I don't believe it's intellectually dishonest to look at differing tax structures and understand how they effect household earnings. Why tax one kind of income differently than another? Capital gains is income, just not wages or a salary, but still income. You also have to look at a household's entire tax burden. True, the federal income tax is progressive, but that is only part of the tax burden on many households. Federal excise taxes such as on gasoline are flat rates, sales and property taxes at the state level are also flat, and these take a diproportionately higher percentage of the working and middle class incomes. A $1000-$2000 sales tax on a new or even used car is far more massive burden when you earn $30,000 versus $250,000. While on a slightly different subject, Warren Buffet has also pointed out the unfairness of the property tax situation here in California where he pays less property tax on his multi-million dollar beach house in Laguna Beach than he does on his childhood home in Oklahoma. There is real validity in constantly reevaluating tax structure for equitability, and perhaps something to be said for taxing consumption rather than income such as the VAT.Jake wrote:Buffet, and the current administration, are making the intellectually dishonest comparison between income taxes and capital gains taxes in their class warfare rhetoric and are hoping the majority of the uninformed masses won’t see thru the BS. Raising the capitals gains tax would hurt everyone (not just the rich) and crush the US economy even further. And it is all of us (not just the rich) who are going to get hit with new taxes, fees, and higher insurance rates thanks to the current tax and spend focus in Washington, especially when Obamacare is fully implemented.Styles Bitchley wrote:Warren Buffet should be commended for binging the ultra-rich tax issue to the fore. The fact that it's even a difficult issue (raising income tax on the country's multi-billionaires to that of normal folk) shows how much power this small group wields in Washington. Did someone say democracy?
Before falling into the trap of class warfare and demonizing anyone keep in mind that the U.S. tax system is already heavily weighted at the top. The top one percent of income earners pay 38 percent of all federal income taxes, the top 5 percent pay 59%, and the top 10% pay 70%. The bottom 50 percent pay only 3 percent and 49 percent of U.S. households pays no federal income tax at all. The government needs to cut the spending and waste before imposing more taxes on anyone. No more "stimulus" packages (we can see how well the first one worked)!
The collapse of the housing market (thank Barney Frank for refusing to regulate Fannie/Freddie and the banks for bundling the known shady loans) was the key trigger for the recession and the resulting bailout of Fannie/Freddie, the banks, and auto companies is sickening. I personally hate it and wish that the companies were forced to fold, however I do acknowledge that without TARP the economy would likely be much worse right now. As usual the government dropped the ball and dished out the TARP money with few strings attached and now the banks are stingy on lending money which is hurting economic growth. In this respect I feel the same frustrations as the Wall Street protestors and would gladly line up a bunch of the politicians and CEO's so the mob could throw their hacky sacks at them. However the "movement" has evolved into a conglomeration of a bunch of left wing idelogs and conspiracy theorists who are getting funding & support from the unions and George Soros so they will struggle to gain credibility (except on NBC news of course!).
The folks need to remember what made this country great, hard working Americans with a great work ethic, innovative spirit, and entrepreneurship. The entitlement mentality, lining up for government handouts, and getting into the mindset of punishing those who work hard and are successful in an effort to redistribute the wealth will ruin this country. How does it look like it is working out for Europe/Greece?
Sorry for the rant, I don’t want to get super political here or start an argument with anyone who has their own strong beliefs, as this forum is not the place to do so. All I ask is that people inform themselves on the issues and then make up their minds about what really makes the most common sense. Don’t get sucked into believing the rhetoric from either side, as it is usually designed to be either populist or simply pandering to the idelogs in the extremes of their given parties.
I would also argue that if you want to blame the banks for risky lending practices you have to start with the deregulation begun in the 1980's such as ending Glass-Steagall, and continuing under subsequent administrations. The consumer Financial Protection Bureau that is being put in place now may never have been necessary if the strict separtion of investment banking and commercial banking were still in place. Styles hit the nail on the head in regards to Canada's and Switzerland's more strict banking sector regulations. True no nation is insulated from the world economy, but bank failures from the end of the Great Depression until the end of Glass-Steagall in the 80's were fewer than in this last economic downturn alone.
Also, most economists agree that both TARP and the stimulus have been successful. TARP has cost taxpayers substantilally less as a percentage of GDP than the S&L bailout of the 80's, and averted a much bigger banking crises. The stimulas has resulted by most estimates in the unemployment rate being 1-1.5% lower than without, and that translates to a couple of million fewer workers in the unemployment lines. While neither is particularly popular with the general public, without them the situation would undoubtedly be worse.
Styles, the comparison to the New Deal was in regards to direct relief to the population in the form of public works and job creation programs, and domestic policy can certainly still impact this area. Short economic downturns can often be weathered without major government intervention, but the current situation certainly can't be called short term, and call for some level of involvement. The big question, of course, is currently being argued by both left and right.
By the way, I also agree this is a positive dialogue even with widely differing opinions. Too bad Washington seems to be having nothing of the kind.