Politics Behind the Tax Code
http://thedianerehmshow.org/shows/2011-10-17/politics-behind-tax-code
Over the weekend the "Occupy Wall Street" movement went global with protests in Europe, Africa and Asia. One of their main demands was: “tax the rich more”. It’s not just the protesters who think that would be a good idea. So too does billionaire businessman Warren Buffett, and many Democrats, including President Obama. But Herman Cain, the leading Republican presidential candidate, wants lower taxes across the board. His party argues that singling out high income earners is “class warfare”. We discuss the how the tax code debate has become a clash over America’s fundamental values.
Guests
Kevin Hassett
director, economic policy studies, American Enterprise Institute.
Jared Bernstein
senior fellow, Center on Budget and Policy Priorities; former chief economist and economic policy adviser for Vice President Biden.
Roberton Williams
principal research associate, the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution.
Sylvia Poggioli
senior European correspondent, NPR
Mike Dorning
White House correspondent, Bloomberg
Comments
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Gray.
I am spending a great deal of time in the Dayton Ohio region helping take care of elderly parents. Have not lived here in 42 years. When I left National Cash Register was leaving Dayton moving south for cheaper wages, less taxes etc. Electrical companies and other manufacturers leaving at the same time. Over the last decades thousands of fair paying jobs were moved south then overseas so that the mostly rich boys at the top as well as share holders could make more more more. THESE PEOPLE HAVE AND ARE NOT PATRIOTS. They sold the American workers down the pike as my 85 year old WWII Vet Teamster father repeats "they sold the American worker down the pike"
At the OCW rally I was talking to three gentleman one a Professor at Wright State, two other former Union members who said that Dayton Ohio has lost 60,ooo jobs over the last six years. When will our MSM start calling the owners of these companies who moved these manufacturing companies what they are...traitors. At the very least talk about how they abandoned American workers for their growing religion....Greedism
I think the confusion is along the lines what is good for business that grows jobs in USA. Particularly people confuse interests of corporations with interests of their CEOs. While interests of corporations is to grow and deliver the maximum profit to the shareholders, interests of their CEOs is to maximize their own pay (including bonuses). In addition there is no disconnect between gains to shareholders and middle class well-being since many retirement funds and IRAs are invested in the stock market. So I have the following questions:
1. Why a highly paid executive would make reckless choices that endanger the whole company and its capital? A business owner would never do it.
2. CEOs make 10-20 times as much as they used to make 50 years ago (relative to the average salary in real $). In addition CEO’s pay increased 3 times faster than corporate profits. Is it justified by their increased value to their company? I do not thinks so.
3. What is the mechanism that drives CEO’s pay up? Why common shareholders have no say on the executive pay? It is not a moral issue as it is an economical one, and it would easy to implement this control if not CEOs control over our policymaking through various lobbies and political action funding.
4. No government regulations can control or contain creativity of corporate management as long as it has the incentive to benefit from deception. How to remove this incentive for reckless behavior and deception that led to various economical “bubbles”?
Questions:
Should we appreciate the government for providing us the financial, legal and other infrastructures and systems?
Should we pay more for enabling us to be millionaires and for protecting our assets and freedom?
Who benefits or earns much more directly from government supported infrastructures like financial systems and from subsidies? Citizens working at retail stores and factories?
Diane, I wish everyone would read a just-published white paper available on New America Foundation's website, titled "The Way Forward." One of its three authors is economist Nouriel Roubini, who was derisively called "Dr. Doom" when, beginning in 2005, I believe, he described economic factors that he said were leading to an imminent crisis, one essentially like the one that soon came to pass. I'm an ordinary lay person, and I found the 27 page paper readable. It has signigicantly increased my understanding of what happened, why it happened, and what the world economic situation is today.
As the title suggests, the authors also provide a detailed prescription for preventing a second, currently looming crisis.
Pancake
Warren for Pres in 2016..it is coming.
Not one person that I talked with at the Dayton OWS or heard interviewed by the MSM in New York and elsewhere has said..we want our taxes lowered or we want a free ride etc etc. The overwhemling message is FAIR RIDE...accountability for the banksters.
Happy that the MSM is covering these protest they barely covered the millions of us nationwide that marched, protested, lobbied our reps, went to jail trying to stop the illegal and immoral invasion of Iraq. Barely a whisper. 30 million world wide protested...attempting to stop the unnecessary blood bath that was sure and did and still is taking place in Iraq.
One of the main organizers stated that these protest around the world were the largest in all of time. I corrected her and said nope 30 million people protested before the invasion of Iraq.....but the MSM barely covered us. So so sad
hipwaterswamp wrote:
"The rich are complaining that they already pay 30% of their income in taxes.
BUT - after their taxes are all paid they STILL HAVE MILLIONS LEFT for their use. We pay our taxes and have only $40,000 left.
Using a percentage to claim that they (the wealthy) are already paying enough taxes does not give a clear picture. The bottom line should be HOW MUCH MONEY DOES A PERSON HAVE LEFT AFTER THEIR TAXES ARE PAID."
Sounds fair, right? Then I have two questions for you:
1) Who decides how much a person can have left? You?
2) Why do you think you have a right to take (and take and take until you are somehow satisfied) what another has earned?
kathleen wrote:
"Not one person that I talked with at the Dayton OWS or heard interviewed by the MSM in New York and elsewhere has said... we want a free ride etc etc. "
kathleen, how would you classify those who want their student loans expunged?
Does anyone other than H&R Block, tax accountants and the IRS want to keep the current 40,000 page tax code? Cain's 999 plan may not be the answer, but he is the only candidate advocating jettisoning the current system.
ecgberht wrote:
"kathleen, how would you classify those who want their student loans expunged?'
-----------------------------------
You don 't understand. Students just want to be "forgiven" for their student loans. It's not as if being "forgiven" and being "bailed out" are synonymous because...Well...Um...What was the question, again?
Hi all I am the99% want you to know where I stand. Is it in front.
I do not want you to lift a finger in my defense just witness and tell all what you see.
I Have had conic breathing problems for 10 years and I have no health care.
So since I'm dying because of and for your sins.
I will cry for you even if you can not.
I will not fight you for dying would give me sweet re leaf from the all the horrors that I see.
I will not accepted your hospitality but I will cry for you even if you can not.
So You can beat me, You can isolate me, You can kill me, I don't care.
For all this life is to me, is an endless miserly.
So sines I'm dying anyway. I want you all to witness it in its true brutality.
With my blood on your hands for all to see.
Peace out
One of the suffering masses
I listen to your show faithfully and have noticed a trend in your guests on this and previous shows regarding the economy. It seems that their focus tend to be "single-minded." By that I mean that the debate is about "will this single proposal solve all of the economic problems."
Just making the taxes equitable will not by itself solve the problem, it must be viewed as one component, just as reducing spending, rooting out fraud/abuses, strengthening regulations, etc. will all combine to solve the problem.
Can it be that our representatives lack the ability to see this?
the media are owned and controlled by guess who? the rich.
They won't cover this until their offices and their shows are occupied!! Those filthy rich are robbing us of honest pay and the media portray the 99% as violent,(lie) and lazy, (lie) and anything else they can think of.
It's time to go to the media in large numbers.
THe rich wouldn't know tax warfare if it bit them. They are people inflated with their own success, their own perceived self-righteousness, and they enjoy the thrill of acquisition and don't care who they hurt because we are not even considered as sentient .
To them we are units of work at best.
Thanks for your posting. you are right. I'm getting this in CDT, so the show already over.
Public radio and the internet are our main way of learning the truth and the government may cut those off.
People with nothing to lose have more to gain in change.
Mr. Monte,
>>I think it would be a sobering experience to the "middle class" if they knew they were part of the problem and not an answer to the solution.
Wrong. The fact that the middle class is shrinking because those at the TOP keep taking more and buying off our politicians to GIVE them more is the problem. If you don't have a thriving middle class, we will never get out this mess caused by greedy.
>> Tax codes and right offs have become another entitlement. The fact that somewhere near 50% of tax payers pay no federal income tax goes unnoticed by the typical taxpayer.
Dude, the word is "write-off." The fact that you can't even spell displays your ignorance on this topic as well as most of your Faux News/Heritage corp obtained "knowledge." But on your intended point, keep in mind the Earned Income Tax Credit and the Childcare credit (two of the biggest "right offs" you claim to be against) were put in place by REPUBLICANS (Reagan and Bush Jr.). Also, with Standard and dependent deductions, which everyone gets, almost all families making less than $26,000 would not pay any Federal Income tax. Of course, what goes unoticed by the typical right-winger is that these people pay far MORE of their income to FICA taxes, sales taxes, property taxes, and other fees. They need the break from Federal Incomes taxes. It's not an "entitlement," it's law.
More comments on Monte's first post:
>> Government in all it's class warfare glory has successfully hidden the fact that all of us are over taxed to achieve the unobtainable. Government with the best intentions cannot reach into every private matter and right the wrongs. At some point personal responsibility must come into play.
BS. The class warfare going on for the last 30 years is the rich against the poor and middle class. Tax revenue is at its (not "it's") lowest point since the 1950s. Of course, everyone should take personal responsibility. But first you have to have a level playing field. And with ALL the money in politics literally bribing congress, I worry we may never have that.
ecgberht: "Why do you think you have a right to take (and take and take until you are somehow satisfied) what another has earned?"
It's not a right. It's entirely debatable. I can continue and ask Why does a nation have the right to take what its citizens have earned in the first place? On what basis do nations have the right to exist? I think there is a social contract in which a citizens accept to play by certain rules on the precondition of getting something in return, such as safety, infrastructure, etc. Some people think it should include a safety net for poor people, education, health care etc. Many people think that society as a whole, including the top earners, would be worse off when income distribution is more unequal. Ideally people vote on what the tax rate should be and what the money should be spent on. It just happens that most people prefer a more equal wealth distribution than we have now and taxes is the easiest tool to use.
What do all CEO's have in common, they work 100+ hours aweek and use their brains not there bodies. If you wish to change the "wealth inequity" that you perceive, try proving the work ethic that these persons demonstrate. Oh and just maybe you should spend your time and efforts bettering youself instead of complaining that the government(funded by the people that use the services the least) hasn't given you a handout or unfair advantage. Whining willnot make you a success, hardwork and a willingness to give up somthing(your at home time) to prove your worth to a company.
I doubt the 50% would be willing to work the hours the rest of us work. Try 80+ hour weeks not occasionally but every week. Lets see these people work to get the education and then display the work ethic.
Who was the joker on the panel who set up a farcical straw man by claiming there are people who believe the government is entitled to 100% of our money? I'm guessing it was Hassett from the American Enterprise Institute. Fortunately one of the other panelist immediately called him on it. I'd like to think you would have, too, Diane, if the panelist had not.
Seriously, it is useless to put such ideologues on a panel for serious discussion, since they are paid to promote a position and don't let facts get in their way.
Why is everyone missing the point.
Taxes, revenue, jobs, all the bad things our bad economy is experiencing will be corrected when the economy recovers. 50 % of the people are not paying federal income taxes because they have no income or insufficient income.
Why aren't the majority of the people not getting decent income?
It is not that corporations are making good profits, capital gains or dividends.
It is that there are too many people receiving very high salaries and bonuses for doing relatively very little in proportion to their income. I'm talking about, not only the CEO's, but the obscene salaries of celebrity performers, pro athletes, TV personalities,etc. who really aren't adding much real value for their compensation.
We all think that the owners, the corporations, the TV producers can afford to pay these salaries and they can. In macro economic terms, the money must come from somewhere. The payee of these salaries can pay because they steal the money from their payroll funds to pay these overpriced salaries, or they charge their customers more, or it is their providers who must charge more, all of which reduces the money available to pay the people who really add value to the economy.There is nothing left to pay the workers, including the middle class.
The economy depends on the exchange of money. The exchange of money occurs primarily in the market place. A dollar in the hands of a lower income person returns to the economy within a week or so. The same dollar in the hands of the rich will eventually reach the economy through spending, or investment in several months. What this means, is that higfor every dollar that the wealthy gets paid for doing nothing reduces the economy by a factor of 10 to 15 times.
Treas_Sh wrote: "The fact that you can't even spell displays your ignorance on this topic as well as most of your Faux News/Heritage corp obtained "knowledge."
The link had nothing to do with the source, here's the source of that data.
U.S. Census Bureau, White House Office of Management and Budget, and Congressional Budget Office.
Seems you have a personal problem with me, typical liberal name calling coupled with a post filled with nothing but conjecture. Did you orgasm at the sight of that spelling mistake?
roland wrote:
"It's not a right. It's entirely debatable. ..."
roland,
Thanks for a thoughtful reply. I really mean that. I know we are diametrically opposed in philosophy (why, I'll get to in a minute), yet you could post a reply that had no invective or insult in it. And I'm actually with you, most of the way. Taxes are necessary for the Constituionally mandated duties of Congress; infrastructure, defense, coining money, etc. We're even together on the safety net, though not the form that it currently takes. Where we diverge is here, "It just happens that most people prefer a more equal wealth distribution than we have now and taxes is the easiest tool to use". That simply isn't true unless you can provide some kind of source that backs that statement. If it were true, we would be a socialist country, because that's where "equal wealth distribution" takes place. Our democracy is founded on the principle that by levying taxes, government take what is necessary to fund its duties, not on the principle that the government should equalize wealth. The former admits that resources belong first to the people that own them. The second admits that resources belong first to the government to distribute as it sees fit.
http://krugman.blogs.nytimes.com/2011/10/13/buffetts-buffetts-everywhere/
"Greg Sargent points us to a new Congressional Research Service report (pdf) showing that there are a lot of millionaires paying lower taxes than many middle-class Americans. On average, the tax code is progressive — but there are a lot of cases where it isn’t."
http://krugman.blogs.nytimes.com/2011/10/11/stocks-flows-and-fuzzy-math/
"I read David Brooks citing the Tax Foundation this morning, and I thought he must have misread them. They couldn’t possibly have compared one year’s take from higher taxes on the rich with the total stock of debt, could they? They can’t possibly be that stupid, or think that their readers are that stupid, can they?
Yes they did. They actually find that their version of the “Buffett rule” would collect $120 billion a year, which is a seriously significant sum. But they try to make it look small by comparing one year’s revenue with the total debt outstanding.
I mean, the standard scoring method in Washington involves using 10-year projections — and even that is flawed, because the real budget issues are much longer-term than that. But nobody, nobody thinks it makes sense to estimate the effect of a revenue proposal on future debt by looking only at the first year’s receipts.
This deliberate fraud — because that’s what it has to be — is an example of the reasons knowledgeable people don’t trust the Tax Foundation."
@Monte - So spending is the problem? That's like saying that rain is a problem. It just depends on the circumstances, and right now, the circumstances demand not less spending but much more. There’s lots of needed work to be done fixing the old infrastructure and building the new, in the shape of high speed broadband for every community, the 21st century’s equivalent to rural electrification. This is THE time to rebuild our decaying bridges, roads and schools. If your roof leaks, you fix it now; if you don't, it will cost you more later, if you get to it in time.
The private sector isn’t going to create jobs when there’s not enough demand. The government must step in and pay for it by higher taxes on the wealthy, the only ones for whom the economy has worked well for years, and by borrowing. Interest rates will never be so low again, and when the borrowed money is paid back in future dollars, it will be equivalent to repaying a loan at negative interest. Time enough to worry about the deficit when better times return, and besides, putting people back to work is the best deficit reduction program of all.
The kind of wholesale cuts in government spending that are being advocated will put lots more people out of work without doing a thing to solve our current problems. Just like people who have lost private sector jobs, they won't have the disposable income to spend that will keep other people's businesses going. One person's spending is another person's income.
"GraywingB43 wrote:
If lowering taxes were responsible for creating jobs, then why is it that employment rates were higher in past years when tax rates were more progressive--exactly the point of your current speaker. We've lost jobs since the Bush tax cuts were past. Also, middle class people spend more of their income and thus contribute more to economic demand. Without a strong middle class, the economy cannot recover."
Not quite Graywing: There were periods that unemployment was around 4.5 %. It was the last two years of the Bushes administration that saw loses that wiped out any gains.
"kathleen wrote:
Gray.
I am spending a great deal of time in the Dayton Ohio region helping take care of elderly parents. Have not lived here in 42 years. When I left National Cash Register was leaving Dayton moving south for cheaper wages, less taxes etc. Electrical companies and other manufacturers leaving at the same time. Over the last decades thousands of fair paying jobs were moved south then overseas so that the mostly rich boys at the top as well as share holders could make more more more. THESE PEOPLE HAVE AND ARE NOT PATRIOTS. They sold the American workers down the pike as my 85 year old WWII Vet Teamster father repeats "they sold the American worker down the pike"
Kathleen:
You write down so much B.S. it is unbelievable. Many of those jobs moved so that they could be more competitive with foreign companies making the same products. We still are the 1# economy in the world, however I see that changing in the near distant future. Maybe instead of always blaming corporations, perhaps you ought to look at unions as well. If anybody has benefited from some of these jobs moving south are perhaps the American consumer that do not have to pays higher prices as a result of the never ceasing finacial demands brought forth by unions resulting in higher costs for goods and services.
FYI Kathleen: 70% of present employed worker have a 401K that has investments in Wall Street. Why don't you talk to some of your leftist employed friend that have 401k's or Ira before you start making such asinine statements.
"mancuroc wrote:
@Monte - So spending is the problem? That's like saying that rain is a problem. It just depends on the circumstances, and right now, the circumstances demand not less spending but much more. There’s lots of needed work to be done fixing the old infrastructure and building the new, in the shape of high speed broadband for every community, the 21st century’s equivalent to rural electrification. This is THE time to rebuild our decaying bridges, roads and schools. If your roof leaks, you fix it now; if you don't, it will cost you more later, if you get to it in time."
Well what happened to that 900 Billion Recovery Act. We the American people were sold that it was a infrastructure bill, putting million back to work, building bridges, roads, etc. What the hell happened ? This was the bill ,l THE MOTHER OF ALL BILLS to bring unemployment under 8%.
I really tire of three points often put out by the "fairness" argument:
1) During the Clinton Years, taxes were higher and the country was better.
Answer: Yup, during the .COM bubble, we all tossed our in money to the rising Stock Market, felt great, until it blew up. Then there was a recession. I was there. Our company had offices in San Jose, CA, NYC, and Minneapolis, MN. When Terry McAuliffe and his clan from Global Crossing had all cashed out, we were left with the bill. Those "great" companies are now almost gone; Sun Microsystems, sold to Oracle, AOL, on life support, Cisco Systems, sliding fast, etc. The people wanting to go “back to the Clinton years, conveniently forget the bubble. It’s easy to forget, and much harder to learn from the past. Then we had the Bush Real Estate bubble and did it all again.
Clinton did nothing different, his term just ended at a better timing point.
2) The RICH did something that prevented the REST OF US from succeeding. Yes, they didn't buy houses they couldn't afford. Yes, they spent more money educating themselves. Yes, they ran their own businesses and entered the World Markets instead of following the European and American Unions down the tubes. I wonder what the rest of US were doing?
3) We must tax the wealthy "just for now" and borrow money at the current low rates to get us going again. Then we'll pay it back. America has never paid its bills, that's a fact. It's the reason why we are losing in the World Markets. Brazil, India, China, and even Russia. They all pay their bills. If you notice, so do "the RICH."
Look, if you really want to look at the problem, look in the mirror. We all followed the Congress saying the consumer is our engine to growth. Yes, well, now we're all living with that DEBT! Any money I get I'm paying bills and retiring as much debt as possible. So are you. Everyone would. This whole argument is just a way of avoiding the mirror we all need to look into.
--Roer
1. Now that corporations are ''persons'' (per the Supreme Court)
they should also be included in the millionaire's tax.
2. A respectful reminder to the right wing evangelicals:
Jesus stood with the 99-percenters too!
@meanconser
"Well what happened to that 900 Billion Recovery Act. We the American people were sold that it was a infrastructure bill, putting million back to work, building bridges, roads, etc. What the hell happened ? This was the bill ,l THE MOTHER OF ALL BILLS to bring unemployment under 8%."
We were in a VERY deep hole in 2009. If you look at the trend line of jobs lost and jobs recovered, you can see that it worked, as far as it went. You don't stop taking your medicine the minute it starts to work.