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Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months


Apr 17, 2011 @ 11:37 AM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
Obama and the Democrats want to soak the so-called "rich." But other than appealing to his angry supporters who want to punish those who are successful and create the thriving economy that everyone benefits from, what would that accomplish? Even if the government took 100% of everything the "rich" earned, effectively destroying the economy, it wouldn't even fund their out of control spending for 5 months.

Obama's "soak the rich" campaign isn't about benefiting the country. It certainly isn't about benefiting lower income people or creating jobs. It's not an economic solution to anything. It's a pure political ploy to appeal to the angry ignorant people who support him. We don't need politics, we need solutions.

The facts:

This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money? According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It's not even yacht and Learjet money. All told, households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year.

The rest of the Article:

Eat the Rich
By Walter E. Williams (Archive) ยท Wednesday, April 13, 2011

I've often said that I wish there were some humane way to get rid of the rich. If you asked why, I'd answer that getting rid of the rich would save us from distraction by leftist hustlers promoting the politics of envy. Not having the rich to fret over might enable us to better focus our energies on what's in the best interest of the 99.99 percent of the rest of us. Let's look at some facts about the rich laid out by Bill Whittle citing statistics on his RealClearPolitics video "Eat the Rich."

This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money? According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It's not even yacht and Learjet money. All told, households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year.

How about corporate profits to fill the gap? Fortune 500 companies earn nearly $400 billion in profits. Since leftists think profits are little less than theft and greed, Congress might confiscate these ill-gotten gains so that they can be returned to their rightful owners. Taking corporate profits would keep the government running for another 40 days, but that along with confiscating all income above $250,000 would only get us to the end of June. Congress must search elsewhere.

According to Forbes 400, America has 400 billionaires with a combined net worth of $1.3 trillion. Congress could confiscate their stocks and bonds, and force them to sell their businesses, yachts, airplanes, mansions and jewelry. The problem is that after fleecing the rich of their income and net worth, and the Fortune 500 corporations of their profits, it would only get us to mid-August. The fact of the matter is there are not enough rich people to come anywhere close to satisfying Congress' voracious spending appetite. They're going to have to go after the non-rich.

But let's stick with the rich and ask a few questions. Politicians, news media people and leftists in general entertain what economists call a zero elasticity view of the world. That's just fancy economic jargon for a view that government can impose a tax and people will behave after the tax just as they behaved before the tax, and the only change is more government revenue. One example of that vision, at the state and local levels of government, is the disappointing results of confiscatory tobacco taxes. Confiscatory tobacco taxes have often led to less state and local revenue because those taxes encouraged smuggling.

Similarly, when government taxes profits, corporations report fewer profits and greater costs. When individuals face higher income taxes, they report less income, buy tax shelters and hide their money. It's not just rich people who try to avoid taxes, but all of us -- liberals, conservatives and libertarians.

What's the evidence? Federal tax collections have been between 15 and 20 percent of the nation's Gross Domestic Product every year since 1960. However, between 1960 and today, the top marginal tax rate has varied between 91 percent and 35 percent. That means whether taxes are high or low, people make adjustments in their economic behavior so as to keep the government tax take at 15 to 20 percent of the GDP. Differences in tax rates have a far greater impact on economic growth than federal revenues.

Continued below...

[Edited on 4/17/2011 11:39 AM
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Apr 17, 2011 @ 11:39 AM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
So far as Congress' ability to prey on the rich, we must keep in mind that rich people didn't become rich by being stupid.

http://patriotpost.us/opinion/walter-e-williams/2011/04/13/eat-the-rich/

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Apr 17, 2011 @ 11:49 AM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
everrett


Posts: 468
This is a very misleading article. It focuses on the revenue of the top .1% of the US. Of course that group cannot bear the burden of the cost to run the entire US government.

The tax rate that we currently have is and always has been a temporary thing. The tax rate that we will go back to will be the tax rate of the most prosperous time in the last 20 years in the US. It is about a 2% increase and would do as much for stabilizing the economy as all the cuts the gov't can reasonably make in the short term.

As I have stated elsewhere, the actual amount of taxes that this group pays to the gov't after itemized deductions is often a lower tax rate than people making $50k per year.

The funniest thing is that stabilizing the gov't is good for the lower and middle class, which gives a stronger consumer base to wealthy business people. It leads to more money in the end for true capitalist.
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Apr 17, 2011 @ 11:59 AM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
This is a very misleading article. It focuses on the revenue of the top .1% of the US.

The article is referring to the top 2% of US households:

According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above.

And most significantly, they are the "rich" ones that Obama is proposing to increase tax rates on. An ineffective way to raise taxes, but a quite effective way to appeal to angry people who are more interested in punishing success than creating a thriving economy.
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Apr 17, 2011 @ 12:11 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
everrett


Posts: 468
The article is referring to the top 2% of US households:

That is misleading because the article also talks about corporate revenue. The fortune 500 generates over 9 trillion a year. The 1.4 trillion in revenue takes into account a lot of the tax loopholes that need to be closed that allow a large corporation to claim smaller net revenues.

I have no interest in punishing anyone. With some real budget tightening it makes a balanced budget something that can be reached in the next 2years. Without it even drastic cuts in spending still leaves larger deficits than I want to see. Also letting the bush era tax cuts expire is not exactly a tax increase.
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Apr 17, 2011 @ 12:16 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
Also letting the bush era tax cuts expire is not exactly a tax increase.

That's Orwellian liberal speak.

What are the tax rates now? Would they be higher or lower after Obama passes his proposal?

higher = increase

Does it even need to be explained?
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Apr 17, 2011 @ 12:19 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
everrett


Posts: 468
He could let them expire. The cuts are and always have been temporary.

... and dont refer to my opinions as liberal again..
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Apr 17, 2011 @ 12:20 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
Why not? I see them as liberal, so what else should I refer to them as?
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Apr 17, 2011 @ 12:22 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
everrett


Posts: 468
You seem to think anything that does not fall into your far far right conservative world of conspiracy must be liberal. Your definition is flawed because I am not anything close to liberal
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Apr 17, 2011 @ 12:28 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
So now you want to write my posts for me and tell me what to say? Sounds like something liberals do to me.

But I'll tell you what. You are one of the very few people I often disagree with here that I also respect everrett. You clearly have a keen sense of logic and a good grasp of the facts albeit your conclusions often seem wrong to me.

But I respect your opinion nonetheless.

So I will refrain from calling you a liberal.
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Apr 17, 2011 @ 12:40 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
everrett


Posts: 468
Yeah, Feel about the same D.

It just gets annoying getting labeled sometimes. If it makes you feel better, liberals think I am a far right conservative.

I just like to look at things objectively, clear away the clutter, and make my own decisions.
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Apr 17, 2011 @ 1:30 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
Heaveninawildflower


Posts: 22,713
creating a thriving economy.

Was our economy dwindling back in 1994, when incomes over $250K were taxed at 39.6%? Inflation was 2.7% and unemployment was 6.9% and a gallon of gas was $1.11.

Yep, that taxing the top income bracket another 4.6% really wreaked havoc on the economy. Nobody's even suggesting that we go back to the Eisenhower years, when it was 91% for those making over 400K. The thing that will help this economy most is to get people working again, which means more people spending money. It's certainly not happening at 35% - those small business jobs supposedly funded by the decreased taxes on the top 2% of income earners seem to be pretty scarce indeed.
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Apr 17, 2011 @ 1:46 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
The argument about taxes misses the whole point.

If you had a teenage kid who took your credit card and went on a reckless shopping spree would you give them more money? Even one penny?

Even if raising taxes on the rich could make some kind of significant difference in revenues (which it clearly can't), the way to deal with out of control government spending isn't to find new ways to pay for it. It's to cut the spending.

There can never be enough money for the liberals in Washington. For every extra dollar you give them, they will spend 10. How much more proof of that do we need than a 14 trillion dollar debt and over 100 trillion dollars in unfunded liabilities? And that is just the federal level. It doesn't even include the liabilities and debt of the states and local governments.

We don't need new taxes, we need to cut off Washington's credit card and gravy train and force them to act fiscally responsible.

[Edited on 4/17/2011 1:58 PM]
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Apr 17, 2011 @ 2:01 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
Heaveninawildflower


Posts: 22,713
For me, it's all about getting this economy moving again...the poor, both working and not working, are having to pull in their belts and make sacrifices - I see no problem with the not so poor doing some of that too. It's pretty thin gravy on that gravy train the people who are losing their jobs and homes are supposedly on. I've read that only about 3% of the reported incomes over 250K are actually small businesses - I'm surprised it's even that high to tell the truth. Even the self-employed independent contractors that I know have incorporated themselves to take advantage of the minimal corporate taxes here in AZ - I'm not sure how we compare to the rest of the country in that area but if I were a small business I'd certainly keep up on the best tax strategies available to me.

I've been in favor of a balanced budget for a lot of years, but that would also have to include scaling back in all areas, including a bloated military. Right now entitlements make up a pretty huge chunk, but speaking for myself, I know I've put enough into Social Security over the years that it will be a long, long time before I'm on 'the dole' as opposed to withdrawing from an account that I funded myself. SS is by far the biggest entitlement program, and most of those benefits were earned.
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Apr 17, 2011 @ 2:05 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
You can't get the economy "moving again" by sapping resources from the private sector and borrowing your way to prosperity. That is a recipe for economic collapse. Do we have to have that collapse before liberals will finally be convinced?

Taking money out of the private sector through taxes so that the government can spend it in an attempt to boost the economy is like taking a bucket of water from one end of the pool and pouring it in the other end in an effort to fill up the pool.

What creates economic growth is INCENTIVE for private sector innovators to create more wealth. Taxing them more is NOT an incentive.
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Apr 17, 2011 @ 2:10 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
Heaveninawildflower


Posts: 22,713
Well, yes you can. Money's like manure, spreading it around actually helps it to grow. As I said, the lower tax rates aren't doing a thing to spur that growth, pretty much indicating that it's not being spread around. If profit's the biggest incentive, aren't we incentivizing them to create more jobs in China, etc., rather than here?

Funny thing is, even the rich are apparently feeling some tax reform's in order:

United for a Fair Economy
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Apr 17, 2011 @ 2:21 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
Fortunately, I think Obama's tax increases don't have a chance of passing. I think reason will prevail over politics on that front. 2012 is an election year. Obama is only proposing new taxes as a way to rally his radical left supporters. Even he knows its a terrible idea.

But it's going to take a monumental battle to get Washington to take cutting spending seriously. If not for the emergence of the Tea Party, and the grass roots demand that Washington live within its means, it would still be Obamanomics as usual until the country suffered an economic collapse that would make the current recession look like the good old days.

The Tea Party has had an enormous impact. So much so that even Obama, the Spender in Chief, is forced to go along with them and say that spending needs to be cut. He will try to avoid actually doing it with smoke and mirrors tricks, but in the end we can only hope he will be dragged kicking and screaming into it by the weight of the will of the people.
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Apr 17, 2011 @ 2:24 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
Dillweed


Posts: 3,753
sounds like someone's kicking and screaming already.
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Apr 17, 2011 @ 2:38 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
Josuha


Posts: 1,498
Everybody is arguing essentionally about typhoid and smallpox..

I'll say this as simple as I can.

It can't be fixed.

IT....CAN'T....BE....FIXED.

It's like arguing what is best best way to fix a wreck..
It wrecked..gone..kaput.

It is inherently bad to begin with.

All the person is doing is sinking good money after bad.

The 'system' we have now is not 'capitalism'.

It is a world economy practicing economically..'facism'.

The marriage of the 'state' and 'corporations'.

What we are seeing essentionally, are two political parties arguing over a 'broken system', that they instituted slowly and now, it does'nt work.

And, as long as they sink money into this broken system, people are going to get more of the same.

The only way, is to return to the system we had..

That means trashing any treaties for the return of our industry, fabrication etc.

Or...it's just sinking money into other economies while they grow stronger..we grow weaker.

And..it will get much, much worse.





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Apr 17, 2011 @ 2:43 PM Taxing The "Rich" @ 100% Would Not Even Run The Federal Government For 5 Months    
DiamondRain


Posts: 12,256
Lucky you simplified it so we mere mortals could understand it oh enlightened one.

It's nice to know there is no more need for debate or government since its all useless anyway. Sure saves a lot of time and effort that I could spend scuba diving instead.

Whewww.... that takes a load off.
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