Families with incomes over $250,000 and individuals earning over $200,000 are the stumbling block for an extension of the Bush-era tax cuts, set to expire at the end of this year. LV Congressman Charlie Dent, like most Republicans, want them extended for everyone, including those with higher incomes. As he told The Reading Eagle, these are primarily small business owners - "the very businesses Americans will rely on to create jobs and lead our economic recovery."On Friday, I posted Dent's position on this hot-button topic. I took no position myself because, quite frankly, I have no position. It is a complicated question in which flamethrowing, one of my specialties, is no help. But I later read, in Jeff Pooley's supposed "Dent Watch," that I "implicitly endorsed" a "slimy press statement." The good doctor goes on to claim that 98% of small businesses earn less than $200/250 thousand. It's actually 98% of all Americans who earn less than that figure. I am unable to find any clear and unbiased data telling me the percentage of small businesses under that threshold.
According to Moody's Analytics, denying everyone an extension will reduce the deficit significantly, but will also hurt economic growth and send the jobless rate soaring. Giving everyone a permanent tax cut will be great for economic growth and it will help the jobless rate, at least a little. But the deficit will soar by $4 trillion over the next decade.
There really is no real easy answer. But Jeff's polemnic just fans the flames of partisan rancor.
In addition to Jeff, a regular commenter here, called Publius, also disagrees with Dent's position on extending tax cuts for everyone. But instead of the usual name-calling, Publius gives the perspective of someone who happens to be a small business owner.
"Bernie,
"It is statements like this one from Mr. Dent that have led me to believe that he is a very good politician, but a very unfortunate choice as my Congressional Representative. Let me explain.
"I am a small businessperson, one of the people that Mr. Dent claims to be representing with his "no" vote. I have never worked for someone else. I started my first business after dropping out of grad school in 1992, sold that business in 2001, and after taking a break, have been in my current business since 2003.
"As a business owner I have never made a decision on capital expenditures, hiring, expanding, or anything else based on what my income tax rate would be. In fact, I am incentivized to reinvest in my business with a 15 or 20% capital gains rate. In the past year we have taken more space from our landlord to expand the business, and are actively looking to hire 4-6 people in the next twelve months.
"The more I invest in and grow my business, the greater the value of that business. That value is unlocked at the time of sale.
"By extending the tax cuts to everyone who makes $250k+/yr., we would be giving an extended tax cut professional athletes, overpaid CEOs of public corporations, hedge fund managers, etc. that would only add to the deficit and would not produce a job, or grow a small business.
"If Mr. Dent truly wants to help the small businesspeople of this country, here is what makes sense to this lifelong entrepreneur:
"1. Allow me to expense all my capital expenditures the year I make the investment, not over 5-30 years.
"2. Single-payer health insurance system. Currently the USA is the laughing-stock in every developed nation. "The Healing of America" by T.R. Reid lays out all of the reasons why we need this, as well as his experience in a number of different systems.
"3. Taxpayer funded elections. Elections are all about money and not the people who Representatives /Senators actually represent. I have a right to free speech, but my business does not. As it is now, Congresspeople are more worried about raising enough money to funds their next election than they are about the needs of the people.
"4. Back the Debt Commission's Plan. It is very reasonable and well thought out. The fact that both Dems. and Repubs. hate it makes me believe that it is the right plan to get us moving in the right direction.
"With all due respect, Mr. Dent is a professional politician who has never grown a business, taken a business risk, and receives his health insurance and pension benefits off the backs of the taxpayers. As a politician he is non-productive, yet he makes as much or more than I do, lives is a larger house, and has a better benefit package than I do. In other words, he doesn't live in the real world that I do, and his political statement and clueless reasoning deepen my beliefs.
"The reason I have what I have is a result of hard work AND the fact that I live in the USA. The taxes that I pay are the cost of keeping this system.
"Publius"
dear publius, i don't know if you own a small business or not, or are you just another commenter dressing himself up in "expertise", i suspect the latter. although businesses are sold for one reason or another, besides a construction contractor, i've never known someone who builds something or a business just to sell, to "unlock the value"
ReplyDeleteIf we are the laughing stock of the world for our healthcare, then why do they send everyone here who needs the very latest innovations in medicine? Why are the vast majority of the "doctors without borders" Americans, and why do we have the highest cancer survivals rates in the world?
ReplyDelete"The good doctor goes on to claim that 98% of small businesses earn less than $200/250 thousand. It's actually 98% of all Americans who earn less than that figure."
ReplyDeleteSo actually, the "good doctor" is just blatantly making shit up?
So in other words, the "good doctor" makes an unfactual statement to support his political argument.
So basically shouldn't the "good doctor" really be called the "bad doctor" or the "lying doctor?"
Yet these people use most of the commons. Why should I pay? If you think you can give me a reason your
ReplyDeletea little twisted in mental function - so let me state this in advance.
Wait a minute Bernie-
ReplyDeleteIsn't this Pooley guy a Muhlenberg College professor or as they say at lockup, you got the wrong guy.
Anonymous said...
ReplyDeleteIf we are the laughing stock of the world for our healthcare, then why do they send everyone here who needs the very latest innovations in medicine? Why are the vast majority of the "doctors without borders" Americans, and why do we have the highest cancer survivals rates in the world?
3:31 AM
Listening to the radio Saturday Night, about 33% of all general practitioners, according to the commentator, will retire in the next few years because of new health care laws. Who's going to take their place?
"i've never known someone who builds something or a business just to sell, to "unlock the value"
ReplyDeletethen you're a poser. this is a fairly common small business strategy.
anon 6:44, how many small businesses have you started to sell? forget that, just name one "started to sell" in allentown? how bernie tolerates little anonymous puff pigeons, like you, is admirable.
ReplyDeleteBernie,
ReplyDeleteSome thoughts.
I do not know if you allow links, but I offer this from the Washington Post as interesting. When the IRS changed Subchapter S rules to allow 100 owners instead of 35, it opened up some interesting tax strategies.
http://tinyurl.com/2wgvyz7
It's only one article, but the Post is a reasonably reputable source.
Also, since most research shows that 95% of all truly small businesses (not the pseudo small) fail within 5 to 10 years, I do doubt that many owners make more than several hundred thousand dollars.
The Federal Government defines small businesses as under 500 employees. Many people, when they hear "small business," think 50 employees.
In the years, that I consulted owners (over a hundred of them), only one person made that kind of money, and he had the business handed him by his father-in-law.
Most made about $90,000 in today's dollars. I typically was focused on how just to keep that salary, given competition.
Actually, CBO says extending the tax cuts will hurt growth and incomes. Republicans have claimed not extending tax cuts for rich people will hurt demand - an unmistakably Keynesian analysis that implicitly endorses the case for more stimulus = but the fact is rich people will mostly save that money just like they're hoarding money now. The (temporary) tax cuts we need are for people who will go out and spend the money immediately. That's why food stamps and unemployment benefits are such effective stimulus.
ReplyDeleteSo how many jobs did these tax cuts create over the last seven years?
ReplyDelete"Isn't this Pooley guy a Muhlenberg College professor"
ReplyDeleteYes, Jeff Pooley is a professor at Muhlenberg. I called him doctor because he is one,although it's a Ph. D., not an M.D. I do not think he purposely would mislead anyone, but that 98% figure refers to people earning <$200/250, not businesses.
Michael Donovan, who consulted with businesses believes most of these mom-and-pops are somewhere around $90k, and he may very well be right.
Jon Geeting, In ten years, tax cuts would add 3 trillion to the deficit, and yes, at some point, that would start hurting GDP and jobs.
ReplyDeleteLooking at everything together, I'm beginning to think that the best answer would be a temporary extension ... for everyone. Two years.
MM, I do not know Publius, who is anonymous. When I asked if I could use his comment, he took the trouble to re-write and send my way. He has been commenting on my blog for ears and I believe he is sincere. But I will also be the first to admit I lack your business acumen, or his.
ReplyDeleteTo Mike Molovinsky @ 3:24am,
ReplyDeleteThis is Publius. Sorry to disappoint you but I am indeed a small businessperson. I opened my first business when I was in my 20s and I went into it with a 10 year plan to build it, grow it to a certain point, and move on. The business I am in currently I will likely stay in for a long, long time.
When you own a business you grow your wealth in two ways. The first is what I pay myself, and the other is growing my investment. By growing my investment (read: business) my cash flow grows and the value of my investment grows as well.
As a side note, I also believe that if I pay my people well and treat them fairly, I get better and more dedicated employees who are happy. Human capital is important in all businesses, right down to the cleaning people. In the end, the people you employ are a part of the value of a business entity.
Mark Cuban, currently the owner of the Dallas Mavericks and not a local, is the perfect example of someone who built a business specifically to sell it. In fact, he is one of the few from the tech boom years of the 1990s who cashed out toward the top of the market.
Locally, businesses are sold all the time, either by people cashing out for one reason or another, or because the sale was the plan from the get go. There is nothing immoral about building/growing a business to sell it for profit. Seems pretty American to me.
Publius
bernie, i don't claim to have that much business acumen, but i do have verifiable experience in a couple things. i have known many people who had small businesses, and a few who sold them because of retirement or health or some such thing. i have also known many successful small businesses which couldn't be sold. it's not easy to sell a small business. most such owners devoted most of their life to it; so for some anonymous to say many small businesses are started to sell, strikes me as a windbag. i'm amazed how many experts who comment here don't want credit, by their name, for their expertise.
ReplyDeleteMM, as somebody who claims not to have a great deal of business acumen, you sure do blow a lot of wind in your claims. Publius offers great commentary on how he/she approaches business... as an investment. If more capitalists would view their business as an investment (meaning that it is driven toward the future) and not as an opportunity to get rich quick or screw somebody else out of money (yeah, I'm talking about the financial service industry's track record), our economy would be far stronger.
ReplyDeleteanon 10:10, publius didn't respond to my earlier request to name one small business sold in allentown. for several years, business brokers of the past, haven't even bothered to advertise. from his comments, when publius does attempt to sell his current small business, he will not be able to include the real estate, or his expertise. i will however concede that he probably knows much more than you, good day, michael molovinsky
ReplyDelete"publius didn't respond to my earlier request to name one small business sold in allentown."
ReplyDeleteYou asked a question that has NOTHING to do with Publius' comments about Charlie Dent's work as his Congressmen. You are doing what you often accuse bernie of doing through lines of logic that don't line up. Remember, he was talking about Dent's line of reasoning on FEDERAL tax policy. If he was offering commentary about local tax policy or the mayor's work, your question would warrant a response.
But seriously, have a great day.
You're right, Bernie, that posting doesn't imply endorsement. So I'm sorry about that.
ReplyDeleteBut I stand by the rest of the post, and in particular the 98% of small businesses claim. Yes, it's 98% of taxpayers period who earn under $200k/250k. It's an even higher percentage of taxpayers reporting small business income--over 98% are under the $200k/250k. Here's William G. Gale, the respected director of the nonpartisan Urban-Brookings Tax Policy Center:
The small business "claim is misleading. If, as proposed, the Bush tax cuts are allowed to expire for the highest earners, the vast majority of small businesses will be unaffected. Less than 2 percent of tax returns reporting small-business income are filed by taxpayers in the top two income brackets -- individuals earning more than about $170,000 a year and families earning more than about $210,000 a year."
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/30/AR2010073002671.html
I don't mean to be obnoxious, but an update to reflect this fact would seem warranted.
Ours is not a revenue problem. Ours is a spending problem.
ReplyDeleteWhat one does with one's legally operated business is nobody's business.
This is not about extending tax cuts. It's about dramatically raising tax rates that have stood for ten years.
Democrats have long seen this as the best way to get more taxes from the biggest source of assets in the country: the middle class. The middle class holds the majority of assets in the country and doesn't have to assert its size to get politicians to fall all over it for votes.
Democrats rabidly covet this money because they can't buy another thing until they pay for what they've already spent on health care. They believe that extending all tax cuts undercuts enactment of health care legislation. They are correct.
Mike, Publius' point on people selling businesses is valid, I've seen it many times.
ReplyDeleteJust in Emmaus, these businesses have sold in the past few years - Perk on Main, Cottage, Wentz Hardware, Iobst Travel, and Emmaus Bakery.
I would not use business sales in Allentown as a bellweather - frankly you'd have to be an idiot to start or buy a business there. Allentown offers nothing of interest in return for the risk.
The Banker
Jeff,
ReplyDeleteI will look over your link tonight when I have a bit more time, and if you are right, I will happily acknowledge that. But during the election cycle, the claim eas that 98% of Americansd are under the $200/250k threshold. Now it is small businesses. Both of these statements can't be right. I spent an hour looking for an answer to tell me what %age of businesses are under this threshold. If the WaPo article answerrs that question, I will gladly admit it. We can have different opinions but should try to determine the facts.
As for your refusal to back away from the unnecessary rancor, that's why nothing gets done. You portray people who disagree with you as evil, and the other side does the same thing.
banker, i know businesses get sold. none of the businesses you mentioned were started with the intent to sell, which was my point. i will agree with publius that dent's position was the major point. i doubt that most small business owners would disagree with dent. publius's remark about depreciation, etc., like my remarks, are not the topic, the topic is the extension of the tax cuts for all. i believe the job makers are in the 170-250 batch.
ReplyDeleteActually Mike, 2 were - Cottage and Perk on Main. They were both started by Pam Parker and were both flipped within a year or two of opening. That's her MO and it works - Emmaus has two nice businesses in place because of it.
ReplyDeleteYou know me, so while I'm anon here you now my background - no kidding, I know dozens of small businesses that were started with the express intent of flipping. You can start with every community bank that opened in this area in the last 20 years - their business plans were built on being flipped.
Bernie, Thanks for looking into it. I agree in general about rancor, but for a very few issues--income and wealth inequality in particular--strong language is warranted. The legacy of the last 40 years, in which the top 1 % have used politics to further enrich themselves while the rest of the country stagnates, makes this a special case. Especially when yet-still-more wealth transfer to the already-rich is clothed in the language of public interest.
ReplyDeleteI'll quote Nicholas Kristof in a recent NYT piece: "The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.
“C.E.O.’s of the largest American companies earned an average of 42 times as much as the average worker in 1980, but 531 times as much in 2001. Perhaps the most astounding statistic is this: From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.”
Hence the rancor.
Mike Molovinsky @ 3:48pm,
ReplyDeleteNo Mike, my comments on depreciation, etc. is exactly the point. Reinstating tax cuts - remember these were/are temporary tax cuts we are talking about - are being sold by Mr. Dent and the Republicans as necessary so that small business people will grow thair businesses/hire more people, etc.
What I am saying is that this is just wrong, and I give a number of solutions to the problems that I believe would work. Maybe you do not agree, but I hear very few voices out there with any realistic proposals for moving our country forward.
It is easy to be a critic and much harder to come up with the hard answers. And it seems obvious to met that Mr. Dent is just parroting the words of his political party, and not thinking for himself.
Now that we have heard some of your criticisms, why don't you give us some solutions?
Publius
28 comments and no one mentioned that the deficit coudl be reduced by reducing spending rather than taking more of someone's private property .
ReplyDeleteLOWER tax rates = higher tax revenue. This is not merely the Laffer theory; it is supported by data available from the US Treasury
ReplyDeleteI'm sorry Anonymous 4:58 but that's just not true. It's a nice theory, but in practice lowering taxes lowers revenue. The supply-side argument has been discredited for over 30 years now, since in the real-world lowering taxes has never produced more revenue.
ReplyDeleteActually, Jeff, the statement is accurate, at least to some extent. The extra revenue is spent, which is turn boosts economic growth. But there is a point where the deficit becomes the 800 lbs. gorilla in the room. The point at which this occurs is something I do not know.
ReplyDeletePlease do yourself a favor and check out the AP article about Moody Analytics. I thought it was helpful.
http://www.kansascity.com/2010/11/27/2475475/how-congress-tax-cut-decision.html
Pubius said:
ReplyDelete"1. Allow me to expense all my capital expenditures the year I make the investment, not over 5-30 years."
*********************************
Bernie -
A business owner can already expense up to $500,000 in asset additions for 2010 and 2011, if they have less than 2,000,000 in asset additions for the year.
I would have thought that Pubius would know this.
The problem with Jeff and Pubius is that they both believe that government knows who will spend their money in the best way for the economy. Government doesn't know, and is merely interfering in the free market. Look at the results.
Tax rate cuts are the best way to stimulate economic growth and allow the market to function the way it should.
"I agree in general about rancor, but for a very few issues--income and wealth inequality in particular--strong language is warranted."
ReplyDeleteI disagree and think you lose more people than you gain by being a flamethrower. For example, the decision to call that news release "slimy" presumes that both Congressman Dent and his press aide are cynically acting in bad faith. I think that is precisely why we are unable to compromise and reach answers on questions where we could probably agree. Why would someone want to agree to a two-year extension with another person who has already called him "slimy"?
Jeff, Dent is more conservative than you and me, but that thinking does not make him slimy, just as your thinking does not make you slimy. We really have to stop this crap. Me, too. I'm no angel, as you know.
Patric McHenry,
ReplyDeleteI am familiar with the current expensing, but I am talking that this is something that should be made permanent.
And you are wrong in your apparent belief that Government can only do wrong with your money. Government provides infrastructure like roads and bridges and regulates industry. National defense, and a justice system are also a part of what government provides. Like it or not, government touches you every day, even if you are not collecting social security benefits or have a Medicare card.
I mean, seriously, do you think we are better off before or after child labor laws? Do you think we are better off with or without a minimum wage? And what do you think the situation would be today if everyone who was laid off due to the recession had no unemployment benefits? Please refer back to 1932 if you have trouble visualizing what would have happened.
You think that a tax rate cut will solve all of our problems. So what is the rate that we should cut to? And just as pressing, what exactly do you cut from the budget (and be specific) to pay for that tax cut?
Publius
publius, simply put, i find your views and suggestions quite dubious for an entrepreneur, they're no different than that of the liberal college professor. why should i be concerned with the salary of 500 people, the CEO's of the biggest businesses in the world, i'm not into class warfare. no, i do not have suggestions for our tax code, but know from observation that we get little bang for our buck.
ReplyDeletebanker, cottage and perk on main sound like hobby businesses. lets see how long they're around. although i realize the community banks were started hoping for takeover, what's the required capital for startups- $10 million? quite a difference from selling a $900 lease and an expresso machine.
In regards to the Laffer curve:
ReplyDeleteJeff Pooley said...
I'm sorry Anonymous 4:58 but that's just not true. It's a nice theory, but in practice lowering taxes lowers revenue. The supply-side argument has been discredited for over 30 years now, since in the real-world lowering taxes has never produced more revenue.
----------------------------
OK let's see:
At a tax rate of 0% zero amount of revenue is collected.
At a tax rate of 100% zero amount of revenue is collected (once the taxpayer figures out he can't live on the remaining 0%)
When the territory between the tax rates of 0-100% is graphed out you get a curve. Somewhere on that curve you get the best return before the higher rate brings in diminished returns.
Think of selling a product, somewhere there's a "sweet spot" of a price where you get the most profit before potential customers are turned off by too high of a price. Similar concept IMHO.
Or simply stated, taxation effects taxpayer behavior.
Nowhere in the Laffer concept is the idea that reducing the rate ALWAYS brings in more revenue. Don't argue a strawman please.
Where is the logic on the above wrong?
Dr. Pooley please explain why the Coolidge Tax cuts of the 1920's, the Kennedy Tax cuts of the 1960's and the Reagan Tax cuts of the early 1980's actually led to higher tax revenues being collected.
ReplyDeleteHere is one solution suggested by the president of a small bussiness, a marble manufacturer, the only one of 12 left owned and operated in this country since the tax cuts began. She was on the Daily Show and suggested an evening of the playing field. She pointed out the fact that they were the only marble manufacturer left because the Chinese govt. subsidizes the exported Chinese bussiness' to almost below the energy cost to create their products. Granted, she was hand-picked when she made the statement that the tax cuts did not help her bussiness out at all, but would definitely welcome a tariff on such dumping. It's what I've seen from company to company. We've been sold out. How about a law that we don't allow imports from countries that don't have the same EPA standards and labor and wage laws? I know, it's crazy talk. Most would rather have our empire, where others work for slave wages and dump toxic stuff into their drinking water, while we claim it's to their benefit and ours: like Mexico. Just like we flush our labor laws about children working and fair wages when it comes to others doing the jobs "Americans don't want to do". It's OK. They're different,..and poor, so it's not a problem that we enable an aristocracy of a country that has easily the mineral wealth the U.S. does and have these people work as if they were dirt. At least, it wasn't a problem till we sold out so much that it's affecting the common citizen's income.
ReplyDeleteSecond, I like the idea of a 15% flat tax. Both parties hate it, so it must be good. No tax break for having a dozen kids and no breaks for guys like Perot who are paying less than 1% because of highly paid tax acct's.
Of course, there is about as much chance of that as English style campaign laws.
The AP reports:
ReplyDelete"Obama, GOP reach deal to extend tax cuts"
Hey, Doc -- does this make President Obama slimey?
The Bush tax-cuts have been in effect for ten years. How many new jobs have been created versus how many jobs have disappeared? Also what is the proportion of average wages per created jobs versus those of jobs lost?
ReplyDeleteAs has been stated in another blog, even David Stockman, President Reagan's fiscal guru and the author of Reaganomics, has stated that there is no correlation, none, between extending tax-cuts for the wealthy and job creation. Never has been. It is a political philosophy and not an economic policy.
We are in extraordinary times in this Nation. Bomb throwing and chest pounding will not do the job. Simplistic ways of looking at taxes and spending are just that simplistic and childish. Enough with the "bumper sticker" slogan stupidity. I vote for smart people who think and say what needs to be said regardless of Party. Sadly, they generally lose elections in favor of the finger in the wind crowd.
We need to both raise revenue and reign in spending. The government will always spend money, the question is what spending if any will help in our current environment.
Facts are facts and a laid-off worker is going to use unemployment compensation to offset bills, putting the cash back into the economy. The multi-millionaire, in this economy, will wisely hold on to his money and not seek to jeopardize his station.
This is a great nation but remember that slogans only go so far. If the shit is to hit the fan who has more to lose the guy who lost his job and home or the multi-millionaire. Who are there more of and whom would be willing to risk it all for a promised better life.
The Smart One in the Room
Bernie
ReplyDeleteDid you see this?
"End of year layoff looming for Morning Call?
Thursday, 2 December 2010 16:05 by Betty Cauler
Photo source: Newnan-Coweta Magazine It's funny the things you learn during a doctor's appointment. While in for my yearly checkup, my gynecologist mentioned another patient who still works at The Morning Call who told her that there will be another layoff at the paper in December or January. I don't know where they'll find people to lay off as there is only a skeleton crew in the newsroom. The Finance department will soon be outsourced to (get ready for this!) Texas. Why Texas, one might ask? Security personnel are allegedly also on the chopping block as well as a few pressmen and service techs. Insiders say the daily paper's price increase to $1 will likely cut circulation even more.
Meanwhile, back at the ranch, parent company Tribune, in Chapter 11 bankruptcy since December 2008, fired off its own round of high-level cuts. On November 18, Tribune Digital VP/Content Jim Richards exited the company as part of Tribune's on-going restructuring followed a day later by ten more dismissals including EVP/Products & Solutions Mike Glickenhaus, who just joined Tribune in September 2010, VP/Marketing Tim Dukes and Tribune Interactive Dir./Promotions Melissa Collins and Scott Baker, all hired by current CEO Randy Michaels.
Tribune's bankruptcy hearing began Monday November 29 in Delaware with creditors offering an "unprecedented" four different reorganization plans for the struggling media giant. "There are more plans in this case than I have ever seen in my life," David LeMay, who represents the official committee of unsecured creditors in the case, said in court on Monday. The Chadbourne & Parke attorney called the case a "four-ring circus." Presiding Judge Kevin Carey scheduled another hearing for December 6. Read more at Reuters and the LATimes.
On a much brighter note, it's great to see all those laid-off Morning Call journalists (including myself!) back at work for Patch.com, the community-based online news site run by AOL. Local editors include Tom Coomb (Easton), Daryl Nerl (Bethlehem), Randy Kraft (Emmaus) and Mary Ellen Alu (South Whitehall). Check them out.
Oh, and if you're wondering what to do with all those piles of old Morning Call newspapers, try the Christmas tree project pictured above. Full details are on the Newnan-Coweta Magazine's 12 Days of Christmas site. Happy cutting and pasting!"
Bernie and Anonymous 4:58 On the supply-side issue, it's true that cutting taxes can lead to more growth which gives you a bigger pie. If it's a much bigger pie, then you could in theory get more revenue even at the lower tax rate. It sounded like, from your initial comment Anonymous 4:58 ("LOWER tax rates = higher tax revenue"), that you were suggesting that lower tax rates mean higher tax revenue. That of course isn't true. In fact it's never been true, even when it was official US policy in the early 1980s. That doesn't mean that cutting taxes to stimulate the economy doesn't make sense some times, particularly in a recession--and yes some of that tax cut (just not all) can be recovered due to greater growth. But tax cutting doesn't increase revenue in the real world.
ReplyDeleteAnn 8:07, I did see Betty's story. It depressed me. I hope it is untrue.
ReplyDelete"The AP reports:
ReplyDelete"Obama, GOP reach deal to extend tax cuts"
Hey, Doc -- does this make President Obama slimey?"
That's good news and that's why we all (me included) should really try to avoid using these terms.
It's a terrible compromise, and shouldn't have been made. But it was made because the GOP held the unemployment benefits and the extension of tax cuts for the non-rich hostage. That is, if a deal hadn't been struck, unemployment benefits would have expired and everyone's tax cuts would revert to pre-2001 levels. I'm sorry, but in my book that's slimey.
ReplyDeleteYou know, Bernie, that I'm not a firebreather. This issue is in its own league.
Jeff, I know I am more of a firebreather than you. I'll write you back channel.
ReplyDeleteO'Hare a firbreather, No shit. Understament of the year.
ReplyDeleteMike, please don't insult the people that run those businesses to make your point, especially when you're guessing.
ReplyDeletePerk has been around for 10 years and 8 months ago moved to a bigger space. Cottage is almost 3 years.
These people work hard and don't deserve that kind of shot.
"It's a terrible compromise, and shouldn't have been made. But it was made because the GOP held the unemployment benefits and the extension of tax cuts for the non-rich hostage. That is, if a deal hadn't been struck, unemployment benefits would have expired and everyone's tax cuts would revert to pre-2001 levels. I'm sorry, but in my book that's slimey."
ReplyDeleteGod, if this was true, if the good doctor wasn't full of hot air, then the worst thing the GOP could ever do is gain control of the House, Senate and Presidency. I mean that's the worst possible situation, apparently.
I know the good Doctor thinks he's the A-1 brain, but here's the straight dope -- people are tied of the class warfare garbage he's peddling.
Case in point. Shortly after the people of New Jersey wised up and elected Chris Christie, the Dr. Pooley's of the world, as represented by the head of the Democrat-controlled state Senate presented the Governor with a bill increasing the "Millionaires' Tax."
Christie promptly vetoed the bill -- within the hour of receiving it. He stated quite correctly that he had promised during his campaign that he was not going to increase taxes -- and apparently -- he meant it.
The political damage to Christie -- none. Nada. Zero. Zilch. He's now more popular with the people of NJ than President Obama.
Why? Because, I believe, people are tired of the government taking and taking. And they are tired of the arguments from the redistributionists out there that the government should decide who gets your money once you've earned it.
The Guy With the Most Cents
Economic equality... dividing a shrinking pie or growing the pie?
ReplyDeleteSo Dent is concerned with only 2% of his constituency?
ReplyDeleteThat's a ridiculous argument. If you want to be critical,that's fine. But at least write something intelligent.
ReplyDeleteanon 9:58pm, point taken, my apology mm
ReplyDeleteBernie -
ReplyDeleteI can understand that Dr. Pooley is concerned about the upper 2% of Americans not getting a tax hike under President Obama.
However if he really wants to go for the big money, perhaps Dr. Pooley should champion the cause of taxing large institutions currently operating as non-profits. An example of just such an institution would be... Muhlenberg College.
The revenue that could be gained by taxing these institutions far exceeds what could be further pinched from the upper 2% of wage earners. It may also be enough to make a sizable dent in the national debt.
I'd love to see the tax-exemption continue, but it's high time that the government makes these large institutions with multi-million dollar endowments pay their fair share.
Those endowments come from an excess of revenues over expenditures. That's known as the evil "profit" in the private sector.
We simply cannot allow such an unfair tax exemption to continue. After all, the government needs the money - and those institutions have it.
I think it's fair to talk about taxing nonprofits, given that we should ask everyone to sacrifice.
ReplyDeleteJust a clarification. Endowments don't come from an excess of revenues over expenditures. Endowments come from direct endowment gifts and investment return on those gifts. In fact, interest from endowments pay some of every university's operating costs--so it's almost the opposite of "excess of revenues over expenditures."
Jeff -
ReplyDeleteEndowments, and the interest from them, are REVENUE. They might be segregated for a specific purpose, but they are still revenue.
Jeff -
ReplyDeleteBy the way - I'm not asking large institutions to sacrifice, I'm asking them to pay their fair share.
Having large institutions exempt from income tax is costing the government too much money.
Ok Patrick. I don't disagree about the taxation--that's what I meant by sacrifice.
ReplyDeleteThat's a very strange definition of revenue :)
Jeff -
ReplyDeleteSacrifice implies doing something voluntarily or having a choice in the matter.
Tax collection is about being forced to give up your (or your organization's) money under penalty of law - whether it be fines, jail time or loss of home.
Big difference.