US defaults next week what does everyone think?
- Thread starter Capt.Toilet
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I didn't intend to show bias, it was just the first guy that came to mind. NAFTA would be the next thing that comes to mind. Enabling large companies to outsource is bad for internalizing an economic system (and subsequently keeping it strong). I'm sure that if tax reductions were given to job-makers who decide to keep their manufacturing in the US, and tariffs placed on outsourcing jobs, there would be greater incentive to keep the jobs internalized.
Well, I would be careful of jumping to any huge conclusions here about how the market will react. I just don't want anyone to be disappointed like I was today when the world didn't end after the jobs report. It will be pretty hard to top Thursday.
Lizard Of Oz
Demented Avenger
Because it unfairly puts the burden on the (ever dwindling) middle-class and the (ever growing) poor.
The real question is why weren't the Republicans willing to sign a fair bill that involved 2 trillion in cuts (including "entitlements") and 2 trillion in tax reform (loop-hole killing, plus tax increases starting in 2013) in exchange for a debt ceiling raise?
I'll tell you why. Because an improving economy hurts their chances in the 2012 elections.
Firefly
United Kingdom is not a country.
Yes, redistribution of wealth is the key to solving all America's problems.
I did some research recently on redistribution. I found that the if "corporate jet owners" gave up their subsides, Uncle Sam would collect a whopping 300M extra dollars each year. By taxing the top one percent of earners on 100 percent of their annual income, you could fund the USG for about five months. If you take that same top one percent of earners and allow the USG to seize all of these persons' assets, liquidation of the seized assets would fund the USG for less than a year. If Uncle Sam seized the assets of the top 25 percent of earners, liquidation of those assets could potentially find the USG for about eight years, but then it would be losing 90 percent of normal individual income tax.
Knowing the USG, it would not directly redistribute or re-invest these assets into the private sector, thus ensuring a total economic crash soon after.
I think I already addressed this in the part of my post that you passed up. People need to stop worrying so much about what might be fair, and start thinking about what will actually work. History shows that spending reductions are more effective at reaching our goals.
The irony of your statement is that one way or another the middle class is going to suffer. As Crotale rightly points out, taxing the rich more would not be enough. In order to solve things on the revenue side we would have to broaden the base. That means that the rest of us will actually have to start paying taxes.
If we really care about the poor and middle class we must all be willing to experience a haircut now. Otherwise we'll be in the same situation as Greece where the poor and middle class really are getting screwed over.
This is completely avoiding a point. I would absolutely agree that we need to make more spending cuts, but this is not the only way to go about things. Especially when we're living in a time in which income disparity is growing at a ridiculous rate, with the rich getting richer and the poor AND the middle class actually getting POORER in terms of real dollars. Does nobody else think that the majority of the country getting poorer while a very small percentage gets richer has had a negative effect on our country's economy? As Crotale pointed out, if only the richest people are paying taxes, we're gonna get screwed, but if the burden is better able to be shared with a wider base, we'll do better.
The financial sector simply isn't correcting itself, inflating CEO salaries even in the face of gross lack of merit and keeping the corporate boys club together at the expense of workers. As I see it, the way to help our economy is to strengthen the lower and middle classes and if that means that the top earners have to shoulder more of the financial burden, then so be it.
You left out an important part of the equation. The government kept spending money like there was no tomorrow.
Where will this strength come from? Poor/middle class buying necessities for life instead of property (in terms of housing, vehicles, etc) WON'T help the economy. And chances are good that these people will be buying necessities and saving, two things that are great for them but won't make corporate heads more willing to hire people or more willing to invest money.
I know a fair amount of CEOs in the healthcare sector and when taxes have gone up, they go into ultra penny pinching mode (not hiring unless absolutely necessary, not buying property, not buying unneeded supplies, not reinvesting money in crucial markets). They do this even if there is just TALK about raising their taxes. These are the people that are going to give jobs to the group of people you are talking about, and, while I understand where you are coming from, I don't think that putting more financial burden on these people (regardless of the funding the fed would receive from it, and regardless of the fact that they are probably keeping more money for themselves than they should) will improve ANYTHING in the economy. It most certainly won't have the needed effect of getting people without jobs into jobs.
Trends regarding income disparity cannot be disputed, but tax policy isn't going to fix any of that. These are global trends that you just can't beat. Robin Hood tax policy will not solve the fundamental problems with our economy, and it will not create jobs for the middle class. You would generate an insignificant amount of new revenue without solving any of the problems you are worried about.
What I'd really like to know though is how you would implement such a policy. My biggest gripe is that the policy changes I hear wouldn't even hit where people think it would. The super rich make their money from capital gains. Hence simply changing the tax brackets wouldn't change a thing. You'd have to raise the capital gains tax - something that could be potentially crippling to businesses.
and you think raising the rates on the top bracket will achieve this? you're just going to burden small business owners unless you institute a tax on their total wealth.
exactly. these job losses hurt the middle class way more than it will ever hurt the uber rich
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I don't expect tax policy to fix the world (and I say that phrase tongue firmly in cheek) in any way, shape or form. I'm also not implying that we need to screw over the rich for the poor. What I am saying, however, is that cutting social programs that benefit the lower and middle classes is counter productive, and that by doing so, you merely freak the largest section of our society out and lesson their abilities for upward mobility, which effects the taxes they can pay, the items they can buy, the businesses they can establish, etc. By maintaining these necessary infrastructures with taxes on the most wealthy(and I'm not referring to the massive 60%+ rates of yesteryear, but something more along the lines of Reagan), we can help to support and encourage the middle class.
Since the trend in the economy is to further isolate the classes so that the lower and middle classes are increasingly unable to participate in the kind of economy driving investments due to their increasing disenfranchisement, social policies can alleviate the burdens of subsisting so that their disposable income is better able to be saved and invested, which would be a massive boon to the economy.
No, such policies do not single-handedly fix the economy and no, I don't expect taxes to right perceived wrongs in a single fell swoop (I firmly believe that better regulations and spreading of information would be much more effective at that), but they do help to keep the largest segment of the population viable as potential investors in both their own future, but the future of our country.
Taxes are intended to be revenue so that our government can operate. Income taxes are not supposed to be social programs in and of themselves.
Again, not what I'm trying to imply. Rather, I am saying that we should raise taxes instead of cutting back social programs that enable the lower and middle classes to better survive/thrive. We need to reduce our deficit and there are two ways to do so: cut spending and increase income and while I agree that more cuts are necessary, I am saying that because of the increasing class disparities in finances, cutting services would have a much larger detrimental effect on the future of our country.
But that is the issue, continuing to funding these entitlements to the current number of recipients is ludicrous. We have 1-in-4 Americans living full-time off entitlements, with just over a third of the population receiving some entitlements. Those of us actually paying taxes cannot sustain this level of expenditure on entitlements. I keep hearing folks say "Cut Defense" when Defense spending is just about twenty percent, yet mandatory spending on entitlements such as Medicare, Medicaid and Social Security combined take up about fifty three percent of the federal budget expenditures.
Lizard Of Oz
Demented Avenger
So, getting the 1400 millionaires who paid not one cent in income tax in 2009 and mega-corporations like GE and Exxon-Mobil who paid ZERO taxes last year to actually pay taxes is "redistribution of wealth"? Cool.
Speaking of wealth redistribution...
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I'm surprised all of you are discussing this so calmly. Does anyone seriously want the likes of the great depression to happen in this day and age? Oh, and let's not forget the bloodbath of WW2 that followed afterwards.
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