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No Fiscal Deal Without Higher Tax Rates On Rich, Obama Says

That doesn't mean it's the correct course of action.
Just out of curiosity, how much do you think will be generated by the increased tax?

This was never about how much would be generated. It has been a fairness issue.
 
Only 1.5 Trillion a year short.
I stated how much revenue would be raised by letting the Bush tax cuts expire on the top 2 income brackets of those couples making $250,000 0r more a year.
I never said that the increase would take care of our deficit.

It is just a start. Spending needs to cut in many places and perhaps we need more sources of revenue also.

The $80 billion a year is a start.

Gov. Romeny was going to start the spending cut by cutting out the funding for Big Bird/ PBS.

Just cutting funding for PBS would not solve the deficit either, but it would have been a start.
 
I stated how much revenue would be raised by letting the Bush tax cuts expire on the top 2 income brackets of those couples making $250,000 0r more a year.
I never said that the increase would take care of our deficit.

It is just a start. Spending needs to cut in many places and perhaps we need more sources of revenue also.

The $80 billion a year is a start.

Gov. Romeny was going to start the spending cut by cutting out the funding for Big Bird/ PBS.

Just cutting funding for PBS would not solve the deficit either, but it would have been a start.

According to Obama's own former chief economic adviser, the proposed hike in tax rates will result in more economic destruction than we will realize in revenue gain.

This is a "start" that leaves us further behind than when we started.
 
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You subsidize what you want more of, and you tax what you want less of. So you are saying we want less investment in America right now? We are filled to the brim with capital, and there are more jobs than people, and gosh we just can't take any more advancement and need to slow down for a bit?

people won't stop investing. there have been many periods of growth under higher capital gains rates. however, the alternative system could be tweaked; for example, we could lower the rate further under the cap, or simply create a new progressively-tiered capital gains system. the idea is mostly just a theory, though, because i doubt that it will be seriously considered by either side.

however, i agree with you that one-sided austerity is a losing proposition. soaking the lower and middle classes as the republicans want to do will put a serious crimp in demand. rapidly raising taxes only on the rich will also have negative consequences. everybody is going to have to give something. what is critical is that we address the problem from both the revenue and spending sides, and that we carefully phase in any changes.
 
Obama is playing politics with the lives of us Americans he supposedly is in office to do good things for. His statement that he will not sign a bill that does not raise taxes on the rich proves he is more interested in destroying Republicans than he is in leading us out of this horrible economy. If Reps can find a way to meet his dollar requirements through closing loop holes the rich use then there should be a deal. What obama wants though is to weaken Reps with their base by forcing them to break their pledge not to raise taxes or to go over the cliff and blame it on Reps in order to turn the general public against them. Obama just may drag us into another recession, possibly even a new depression.


"President Obama today declared there would be no deal to avert the looming fiscal cliff unless Republicans agree to raise rates on the top 2 percent of income-earners."

No Fiscal Deal Without Higher Tax Rates On Rich, Obama Says - ABC News

This is such a freaking game. Too bad we can't "blanket impeach" Congress.
 
As arguments on all of this are becoming entirely moot, I'd just point out the irony of those who insist it's the middle class which is the real economic driver and has the real economic power, but for some reason, it doesn't have the money for a tax increase, or said increase would bring in negligible amounts.

(Similar -- raising taxes on "the poor" will somehow cause a recession. They don't have any money, apparently, but their contribution to the economy is that powerful.)
 
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people won't stop investing.

whatever makes you think that the only place in the world to invest is in American business? capital is extremely fungible. You lower the return on investing in American business, you simply relatively increase the attractiveness of other venues. Given our #1 spot in the Corporate Tax rankings, other nations, eager for the capital, probably can't wait for us to shoot ourselves in the other foot. States will do well, too; their borrowing costs will go down.

there have been many periods of growth under higher capital gains rates.

yes. We also have had many beautiful moments of selflessness in wars in which we blew millions of people into little bits. I'm not really sure how the "we've made it harder before" argument translates into "therefore we should do something stupid now".

however, the alternative system could be tweaked; for example, we could lower the rate further under the cap, or simply create a new progressively-tiered capital gains system. the idea is mostly just a theory, though, because i doubt that it will be seriously considered by either side.

:shrug: I wouldn't mind a single tier-split as was proposed during the last campaign - that all investment income under $200K, for example, be tax free. Let retirees live with full access to their savings, and encourage the middle and lower income tiers to save and invest.

however, i agree with you that one-sided austerity is a losing proposition. soaking the lower and middle classes as the republicans want to do will put a serious crimp in demand

:lol: and where do Republicans do this?

Europe has tried two-sided austerity, where they reduce spending in order to free up more resources (good) and then try to suck them all back up with higher taxes (bad). The results have.... not been optimal.

Fortunately, we have several decades of experience from which we can learn

...We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As for fiscal adjustments, those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions. We confirm these results with simple regression analysis...

rapidly raising taxes only on the rich will also have negative consequences. everybody is going to have to give something.

Agreed, but trying to get the wealthy to "give something" through increasing their tax rates A) will destroy more of the economy (according to the former chair of the PRESIDENTS" OWN council of economic advisers), and B) won't raise additional revenue.

Far better is to stop spending on the wealthy. The Wealthy Need To Pay Up? Okay. Let's raise the retirement age to 67. Unless you have more than 5 million dollars. Then you do not need nor will you get Social Security or Medicare at all. Everyone gave up some, the wealthy gave up the most, and we actually managed to reduce the deficit without wrecking the economy any further.

what is critical is that we address the problem from both the revenue and spending sides, and that we carefully phase in any changes.

yes. the problem is that you can't increase revenue by increasing rates - you increase it by increasing GDP and growth while reducing the relative size of government.
 
I stated how much revenue would be raised by letting the Bush tax cuts expire on the top 2 income brackets of those couples making $250,000 0r more a year.
I never said that the increase would take care of our deficit.

It is just a start. Spending needs to cut in many places and perhaps we need more sources of revenue also.

The $80 billion a year is a start.

Gov. Romeny was going to start the spending cut by cutting out the funding for Big Bird/ PBS.

Just cutting funding for PBS would not solve the deficit either, but it would have been a start.

I don't disagree with you that he wanted to cut Big Bird, but his plan included more cuts than just big bird. He did have a lot of I will show you the tax loops I plan on eliminating later, and that is the issue. We need a plan, and not just class warfare. Obama is going to raise the taxes on the rich and talk about entitlement reform later. Both plans stink. Put out your whole plan, let's see all the cards, and forget this one little thing at a time. They get paid to make and enact a plan, something they haven't done for many years.
 
Not really. The rich should be paying more. It is fairness not class warfare IMHO.

They already pay more, but now you want them to pay more yet.

According to the Office of Tax Analysis, the U.S. individual income tax is "highly progressive," with a small group of higher-income taxpayers paying most of the individual income taxes each year.

In 2002 the latest year of available data, the top 5 percent of taxpayers paid more than one-half (53.8 percent) of all individual income taxes, but reported roughly one-third (30.6 percent) of income.

The top 1 percent of taxpayers paid 33.7 percent of all individual income taxes in 2002. This group of taxpayers has paid more than 30 percent of individual income taxes since 1995. Moreover, since 1990 this group’s tax share has grown faster than their income share.

Taxpayers who rank in the top 50 percent of taxpayers by income pay virtually all individual income taxes. In all years since 1990, taxpayers in this group have paid over 94 percent of all individual income taxes. In 2000, 2001, and 2002, this group paid over 96 percent of the total.

Treasury Department analysts credit President Bush's tax cuts with shifting a larger share of the individual income taxes paid to higher income taxpayers. In 2005, says the Treasury, when most of the tax cut provisions are fully in effect (e.g., lower tax rates, the $1,000 child credit, marriage penalty relief), the projected tax share for lower-income taxpayers will fall, while the tax share for higher-income taxpayers will rise.

The share of taxes paid by the bottom 50 percent of taxpayers will fall from 4.1 percent to 3.6 percent.

The share of taxes paid by the top 1 percent of taxpayers will rise from 32.3 percent to 33.7 percent.

The average tax rate for the bottom 50 percent of taxpayers falls by 27 percent as compared to a 13 percent decline for taxpayers in the top 1 percent.

The White House has announced it will lobby Congress to pass legislation making most of President Bush's tax cutting measures permanent.

Source: U.S. Treasury, Office of Tax Analysis

Who Pays the Most Income Tax?
 
Obama is playing politics with the lives of us Americans he supposedly is in office to do good things for. His statement that he will not sign a bill that does not raise taxes on the rich proves he is more interested in destroying Republicans than he is in leading us out of this horrible economy. If Reps can find a way to meet his dollar requirements through closing loop holes the rich use then there should be a deal. What obama wants though is to weaken Reps with their base by forcing them to break their pledge not to raise taxes or to go over the cliff and blame it on Reps in order to turn the general public against them. Obama just may drag us into another recession, possibly even a new depression.


"President Obama today declared there would be no deal to avert the looming fiscal cliff unless Republicans agree to raise rates on the top 2 percent of income-earners."

No Fiscal Deal Without Higher Tax Rates On Rich, Obama Says - ABC News

I disagree completely. Obama needs to stand firm on this and let the chips fall where they may. He was elected to do this the first time and caved to the Republicans. He was elected on the same agenda and given a second chance. He cannot allow the Republicans to hold the middle and working class hostage in order to protect the interests of their base. The American people understand that the Republicans care mostly about the wealthy and they will pay the political price if they take the middle class and working class over the cliff.
 
Read that as "CLASS WARFARE".

LOL....I love how its "Class Warfare" with you people when it adversely affects the wealthy....however when tax cuts overwhelmingly benefit the wealthy you guys think its all fine and dandy.
Give it up with the propoganda talking points. They ain't selling.
 
So, $80 billion a year.
What does that do when we see defects in excess of $1 trillion a year? Not much, huh?
Time to drop the class warfare rhetoric and come up with real solutions. Like cutting spending.

List the top ten things to cut please? And how much cut comes from each of those top ten?

Please.

I'll wait - but I won't hold my breath.

What are "THE CUTS" that everybody wants to see happen?
 
The irony in the situation that is totally missed is that Obama can jump up and down, stomp his feet, give speeches, go on another apology tour, or go play B ball. In the end it does not matter. Other than proposing a budget and having veto power, it is the House that presents the budget. If I were the House, I would formulate a budget, including the cuts in spending and the tax situation, and vote on it and present it. Then Obama would have the choice of veto or acceptance. Traditionally, the President presents a suggested budget. He has not done that ever.
 
whatever makes you think that the only place in the world to invest is in American business? capital is extremely fungible. You lower the return on investing in American business, you simply relatively increase the attractiveness of other venues. Given our #1 spot in the Corporate Tax rankings, other nations, eager for the capital, probably can't wait for us to shoot ourselves in the other foot. States will do well, too; their borrowing costs will go down.

once again, i tend to doubt that treating investment income as income above a cap is going to make most people stop investing in the long term. there might be a large influx of small players to the markets if the cap is properly designed and if the rate under that cap is attractive enough. i would also argue that one tax that is ripe for lowering is the corporate tax. we're much better off taxing individuals while having a very competitive corporate rate. we're kind of doing the opposite right now, and i think that we should make some changes.

yes. We also have had many beautiful moments of selflessness in wars in which we blew millions of people into little bits. I'm not really sure how the "we've made it harder before" argument translates into "therefore we should do something stupid now".

stupid would be going over the cliff and enacting these cuts and rate hikes all at once.

:shrug: I wouldn't mind a single tier-split as was proposed during the last campaign - that all investment income under $200K, for example, be tax free. Let retirees live with full access to their savings, and encourage the middle and lower income tiers to save and invest.

we could probably tier it, but i doubt that the cap for no tax could be set at $200k. someone who has done the math on such a proposed system would have to weigh in, though.


:lol: and where do Republicans do this?

the compromise put forward by them includes no rate hikes and depends on unspecified loopholes to fill the gap. which loopholes?

likewise, Obama's plan puts it all on the wealthy to solve the problem. both plans are nonstarters, and are designed to be goalposts. i'm sorry to see that the initial offers from both sides ignore reality completely, but that's how it works.

Europe has tried two-sided austerity, where they reduce spending in order to free up more resources (good) and then try to suck them all back up with higher taxes (bad). The results have.... not been optimal.

improperly phased in. that should be a lesson to us.

Agreed, but trying to get the wealthy to "give something" through increasing their tax rates A) will destroy more of the economy (according to the former chair of the PRESIDENTS" OWN council of economic advisers), and B) won't raise additional revenue.

Far better is to stop spending on the wealthy. The Wealthy Need To Pay Up? Okay. Let's raise the retirement age to 67. Unless you have more than 5 million dollars. Then you do not need nor will you get Social Security or Medicare at all. Everyone gave up some, the wealthy gave up the most, and we actually managed to reduce the deficit without wrecking the economy any further.

i'm ok with means testing and perhaps raising the contribution ceiling, but cutting the wealthy completely out of the system isn't something i support. if they paid in, they should be able to collect.

yes. the problem is that you can't increase revenue by increasing rates - you increase it by increasing GDP and growth while reducing the relative size of government.

i doubt that we're at the far right of the Laffer curve, and i haven't read too many unbiased economists arguing that we were. raising rates will increase revenue, but it has to be done carefully, as do the spending cuts. we definitely need growth, but going over the cliff risks killing both supply and demand sides for years to come. growth is screwed if we go over the cliff.
 
List the top ten things to cut please? And how much cut comes from each of those top ten?

Please.

I'll wait - but I won't hold my breath.

What are "THE CUTS" that everybody wants to see happen?

I don't know if I can come up with 10 off the top of my head, but I will give you a few:

Welfare, ADC, WIC, cell phones, section 8, any others. 10% for starters. Alternative energy and other green projects - 100%. Either the market will step in or it won't. Subsidies to individuals and businesses large and small, 10%.

Government salaries and pensions, including their own - an easy $15% can be cut, and even then the salaries will be higher than the comparable private sector.

Too big to fail bailouts - 100%.

Education - 100% by the federal government, including the department of education.

Illegal immigration - 100%, slightly offset by the need for greater border security.

Those are just a few. There are others.
 
Many countries in Europe have higher tax rates for their weathy than the US has>

From this article:

The newly elected Socialist Party in France is poised to institute a major tax hike on the nation's wealthiest. To help pay down the country's debt, French President Francois Hollande wants to raise the tax rate on income over 1 million euros (or $1.23 million) from 48 percent to 75 percent. This tax hike would affect about 30,000 French citizens - or .046 percent of the population. The French Parliament will take up the issue in September.

Hollande's tax hike on the rich was part of his presidential campaign platform. There are a number of experts - in France and the U.S. - who are skeptical that raising taxes on the wealthy will reduce the country's fiscal burden.

"France is headed into a recession, if it is not in one already," says former Republican presidential candidate Steve Forbes in the accompanying interview. "Piling on new taxes when you have a contracting economy, that is lethal. That is poison."

There is no question that a top tax rate of 75 percent is very high. But many countries in Europe already have a tax rate of 50 percent or more.

read more:
Tax Rates: Does the U.S. Have the Highest in the World? | Daily Ticker - Yahoo! Finance
 
It is also the promise he campaigned on. And in part due to that promise the People delivered him the Presidency. So he should break that promise to assuage the Republicans? I am not yet convinced he won't break that promise, but he shouldn't. And if he does break that promise, you can be sure the Republicans will pain him the liar. And they would be correct in doing so if he does cave on this.

He campaigned on the same thing in 2008... and got the same results. Why anybody thinks things will be different this time around is a little hard to understand. Exactly what's changed since he failed to get this done for the last 4 years?
 
Many countries in Europe have higher tax rates for their weathy than the US has>

From this article:



read more:
Tax Rates: Does the U.S. Have the Highest in the World? | Daily Ticker - Yahoo! Finance

Should we even care what the tax rates in Europe are? Aren't most of the EU countries in even worse shape than we are?

You can make a list of the countries with lower or no tax rates and I think you would find that many of them are doing quite well. Not that this means anything. Someone has to pay the bills, and many of the low tax countries have other sources of income. France's problems seem to stem not from a lack of revenue, but rather a glut of spending. Does this sound familiar? So what is the solution, Barry and Holland say raise the taxes on the rich, I would suggest that living within your budget might be a better solution. The real question is what needs to be done with our situation.
 
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