doctor earning a professional salary by doing something socially useful should get taxed at a higher rate than a hedge fund manager who got lucky due to the Fed QE+  and is cashing out his gains after one year?

 


 

 

 


Sun, 12/16/2012 - 11:25 | 3068499 nmewn
nmewn's picture

Yep, that's what the man said...lol.

Though I like to believe he did it that way, with the thought in mind, that screwing with the "market makers" would have deleterious effects on 401k's and government pensioners.

My thng is, when you observe a trap, don't step in it. If you're already in it, get out before it clamps shut.

Sat, 12/15/2012 - 19:44 | 3067406 quadcap
quadcap's picture

Blech.   Stick to "analysis", Bruce.   Your "policy" sucks.

 

Sat, 12/15/2012 - 19:36 | 3067384 H E D G E H O G
H E D G E H O G's picture

good post Bruce. My ONLY argrument with this whole thing is about the 2% "increase"(not an increase) on social security wages(tax). If people are making the max in salaries,etc., then by God they can afford to keep paying the 2% tax that was on them originally. Hell, they shouldn't even have a cap on wages and salaries. The Social Security Fund could survive on this alone. Do the numbers..............I worked 35 years and paid into SS and the last 10-15 years I paid out. It wouldn't have hurt me or anyone else making that much money to keep paying into it. Sure, there's people who want it all, but..........

Sat, 12/15/2012 - 20:23 | 3067478 Oldwood
Oldwood's picture

Social Securitywas suppose to pay out based on what you put in. Remember when they used to send you a statement on your contributions? Now we are talking about eliminating the earning caps while means testing the benefits, so those who contribute the most will most likely receive the least. So much for "fairness". Social Security should be changed to WELFARE and funded from general revenue. As a boomer I can accept that the money is gone and the $200k+ I have contributed counts for nothing, but end the big fat lie and call it what it is!

Sat, 12/15/2012 - 19:08 | 3067320 John_Coltrane
John_Coltrane's picture

Bruce,

Your plan is unnecessarily complicated and quite useless.  Simply require that the government operate only on available revenue, just as any normal person must do-no more debt backed money.  Cash flow only, no fractional reserve banking, gold backed currency.  Each "program" would only get funds available from taxes and fees.  Eliminate the TSA, DOE, Dept of Education, cut "defense" by 35-50%.  Charge fees necessary to repair critical infrastucture so those benefitting pay the costs (tolls on bridges, highways etc)  Of course, only those with real skills and abilities could survive in such a scenario-thus following the normal course of evolution.  We have so many worthless parasites especially in the FIRE sector of the economy such as approach is the only real way out of our nanny government disease.

Sat, 12/15/2012 - 19:22 | 3067353 Bruce Krasting
Bruce Krasting's picture

Well, this all sounds nice. I don't disagree with most of what you say.

This was about doing something in 17 days.

Do you think what you describe has one chance in a million of getting the necessary votes in two weeks?

So what's "wrong" with what you say is, it's not viable. Maybe some day. But not now.

Sat, 12/15/2012 - 20:54 | 3067550 El
El's picture

I'm not really seeing your plan as having one chance in a million of getting the necessary votes in two weeks, either, Bruce. Good try, though. I admire folks who try to offer solutions instead of just complaining about a situation and while I don't agree with the entirety of your plan, it is better than most of what has been suggested.

Sat, 12/15/2012 - 19:03 | 3067310 rufusbird
rufusbird's picture

New Zealand is a good example of a country that does not have a bloated government and it does not have a Inheritance Tax.

Sat, 12/15/2012 - 19:26 | 3067361 Bruce Krasting
Bruce Krasting's picture

New Zealand has a population of 4.4m, the same size as Kentucky.

Making comparisions between US and NZ is apples to oranges.

Sat, 12/15/2012 - 22:05 | 3067708 rufusbird
rufusbird's picture

Not so fast Bruce. You miss my point. If it is just size, Why does Finland with a population of just 5.4 million have a top inheritance tax rate of 20 to 32 percent? You call it comparing apples to oranges, well at least it is not comparing apples to hamburgers. It is what the Gov't does with their money and how big it wants to be. Otherwise, what is the difference between Finland and New Zealand? does not this same difference apply to the difference between the US and New Zealand?

Sun, 12/16/2012 - 09:17 | 3068353 Bruce Krasting
Bruce Krasting's picture

You make it sound that I like taxes. That I want in heritance taxes or income taxes. Not the case at all.

America is screwed. Either something is done to get things going in a proper direction, or just a few more years while the whole thing goes to hell.

So yes, taxes are necessary to get out of a hole. I will be one of those who pays higher taxes and gets smaller (no) benefits.

Sat, 12/15/2012 - 18:51 | 3067276 Walt D.
Walt D.'s picture

The problem is that the budget deficit, if Congress actually had a budget would still be well over $1 trillion a year. When you do a dynamic analysis, the hike in the tax rates, at best, will not result in any new net revenue. However, the actual deficit on a GAAP basis is several trillion more.

The problem is on the expenditure side of the balance sheet, not the revenue side.

BTW. You are not doing anyone a favor by giving them two years unemployment benefits - it renders them unemployable at the end of the two years. (Sixty Minutes did a piece on this.)

Sat, 12/15/2012 - 19:03 | 3067306 kaiserhoff
kaiserhoff's picture

Thanks Walt.  For those who are accounting challenged, we should remind people, when we can, that the US has a Micky Mouse CASH BASIS accounting system.

It's not just social security, medicare, and gubbermint pensions.  There are trillions in defence contracts, section 8 guarantees, maintenance agreements, etc. , out the wazoo, and no one anywhere, has a real handle on how much, unless Walt knows something I don't.                Gawdhelpus.

Sat, 12/15/2012 - 18:36 | 3067246 OneTinSoldier66
OneTinSoldier66's picture

"This is a different type of debt, it gets paid back."

 

ROFL, LMAO, LOL. You don't think I've been fooled enough yet to not see through this?!?!?!

Sat, 12/15/2012 - 18:42 | 3067243 John Law Lives
John Law Lives's picture

"8) Inheritance tax will be 40% over $4m."  -  Bruce Krasting

This is certainly an improvement over what is forthcoming if there is no compromise re. the "fiscal cliff" (i.e. 55% on estates over $1 million).  However, I have a better proposal:

Abolish the IMMORAL Federal Estate Tax.

Anyone who believes the federal government should be entitled to any portion of inherited wealth needs to get a clue.  This specific tax is nothing more than wealth confiscation by bureaucrats.  With such an onerous tax on the horizon, why should anyone be motivated to work hard and accrue wealth with the intention of passing it on to their own heirs if the government intends to confiscate such a large percentage.

100% FUBAR.

Sat, 12/15/2012 - 20:23 | 3067480 blunderdog
blunderdog's picture

     Abolish the IMMORAL Federal Estate Tax.

People don't really expect Paris Hilton to WORK, do they?  That wouldn't be fair.

Sat, 12/15/2012 - 22:03 | 3067709 nmewn
nmewn's picture

As long as the "stars" like Paris Hilton...lol...(and others just like her) keep paying their tribute to the King like they always do, they'll do just fine.

Everyone else, is pretty much fucked.

Now, about that Hollywood tax relief snuck through in the 1950's...time to re-institute it...20% GROSS...not net, just like before.

Let's listen to the little piggies squeal ;-)

Sun, 12/16/2012 - 03:18 | 3068213 blunderdog
blunderdog's picture

Yes, look, we've been over this many times: you're a hypocrite.  You're really not interested in limiting government power, you just want it used against the people you don't like.  I'm pretty sure we've all gotten this--you're a Republican partisan with a pretty specific set of demands to make of the big bad gummit, and you hang out here and pretend you're not to try to fit in.

Yes, yes, you're finally one of the cool kids now.  You've finally found your clique.  Congrats.  Now junk me again and I'll go back to ignoring you.

Sun, 12/16/2012 - 09:54 | 3068385 nmewn
nmewn's picture

Well no, on a host of levels.

"You're really not interested in limiting government power, you just want it used against the people you don't like."

Our first interaction was over professional liscensing by the state, which is nothing more than another tax as the government assumes no liability for what a professional does or doesn't do.

Our second running disagreement was over Bloombergs insane fixation on what people eat. You don't see a problem with...I do.

In both of these disagreements between us, you side with expanding or retaining entrenched government power. So who's the hypocrite here?

"Now junk me again and I'll go back to ignoring you."

lol...no, it wasn't me. As of now you have two junks up above us...a third will appear after I post this...which will prove it wasn't me because once a like or dislike is laid down it can only be changed to the opposite...the total stay's the same.

Sorry (not) that your ego was bruised...but as usual, you are hopelessly wrong.

Sun, 12/16/2012 - 17:04 | 3069208 blunderdog
blunderdog's picture

I don't recall what you claim was that first interaction, but if you're opposed to government requiring licensing for doctors, we're in agreement.

What you claim was the second "interaction" wasn't about what people eat, it was about Bloomberg's requirement that restaurants put calorie counts on menus.  You've never been honest about this, either--I don't think it's OK, but the fact that I have other concerns I deem more important appears to be too sophisticated an idea for you to grasp.

Now you say government should impose a 20% tax on "Hollywood," whoever that is.  Could you elaborate?  Because I'm sure I don't see any merit in the proposal, and I certainly don't see how it would help limit government power.

Nor do I see how demanding that the State drug-test more people would help limit government power.

Nor do I see how government outlawing medical procedures would help limit government power.  (I can't even understand how they COULD outlaw medical procedures if they don't know who the doctors are, but if you believe in magic or the honor system or something, fine.)

It seems clear enough: you want the government to punish the people you don't like when you can't be bothered to deal with them yourself.  Which is all well and good, but why would you keep lying about it?  This is a pseudonymous forum, it's not like your friends or family are likely to call you out about any of this stuff.  Why not be honest with us here?

Sun, 12/16/2012 - 19:45 | 3069500 nmewn
nmewn's picture

"I don't recall what you claim was that first interaction..."

Well of course you wouldn't. I didn't say JUST doctors, I said professionals...meaning all. The government can't be held liable for issuing the "license" so what's the point? It's simply another tax.

"What you claim was the second "interaction" wasn't about what people eat, it was about Bloomberg's requirement that restaurants put calorie counts on menus. You've never been honest about this, either--I don't think it's OK..."

No, it wasn't. It was Bloomberg telling private business people what they could and could not put in their own recipes...namely, salt, fat, sugar etc. to the point that city run homeless shelters are now turning away donations of perfectly fine food.

http://www.nypost.com/p/news/opinion/opedcolumnists/no_kugel_for_you_N4VuTrqavfOiApSHngxuMJ

It was you who are being less than candid by side stepping the issue of over-bearing government apparatchiks by saying and I quote "I have other concerns I deem more important". There is NOTHING MORE IMPORTANT than liberty.

A concept that seems to evade you, apparently, because it's too sophisticated for you to grasp.

But you just described me as a "Republican partisan". I've noticed this trend of late, you and others. New "marching orders"? I could have sworn Bloomberg ran and was elected as a republican. How could I have these views of Bloomberg being a fucking fascist if...I were partisan?

"Now you say government should impose a 20% tax on "Hollywood," whoever that is. Could you elaborate? Because I'm sure I don't see any merit in the proposal, and I certainly don't see how it would help limit government power."

I thought I was clear. YOU brought up Paris Hilton, I surmise because she is an heiress...you said in reply to another...

"Abolish the IMMORAL Federal Estate Tax.

People don't really expect Paris Hilton to WORK, do they? That wouldn't be fair."

Now, what is the context and implications of this statement here? To have government intercede and force her to work to make it fair?

Me...planting myself in YOUR shoes, I wrote...

"As long as the "stars" like Paris Hilton...lol...(and others just like her) keep paying their tribute to the King like they always do, they'll do just fine.

Everyone else, is pretty much fucked."

Which is an indictment (on my part) of a certain class of elites, media, directors, artists, actors, producers etc. who will (and have) sold their honor & integrity to what is called the "progressive" movement. But it's really just a government run protection racket isn't it?

And if the presumed object of your rant on Paris Hilton having wealth (through an inheritance)...not working and living among "the stars"...shouldn't the government be looking at preventing the accumulation of wealth to be passed down?...which you seem to want...so, I continued...

"Now, about that Hollywood tax relief snuck through in the 1950's...time to re-institute it...20% GROSS...not net, just like before.

Let's listen to the little piggies squeal ;-) "

And you did...little piggy...lol.

Tue, 12/18/2012 - 16:30 | 3075724 blunderdog
blunderdog's picture

I guess I get it, you were just cracking wise. 

Why didn't you just say you didn't want any special "Hollywood tax" and it was just a joke?  Sheesh, man, you must love to hear yourself type.  I'm amused you'd go to so much trouble, but OK.

On the other point:

Testing people for chemicals they may want to ingest and/or forcing women to carry unwanted pregnancies to term is "tyranny," as anyone who cares about liberty can see pretty easily.  That's what makes you a hypocrite.  Forcing individuals to adhere to confirm to arbitrary standards of behavior because of your personal preferences is an illegitimate use of power.

Sat, 12/15/2012 - 19:12 | 3067326 InvalidID
InvalidID's picture

 

 Being as the Boomer Generation ran up most of the current debt this nation has (for no real reason mind you) I suggest the estate tax isn't all bad. Let those that ran up the debt pay it back down on their way out.

Sat, 12/15/2012 - 19:42 | 3067401 nmewn
nmewn's picture

Because government knows how best to spend it?

Sun, 12/16/2012 - 00:34 | 3067971 InvalidID
InvalidID's picture

Nope. Thats how we got where we are. I suggest any increase in taxes and ESPECIALLY an estate tax should go directly towards paying down the debt. No borrowing, no investing it, just pay down the fucking debt.

Sun, 12/16/2012 - 09:39 | 3068369 nmewn
nmewn's picture

You're still trusting them to do as they say they'll do with a huge pile of money. They've already shown (for over a century) they will promise one thing, by law, then modify the law later.

They expect you/us to comply with the same law they have utter contempt for.

Sun, 12/16/2012 - 12:08 | 3068583 InvalidID
InvalidID's picture

 

 "They've" done it because "we've" demanded it. Why can't they solve the fiscal cliff issue? Because the voters are of two minds and noone wants the gravy train to stop. One side wants it in corperate welfare and military spending and the other side wants social spending. Between those two sides we're broke.

 

 So the real trick in soving any issue? Get the people to agree, or let the cliff come and 'fall' off it. Frankly, half the country has already gone over it anyway so it makes no difference.

Sat, 12/15/2012 - 18:57 | 3067289 nmewn
nmewn's picture

+1 John...immoral & unethical.

The government operates under a progressive income tax system, everything inherited was already taxed once at earning on the deceased. On top of that any assets bought with AFTER TAX dollars was taxed.

If he/she bought a car, they were taxed at point sale. If a house, taxed. Farm?...taxed. Boat?...taxed.

Sat, 12/15/2012 - 19:14 | 3067330 kaiserhoff
kaiserhoff's picture

nmewn ol' buddie.  I hear Blackrock is thowing around a billion or so in your neighborhood.

If I just happened to have a FEMA trailer parked behind my favorite titty bar..., not that I know anything about Tampa or titty bars... well y'know how those guys piss away money, and how bad they are at decimal points.  By all means, sell them your dog house for a million first, but if you run out of creative deals..., remember your buddies;)))))))))))).

Sat, 12/15/2012 - 19:39 | 3067391 nmewn
nmewn's picture

;-)

I'm a little bit north of there now but believe me, if I get the chance to "repatriate" some of the King's taxes, I will always share with my Merry Men...lol.

Sat, 12/15/2012 - 19:59 | 3067439 kaiserhoff
kaiserhoff's picture

One of my sisters has a place in Clear Water.  We shall all by Earls and Barons soon.

A short life, but a merry one.  Isn't that what the tramp said?  I can't complain.  I have a great life, but one more clear shot, at something with a fucking red star on it.....

Sat, 12/15/2012 - 20:41 | 3067513 nmewn
nmewn's picture

All red stars are fair game in my book...it's hunting season.

Sat, 12/15/2012 - 18:45 | 3067264 kaiserhoff
kaiserhoff's picture

Very well said.  I would only add that it hits those hardest who are poorly prepared, and can't quite believe the mostly decent country they remember from their youth would rape them like that.

I've helped tax clients with estate planning forever, but one case stands out.  The "boys" were finally being allowed to buy in to the family farming complex, and were thrilled about it.  The kicker?  The "boys" were 55 and 57.  You can't do that shit, or the government will steal it all. 

Sat, 12/15/2012 - 18:25 | 3067231 Stuck on Zero
Stuck on Zero's picture

Bruce:  Grow government to solve our problems?  Expand taxation?  Do nothing about foreign trade imbalances?  Have the government choose the infrastructure investments?  (Ever heard of bridges to nowhere?) Are you nuts or name the government position you're bucking for?

 

 

 

Sat, 12/15/2012 - 19:15 | 3067337 Bruce Krasting
Bruce Krasting's picture

I'm going for Secretary of Nothing.

Sat, 12/15/2012 - 18:11 | 3067198 Clowns on Acid
Clowns on Acid's picture

Bruce - Always appreciate your comments. This particular offering makes me think if you are speaking with tongue in cheek, awaiting the lemmings to jump in on the insignificant, granular details of the "raise taxes" debate.

You begin with a list of 3 points - the 1st two of which are "master of the obvious" statements and the 3rd - one not dissinliar to the others -

"It doesn't matter what the tax rate on the top 2% is, or if the retirement age is pushed out a few years. For the next ten-years, it will be grow-or-die. Washington has to focus on that side of the equation. As of today, all the focus is in the wrong direction."

I agree with "grow or die", but then you plod along a well worn path that is contradictory to your "grow or die" thesis, (presuming you mean real growth).

Cutting Fed Gov't spending and enforcing the illegal immigration laws is the only logical (mathematically and socio - economically) places to focus the conversation. Talking about future trends in Medicare and Social security and NOT placing the focus on these areas simply will lead to an ineffective (costly ) solution. I do not anticipate the likes of the present admin or Congress to focus on these.

Therefore all logical thinking particpants in the US economy will begin to take the fruits of their efforts underground or overseas, resulting in lower real growth in the US. Any grand Fed Gov't spending schemes (described with noble titles as "infrastructure projects) will produce nothing but more crony capitalism and fixed price Union led disaster.

The conversation regarding tax rates (although a 20% dependent variable in the equation) is merely Lame Stream Media cover for the imposition of the mob over the free man. Free men will prtect themselves in various ways.

Perhaps this article is your way of protecting yourself.    

Sat, 12/15/2012 - 21:28 | 3067626 Thisson
Thisson's picture

Growth isn't a solution.  We're lucky to grow GPD at 2% a year, and spending is growing much faster than that.  There is no way for the rate of growth to catch up to the rate the debts are piling up.  The only real solution will be to cut spending 80%, and since nobody will agree to it, it will be forced upon us because math doesn't care what we think of it.

Sat, 12/15/2012 - 18:09 | 3067193 Moe Howard
Moe Howard's picture

Moronic plan to save a moronic system. Please, just let it crash why waste time on "what if..."

Sat, 12/15/2012 - 17:30 | 3067113 Seal
Seal's picture

 

So Bruce, let's create a finance czar position in the Administration and you're IT. We'll have Treasury and the Fed report to you. 

Sat, 12/15/2012 - 17:58 | 3067174 geno-econ
geno-econ's picture

Sorry the Finance Czar  position is already filled by Ben Bernanke who not only controls monetary policy but fiscal policy as well by printing to maintain employment levels and protecting big banks.  The President is only a figurehead as far as economic policy is concerned and Congress is only concerned with re-election.  Bruce is the only one demonstrating wisdom

Sat, 12/15/2012 - 17:57 | 3067173 geno-econ
geno-econ's picture

Sorry the Finance Czar  position is already filled by Ben Bernanke who not only controls monetary policy but fiscal policy as well by printing to maintain employment levels and protecting big banks.  The President is only a figurehead as far as economic policy is concerned and Congress is only concerned with re-election.  Bruce is the only one demonstrating wisdom

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