[BartSimpson]

xerxes xerxes:

During the Eisenhower years, tax rates for top income earners was 91% and as far as I know, there weren't any collective farms or toothbrush shortages because of it.

And the period of 1957 to 1962 was one marked by stagnated economic growth and what pulled the USA out of it?

Yep, that's right.

That evil, right wing fascist John F. Kennedy cut taxes on top wage earners.

[Thanos]

Federal tax rates are lower than they've been since the Reagan era. Yet the American economy keeps getting worse on a daily basis it seems. It's long past due to put an end to the low-tax myth because clearly it does not apply at all to the situation at hand.

[bootlegga]

CommanderSock CommanderSock:

bootlegga bootlegga:

Making a billionaire live on $200 million per year instead of $300 million per year (example tax rate of 33%) really doesn't affect them all that much, but when you take $5,000 from someone earning $15,000, you seriously affect their lifestyle. Even taking $25,000 from someone earning $75,000 affects them far more than it does the billionaire in the example above.

Their thinking goes, "they are job creators", they will take that extra 100 million we would have taxed them, and re-invest it in more job creating activites.

However, in most cases it's total bull, most rich hoard their money or swirl it around the ETF system. When does in investment banker's bonus of 30m, plus 100m only taxed at 15% (due to capital gains tax) ever create a job for another person? Maybe a maid here, a gardener there. But they're not exactly pumping the money back in the industrial/service part of the economy where the bulk of the jobs are. This is where I'm puzzled by the thinking of "job creators". They're not.

We were creating far more jobs when there wasn't a massive concern over dividend payments, when money was actually re-invested, not pumped into dividends of $0.16 to the dollar, something only major investors (holders of millions worth of equity) can actually see a big profit on.

There was a time when many rich in the western world were industrialists (and many still are, Steve Jobs, Bill Gates, Carlos Slim, etc), but most of the paper bankers aren't creating jobs, on the contrary, they're destroying them.

My thoughts exactly.

[Thanos]

Is it really anti-capitalist to protest against a financial sector that wasn't helped by the principles of the (alleged) free market but instead was saved by the injection of trillions of tax-payer dollars? Seriously, these Wall Street fuckers are the biggest subsidy-sucks on the entire planet. So why is it so wrong to expect them to consider the public interest first, for a change, when it's the public that always has to rescue them after one of their greed-fueled "bubbles" goes pop?

[BartSimpson]

Thanos Thanos:

Federal tax rates are lower than they've been since the Reagan era. Yet the American economy keeps getting worse on a daily basis it seems. It's long past due to put an end to the low-tax myth because clearly it does not apply at all to the situation at hand.

Look, even if I agreed with you I'd still say that you don't raise taxes in a downward trending economy. It just makes things worse. When things are on the uptick you can raise taxes and it takes away from growth and has less of a negative effect.

[BartSimpson]

Thanos Thanos:

Is it really anti-capitalist to protest against a financial sector that wasn't helped by the principles of the (alleged) free market but instead was saved by the injection of trillions of tax-payer dollars? Seriously, these Wall Street fuckers are the biggest subsidy-sucks on the entire planet. So why is it so wrong to expect them to consider the public interest first, for a change, when it's the public that always has to rescue them after one of their greed-fueled "bubbles" goes pop?

I wish it were all as simple as that.

This gorgeous building (which cost about $480 million) is the home of the most powerful pension fund in the world.

0:

File comment: CalPERS

CalPers.JPG [ 194.93 KiB | Viewed 116 times ]

CalPERS is the pension manager for the employees of the State of California and almost all municipalities in the state (about 1 million people are enrolled). They're the ones who got the Business Round Table to redefine the mission of a CEO back in 1996. See, it used to be that a CEO's job was to grow market share and grow their company. Now (thanks to CalPERS) their mission is to maximize profits for their shareholders - and CalPERS is the 800 pound gorilla amongst investors.

It's kind of ironic that I'm now invested in CalPERS because their demands upon Intel directly led to my being laid off from that job in August of 2005.

So there's that.

Then you layer in the Clinton Department of Justice suing the banks for 'redlining' - which was a practice of not lending on properties in distressed areas or lending to people with sketchy credit histories for the simple reason that it was bad investment strategy. The Clintonistas forced the banks to come up with loans in underserved areas (ghettos) and then the banks were saddled with mortgage portfolios that could not be resold on the secondary market.

But wait! The investment funds came along and saw the yields on those sub-prime loans and suddenly poured billions into those mortgages that were securitized and bundled into tranches. The investment funds were seeing 8% to 12% returns and then they turned around and demanded that Wall Street stocks perform at least as well.

The bankers, meanwhile, raked in amazing profits between the loans and the investments and they abandoned their previous conservative nature with money to dive headlong into this new market.

The US government ended up being the secondary market for sub-prime loans by requiring Fannie-Mae and Freddie-Mac to buy up the securitized sub-prime loans and the money for those loans came from the sale of Treasuries to places like China who had piles of US dollars that needed to go somewhere.

Then you get to the summer of 2008.

The US was putting pressure on China to let their currency float on the world market to help deal with the trade imbalance and the Chinese didn't like that.

In their anti-capitalist and Middle Kingdom zeal they dumped 10% of their Treasuries on the market with the intent of teaching the USA a lesson.

Funny thing, the initial collapse of Treasuries hurt China the most by eroding the value of the remaining 90% of their holdings.

And the rest is history.

But, yeah, blame it on entrepreneurs (not bankers and union pensions funds) and demand that they pay more taxes when each year sees them earning less and then they'll end up laying off employees to cover their losses.

So millions more people will be unemployed all in the name of fairness.

Brilliant.

[Canajazz]

DanSC, look at what it has brought us to? Can you say that hope prevails in political discourse when all participants are looking for one thing, the advancement of their personal views about how we should live? I'm tired of letting the super rich dictate to our elected officials how I should live. Aren't you?

[Proculation]

I think Herman Cain is a little too 'hardcore' but I love his 9-9-9 policy. 9% VAT, 9% income taxes, 9% corporate taxes. No loopholes created by politicians to tame the lobbyists. Those are one of the biggest problem in the tax system of most states, specifically the USA.

[xerxes]

BartSimpson BartSimpson:

Thanos Thanos:

Federal tax rates are lower than they've been since the Reagan era. Yet the American economy keeps getting worse on a daily basis it seems. It's long past due to put an end to the low-tax myth because clearly it does not apply at all to the situation at hand.

Look, even if I agreed with you I'd still say that you don't raise taxes in a downward trending economy. It just makes things worse. When things are on the uptick you can raise taxes and it takes away from growth and has less of a negative effect.

I'll agree with you to a point. You don't raise taxes in a recession, at least, not accross the board. Raising taxes on the working poor and what's left of the middle class is obviously stupid.

But saying the rich can't afford to pay a little bit more is also stupid. You're telling us that the Warren Buffets and Donald Trumps of the US can't pay a little bit more? Or that if they do they're all going to go Galt, take all their money and build Rapture? Please.

Like Thanos said, taxes have been trending down in the US ever since Reagan and the economic conditions for the middle class and working poor have trended down just as equally. Taxes have been low for corporate America for a good while now and the so-called "job-creators" still haven't been motivated. I doubt lowering them more will do the trick.

[Proculation]

@xerxes: and what about everyone pay the same taxes ? It's relative to the income.

In 2009, 47% of Americans didn't pay a dime of federal taxes. That means that 47% of Americans received benefits from the federal govt. but didn't pay anything for those 'benefits'.

If I was one of those people, my rational conclusion would be: : "I don't pay anything and I have all the benefits, why not more?"

[BeaverFever]

martin14 martin14:

Ask anyone who gets paid by the hour. The smart ones know exactly the level
of income for a week or two when they jump tax brackets.

Thats just because they don't understand the tax system and circulate these myths. The higher tax rate only applies to those dollars that are above the threshold, not your entire income.

Example: the federal tax rate is 15% on the first $41,544 of your income and then it increases to 22% on the next amount, and so on.

So if you earned $41,600, only the $56 that is over the limit above is taxed at 22% and the rest of your income is taxed at the 15%. You always realize a profit...there is no point at which the progressive tax cancels out your increased earnings.

This is also why progressive taxes aren't discriminatory or punitive...the first $41,544 of salary that a millionaire earns is taxed at the same rate as the first $41,544 that you earn.

Learn More Here

[sandorski]

Proculation Proculation:

@xerxes: and what about everyone pay the same taxes ? It's relative to the income.

In 2009, 47% of Americans didn't pay a dime of federal taxes. That means that 47% of Americans received benefits from the federal govt. but didn't pay anything for those 'benefits'.

If I was one of those people, my rational conclusion would be: : "I don't pay anything and I have all the benefits, why not more?"

They Pay other Taxes(Payroll)which makes up approx the same amount of the Federal Budget as Income Taxes do. This whole line of argument is stupid.

[Bruce_the_vii]

You know taxes are complicated, the economics of them even more so and in these times of the need to raise government revenues doubly do. However I don't think the pet lines that make it to CKA posts are going to be that brilliant. Sorry, I just take all these lines with a grain of salt.

[Bruce_the_vii]

One drinking buddy of mine did point out the America really has the same problem as Greece - people don't pay their taxes. In America it's loop holes but the effect is the same.

[martin14]

Bruce_the_vii Bruce_the_vii:

One drinking buddy of mine did point out the America really has the same problem as Greece - people don't pay their taxes. In America it's loop holes but the effect is the same.

This part is quite true at least.

For all who bleat, "more tax for the rich, more tax for the rich",

you might want to read that quoted part again.