Obama’s tax cuts
December 10th, 2010 at 8:37 am by David FarrarThis week Obama stuck a deal with Republicans which sees him try to revive the US economy with tax cuts instead of extra spending. Labour in NZ should take note. Obama has agreed to:
- Extend the Bush tax cuts for two further years which were due to expire at the end of 2010
- Reduce for one year the Social Security payroll tax from 6.2% to 4.2%
- Increase the threshold for the death tax from $1m to $5m ad reduce the rate from 55% to 35%
It will be interesting to observe the President’s poll ratings in the next month.
December 10th, 2010 at 8:43 am
Unfortunately for Obama, he forgot to strike a deal with Democrats.
Vote:December 10th, 2010 at 8:58 am
He also got a heap of unemployment benefit extensions.
Vote:December 10th, 2010 at 8:59 am
Yes indeed, Graeme.
The reaction is hilarious. It’s taken this long for the hard left to realise that they, like the rest of America, were suckered when they were persuaded to vote for this idiot.
Fact is, Obama got rolled by the GOP. Gave them everything they wanted and got nothing really in return.
Vote:December 10th, 2010 at 9:06 am
Yeah, Obama always wanted to extend the tax cuts anyway, just not for those earning above $250,000.
Vote:But thankfully the republicans stood up staunch for this very needy minority.
December 10th, 2010 at 9:23 am
eszett, ever the idiot, I see. Your so-called needy minority are the only people who can create the real jobs Obama needs – and he knows it. That’s why he caved in.
Vote:December 10th, 2010 at 9:36 am
Call me reckless, but I am picking Obama’s poll ratings will only get worse. Republicans wouldn’t support him if he walked on water and Democrats will now regard him as a spineless sell out. Stick a fork in him, he’s done.
Vote:December 10th, 2010 at 9:37 am
Caved in to what Adolf? Caved in to the pressure of trying to avoid a second dip into recession?
The need for pragmatism?
Vote:December 10th, 2010 at 9:39 am
Lol adolf. They’re suddenly going to start creating jobs because they got a tax cut? Hmm, logic fail. Most likely they’re going to save their money, where it’s nice and useless.
Vote:December 10th, 2010 at 9:46 am
As for what Labour can learn – it depends where you look. National have cut taxes here and are very popular, so that’s one lesson. On the other hand, National has now shot its bolt and isn’t really doing anything else about the economy at all (cycle ways and a financial hub, anyone?) apart from waiting for the world cup. The economy is stagnating and inflation is heading towards 5% or so. So the lesson is maybe – politics can be very unfair. I reckon Obama would probably agree with that.
Vote:December 10th, 2010 at 9:52 am
How about National in NZ takes note?
Vote:December 10th, 2010 at 9:54 am
The resident leftie trolls how infest this site just do not understand that people will not employ other people (taking a huge risk) unless they have some short to mid term certainty. Now they have certainty on their tax regime for two years which is enough to give them confidence to take the risk of employing people.
And as for the dumbarse swt, since when does the continuation of the current tax regime suddenly become a ‘tax cut’?
Do you write at The Standard as well?
Vote:December 10th, 2010 at 9:58 am
Revolt in the ranks.
Vote:The Messiah takes a hit from his own gullible minions: http://www.politico.com/news/stories/1210/46190.html
December 10th, 2010 at 10:01 am
@Adolf Fiinkensein
Read the title of DPF’s post. Clearly this is not The Standard
Vote:December 10th, 2010 at 10:03 am
Entertaining discussion of it here:
Vote:December 10th, 2010 at 10:13 am
I’m glad this thread has appeared because – as is usually the case with things American – what happens in the US has wider implications and meaning for the rest of the world.
The Democrats created this political disaster in the first place when their opposition back in 2001 and 2003 embedded the original sunset clause. Their thinking was that surely by January 1, 2011 the economy would be ticking along to the extent that people would be well enough off not to care that taxes had gone back up? But even as this deadline approached they did nothing for two years while they controlled all arms of government – because they were utterly convinced that the stimulus and the rest would re-start the economy to such an extent that nobody would care about increased taxes.
So now they’re in a no-win situation. Diddums.
I love the class warfare shit that’s going down here: an exact repeat of the $60,000 per year income is rich crap that went on during the 1999 NZ election. The conflation of the likes of Bill Gates and Warren Buffet (not to mention Barbara Boxer, John Kerry and the other richest Democrats) with a two-income family living in any of the major urban centres in the US when the reality is that the former are the truly rich – the ones who can escape any such tax increases, whereas the plain old high-income earners cannot.
That’s the reason why Federal US tax revenues have never exceeded 19% of GDP – even when income tax rates were pegged at 70% plus from the 1930′s to the early 1960′s. You increase the tax on “rich” people and those people engage armies of accountants and lawyers, those that can afford to. The monstrous robber barons squatting on their ill-gotten day-job incomes of $250,000 turn out not to have so much power after all.
Either the Left don’t recognise this or can’t because class warfare is their ultimate reason for existence. But I’m sure they can test this theory out locally by raising income taxes in California and Illinois.
Vote:December 10th, 2010 at 10:24 am
Adolf, ever the gullible, believing the myths of trickle-down effect and creating jobs. They had the tax cuts for the last 8 years under Bush, not much of job creation and trickle-down going on there.
So called minority? How many people make above $250,000 in the US, Adolf?
Vote:December 10th, 2010 at 10:29 am
The Right are just as responsible as the Left for the political and economic mess in the US. While they fiddle to try and score points, the economy burns. So they fight some more. And the economy burns some more.
It may not just be Obama and the Left. It might be the whole country. Diddums, world.
Vote:December 10th, 2010 at 10:32 am
The uber left in yank land are shitting blood, their class warfare dreams have been dealt to by their main man. Barry mos well move back to Kenya, it would probably be safer.
Vote:December 10th, 2010 at 10:36 am
And here’s the chart on tax revenue versus the highest marginal rates:
Reality Isn’t Negotiable
But so what. I’m sure it won’t convince Labour here in NZ or the left in many other places. The next election (and the next, and the next…) they’ll be back pulling the same crap about higher taxes on the “rich” to:
– force them to contribute their fair share to society;
Vote:– compensate for all the money they steal from workers who produce the real wealth;
– stop them hiding the money under the bed where it does no good;
– get the money into the hands of people who will spend it, because spending is what makes an economy grow;
– substitute some pain for the fact that lining them against the wall and shooting them really does not build a better world.
December 10th, 2010 at 10:41 am
The NZ$60,000 bracket is hardly comparable to the US$250,000 bracket. While there is a lot of legitimate criticism of the $60k (and the $70k) bracket being to low in NZ, it is a hardly the same as earning US$250,000 in the US.
Especially not justifiable to make such an uncompromising stand as the republicans did over it. Fuck the rest of the country if the richest 1.5% don’t get a tax cuts extended! No compromises!
Vote:December 10th, 2010 at 10:50 am
While the class fights on the school burns down around them.
Framing it as a class fight, them versus us, right versus left, good versus bad, male versus female is a major part of the problem. It’s easy to keep blaming things on “the enemy”. And it seems impossible for some people to talk towards and work towards pragmatic solutions.
Vote:December 10th, 2010 at 10:57 am
Wouldn’t they have had certainty regardless of whether their taxes were lower or higher?
Vote:December 10th, 2010 at 10:58 am
Because the GOP spent 8 years pissing ever greater amounts of money up against the wall, even as the tax cuts produced the highest ever amounts of Federal tax revenue in US history: thank you President Bush and Compassionate Conservatism.
And of course the left totally disagreed with that because they think that endlessly increasing government spending is bad. Correct?
This is the problem with making snark instead of arguments. Taking that comment to it’s logical conclusion would mean arguing that the GOP should not have fought this issue at all. They should have just let the tax cuts expire as the Democrats always intended they should. The GOP should have just rolled over and accepted that the original argument was correct – that all these hundreds of billions of dollars will better serve America if they’re in the maw of government rather than the hands of greedy, grasping individuals.
That’s what real right-wing ideologues would have done. In fact some are still arguing that that is what they should do. The Democrats are convinced of their economic arguments – then let them wear the consequences.
Thankfully there are pragmatists on both sides of the aisle – although it would be better if the Democrat pragmatists were truly driven by a willingness to compromise rather than the terror of waking up on January 2 to find themselves being held responsible for the largest overall tax increase in history.
We’ll see how pragmatic they are when it comes to cutting Federal spending back to just the levels of the 2007FY – and how true to their “principles” the GOP are. It’s the gigantic spending increases of recent years, not tax revenues, that are killer here. Keeping the tax rates where they’ve been for the last eight years is the first line in the sand.
But I won’t be holding my breath.
Vote:December 10th, 2010 at 11:06 am
Oh please. It’s exactly the same argument – as you already indicated:
..and go on to demonstrate with a precise answer to your own question:
That was exactly the type of argument that Labour made in 1999. That people who made over $NZ60,000 per year constituted only 5% of the population: the richest 5% could afford to contribute more – and if they did not like it then fuck’em. They probably voted National/ACT anyway. Rich pricks.
Vote:December 10th, 2010 at 11:08 am
So increasing a deficit by US$4 trillion or something like that is ok if it pays for tax cuts.
Fucking ridiculous.
Vote:December 10th, 2010 at 11:10 am
Behold, US President: Sarah Palin.
The Republican alternative is just as worse. Face it – America is doomed. I should be learning Mandarin right about now.
Vote:December 10th, 2010 at 11:32 am
As far as the amount of $US250,000 per year is concerned I’m sure our dimbulb journalist class (assuming they report on this at all and don’t just palm it off to clippings from The Independent) will simply translate that into NZ dollars before feeding it into the maw of more class warfare rhetoric.
I’ve no doubt that some louche, 25 year old bond trader living in downtown Chicago on $250,000 per year can roll over the top of the latest bimbo he brought home from Crobar, look at tax increases in the news, yawn, and tell his date that he’ll be voting Democrat next year because he wants to build a better society.
For the couple with two or three kids in Schaumburg, both working as doctors, lawyers, accountants or IT experts, both easily hitting the $250,000 combined level, it’s a vastly different story. And yes, they probably “can” afford it, but they’re not rich in the sense of having vast wads of surplus cash lying around the house – and unlike Bill, Warren, Pelosi, Boxer, Reid and Kerry and the rest of the Democrat tax the rich hypocrites, they can’t escape, which is their real attraction for Democrats.
I know some of those sorts of people. I don’t recall any of them coming from inherited wealth and I’ve not noticed any of them with a Lamborghini or any of the other accoutrements of Lifestyles of the Rich and Famous.
Vote:December 10th, 2010 at 12:02 pm
It’s like the Star Wars line: Don’t get cocky kid
Vote:December 10th, 2010 at 12:29 pm
LOL there’s a valid difference between arrogance and realism my friend, rest assured that I am not cocky. I would like to see America wiggle its way out of the worst economic storm in American history. I would like to see America in command of its international interests. I would like to see China’s influence restricted by American security, etc, etc….
BUT the truth is that this wishful thinking is being outplayed by realism. The ship is already sinking.
Vote:December 10th, 2010 at 12:55 pm
Well, only if you are arguing for a flat tax or a poll tax.
If you accept that there is a progressive tax system then the thresholds do make a difference
Vote:December 10th, 2010 at 1:04 pm
This is actually the position the republicans took. They were prepared to put a higher tax burden on everyone else (the 98.5%) if they didn’t get their way. Fuck the 98.5% of the population if we don’t get the tax cuts for those above $250k.
You are right that it was a no-win situation for Obama and the democrats. They should have just passed the legislation when they could have done so.
Vote:December 10th, 2010 at 1:34 pm
I don’t want to extend the metaphor too far but….. the ship is taking on water, mainly as a result of government created holes that are actually getting bigger.
And while I agree that it may be wishful thinking that US politicians will do anything about those holes I would still bet a democracy of argument and freedom of speech to make fewer bad decisions that are more correctable than any dictatorial nation, even one run by reasonably non-bloodthirst technocrats.
As an example – China’s 20-45 age group, the group that any economy most relies on for economic growth – is set to peak by 2014 and thereafter decline to about half it’s current size (I think) by 2030-2040. That’s somewhat tougher to fix or remediate than Social Security.
The threshold for the richest 1.5% in NZ in 2010 will translate to a dollar figure that is vastly less than $US250,000 per annum. PPP will close the gap somewhat but even so it’s not the dollar amount comparison that counts it’s the proportion of income earners hit by the higher tax. The technical heart of the argument is not the dollar threshold but the proportionate threshold – and even that’s an arbitary figure. I’ll see if I can locate the comment from one of Obama’s advisors where he disclosed that the figure was simply plucked out of nothing for his speeches in 2007 – which is where I think this stupid talking point comes from.
Put it this way – I’d love to see Labour arguing for lower taxes for those earning less than $NZ350,000 per year – but that would hit mean hitting the richest 0.3% probably. Ain’t going to happen – because the philisophical heart of the question is not a dollar figure or a % or even some rational calculation of how much money the state needs.
It’s just the same old class warfare shtick that says that rich people only got that way thanks to the rest of society (see Jeff83 above), it’s not their money, followed by an arbitary line dividing rich from not-rich – and even that is not driven by any real assessment of who’s a rich prick nowadays (Buffet, Gates, Kerry, Boxer,…….) but who can most likely be incapable of fighting or avoiding the system and can thereby be gouged by it.
In any case, given the way the private sector is doing the most likely people to get whacked will probably be government workers in places like D.C. We’ll see if they’re so keen on soak the rich rhetoric next time round. Maybe the GOP should have restricted to tax increase to those earning $US250,000 plus who are on government payrolls. It would make as much sense.
Vote:December 10th, 2010 at 1:43 pm
Actually, thanks to tax cuts and various tax credits, only about 50% of US income earners pay tax on balance. It was one of the things pointed out in 2008 when Barry was doing his whole spiel about tax cuts for 95% of Americans.
I wonder if any Democrat or left-winger has ever done a calculation as to how much money could be garnered from the truly rich if all the loopholes were closed and wealth rather than job-derived income was actually taxed. A rather academic argument I admit given the chart I linked to above – but at least it would get rid of this crap that puts me in the same world as Bob Jones or Joe Blow with Bill Gates and Matt Damon.
If any group is playing “fuck’em” politics here it’s people like Boxer and co who know damn well such tax rate increases won’t hit them. Hypocrites is too weak a word for such left-wingers.
Vote:December 10th, 2010 at 1:47 pm
Ick – Hypocrite !!!!
Vote:December 10th, 2010 at 1:48 pm
My own thinking on the whole tax paying systems is that a progressive system is the most fair because those most able to pay do so. It also has the benefit of making a societies wealth less disproportionate between rich and poor which has implications on crime rates and rates of depression etc. I would say those earning 60k are nowhere near rich and the top bracket should be significantly higher, someone on 60k if they are the only earner in a household with a family is distinctly middle class if you were going to divide it up that way. I would not see the group of rich New Zealanders appearing until probably 150-200k income given our current price levels. Even at this point I don’t necessarily believe they should bear a disproportionate burden at this point (although more than those below them) however when incomes get in excess of 4-500k a year I feel they should bear a disproportionate burden as “rich pricks” as it is so termed because such a pay level cannot be fair. I see them as effectively rorting our employment system. It may be to some degree necessary to run a capitalist society to have people who do that but I do not agree with it. At such point I feel the tax system should be penalising them for it. I understand there are methods they employ that can hide this money but that to me simply implies we need to remove all potential tax loopholes from our system like different tax rates on trusts and the ability to transfer wealth to your children before they are of full age and not be taxed for it. I think a lot of Labour MPs essentially follow this line of reasoning and I can hardly see them taking a firmer line than it given they all earn over 60k.
In terms of the US tax cuts I don’t see it as any big deal Obama is wanting to extend them. The USA major political parties are more the equivalent of ACT and National than National and Labour and you have to kind of expect stuff like this.
Vote:December 10th, 2010 at 2:16 pm
eszett said…
Adolf, ever the gullible, believing the myths of trickle-down effect and creating jobs.
Eszett, stop talking like an illiterate economics idiot. So, trickle down effect is a myth, huh? Where are the published studies that support your misguided assertion here? Quote some here and if you can’t find one, then shutup.
Vote:December 10th, 2010 at 2:24 pm
Funnily i’ve seen several libertarian/right wing sites assert that it’s a myth anyone even pushes the ‘trickle down effect’ beyond delusional left wingers. Don’t ask me to name them because it was a while ago.
Vote:December 10th, 2010 at 2:36 pm
http://www.thefiscaltimes.com/Issues/Taxes/2010/09/17/Bush-Tax-Cuts-No-Economic-Help.aspx
Vote:December 10th, 2010 at 2:40 pm
Cha, great peer review article that you have pointed out. Bush accelerated govt spending during his 8 years in office.
Vote:December 10th, 2010 at 2:47 pm
And interesting quote from that:
Vote:December 10th, 2010 at 2:51 pm
I first heard Douglas talking about trickle down in 1984/5 and I’m still waiting for someone to provide an illiterate economics idiot like me an example of the theory actually working Fala.
Vote:December 10th, 2010 at 3:03 pm
@robcarr “At such point I feel the tax system should be penalising them for it.”
Vote:So you want to penalise someone for being successfull. What does it matter to you what anyone else earns and what they pay in taxes?
December 10th, 2010 at 3:07 pm
Crriiiiiiiiikey. Is OUR tax system this complicated? All I do is submit an application for charitable donation reimbursements, but maybe things get complicated when you’re older…
Vote:December 10th, 2010 at 3:13 pm
“It may be to some degree necessary to run a capitalist society to have people who do that but I do not agree with it. At such point I feel the tax system should be penalising them for it.”
Envy of others, envy of more succesful and talented people, of those who can rise above mediocrity.
Vote:That is what drives the left, as expressed in the pathetic quote above.
December 10th, 2010 at 3:28 pm
Even this can now be automated if you are a wage earner with an employer who is willing to implement payroll giving – if you donate via your wages the charity rebate can be deducted when you pay it.
Sales tax can be very complicated in the US too. It has to be calculated depending on the requirements of the state things are being purchased from – this is determined by destination address Zip codes.
Vote:December 10th, 2010 at 3:37 pm
@robcarr: “My own thinking on the whole tax paying systems is that a progressive system is the most fair because those most able to pay do so”
This sums up the asshatted thinking of the left beautifully. What makes “those most able to pay”, so able to pay more? Either they work harder, or they use what they earn more intelligently, than those who are less able to pay. A progressive tax system punishes those who get off their arses by giving to those who don’t.
If I work my arse off in school to learn, then work my arse off to climb the greasy corporate pole, why the hell should I have to give anything to those who slack around at school, and either decide their career is going to be avoiding work, or working in a job that gives them less than me? I made lifestyle choices and sacrifices to get where I am and to earn what I earn. I deeply resent giving any of it to a government that increasingly uses it for barrels of pork and bribes to those who choose to not make the sacrifices I have.
Vote:December 10th, 2010 at 3:44 pm
Robcarr
Thank you, thank you, thank you.
No really.
I could not have wished for a clearer example of how the average Kiwi (National and Labour) thinks than that long paragraph.
Vote:December 10th, 2010 at 3:59 pm
http://articles.moneycentral.msn.com/news/article.aspx?feed=PR&Date=20101102&ID=12344994
Emphasis mine. I have been trying to track down the actual report of CBO (http://www.cbo.gov), but I haven’t had the time.
Vote:December 10th, 2010 at 4:04 pm
@CJD/Offshore_Kiwi I figured you (by which I mean more right members of the blog) would think that which is why I posted it. Wages do not reflect levels of hard work or intelligence so much as luck and a particular skill range at the top level. If they reflected levels of hard work and intelligence then the levels of pay of most of our key industries would be vastly different. The fact that I don’t perceive wages as directly correlating with hard work is why I see the tax system the way that I do. You both obviously come from a different philosophical background which values a different skills range. I have seen too many people work damn hard for little pay to believe that hard work results in fair pay. There are those who are lazy and thus poorer but they are not a majority and they are a lot more widely distributed than being limited to those in the bottom tax bracket.
Vote:December 10th, 2010 at 4:12 pm
Also from Cha’s link:
higher than it had been during Bush’s father’s administration. So Bush II was less a friend of the bloated rich than Reagan and Bartlett is not arguing that tax cuts don’t stimulate the economy – he’s just arguing that the Bush tax cuts weren’t fundamental enough to do so. Sounds reasonable.
But in short – nothing there that Democrats could use to seriously argue that increased taxes would help the economy – which is why all the smart ones caved. After all, the massive tax increases under Hoover did not work either.
Let’s face, after years of back and forth theoretical arguing about this (Clinton increased taxes and the economy grew casuality comes to mind), when it came to the crunch even Democrats accepted that sucking a few trillion dollars over several years out of the private sector and pumping it into government probably was not going to help the economy.
Wonder if they’ll still accept that when the economy is doing better. Somehow I doubt it as the you can afford it mentality reasserts itself.
Vote:December 10th, 2010 at 4:17 pm
@Robcarr, oh so the reason I am where I am, and earn what I earn, is not because I have put in 60-plus hours per week over many years to become among the best there is at what I do. It’s luck. And before you ask, I started off in a lower middle-class neighbourhood. My mother worked full-time and my father had a chronic disease that often prevented him from working (although he hated this and worked when he was able).
In one way you’re right. Wages are not directly related to hard work. But (for the most part) people choose their paths. I decided early-on that I did not want to be lower middle-class, so I chose to go into a career that afforded me opportunities to become successful. I started off earning less than $15,000 per annum. I took roles and projects that others didn’t want, either because they were considered distasteful or too broken to fix. I worked my arse off to get where I am, so don’t you dare tell me it is down to luck.
I could easily have chosen to take a job in a warehouse, or supermarket or elsewhere. It would in many (not all) ways have been a hell of a lot easier. I don’t begrudge people making those choices. I deeply resent being told they’re just unlucky and I should have to part with my hard-earned because they have made choices different to me.
Vote:December 10th, 2010 at 4:26 pm
Oh god. Seriously? Do these guys not actually know anything about Herbert Hoover. Here’s a hint – he’s the guy who raised the income tax rates on the richest Americans from somewhere in the 20% range to 60%. FDR gleefully took the opportunity to push it to 70% + and naturally was happy to take the credit – as were all the post-WWII New Deal historians who wrote the sort of stuff that Weiner and Saxena had read to them in their cradles.
FFS. Here’s what Hoovy had to say himself:
Hoover intervened to keep prices up, to keep wages up, borrowed to put deficits up, endorsed the Federal Farm Board, and introduced the Reconstruction Finance Corporation (RFC) to prop up failing banks and industries (sound familiar?)
Oh – and then there was fucking Smoot-Hawley which he signed into law – but thankfully Obambi has not gone there yet.
Yeah – that really sounds like a right-winger pushing “trickle-down” – but who knows, maybe he thought the results of all his actions would trickle down.
And then there’s this:
ARRRRRRGGGGGGHHH.
I made this point earlier – if you think that an economy runs on spending then of course this argument makes sense – and god knows the Democrats, Bush, Greenspan, Obama and Bernanke have been putting this idea into action for some time now.
These arguments were being made three months ago and I laughed a lot (and died a little inside): Left-wingers arguing for tax cuts – because it will increase spending. Fabulous.
Vote:December 10th, 2010 at 4:31 pm
@Robcarr “You both obviously come from a different philosophical background which values a different skills range.”
I actually don’t support exploitation of workers or huge differentials in pay. And I agree that payment does not necessarilly correlate with talent/effort. It is almost obscene when you look at what some people have with very little apparent effort compared to others.
Vote:However your use of “penalise” was what got me. We do need to work towards a society where people who genuinley put in the effort are able to get ahead without undue constraint. I have no problem with paying taxes at all. What I would like in return is a good health and education system and a decent retirement. Then what remains can go to helping those in genuine need. However currently I get none of these things because the inefficient governement (Nata and Labour) waste my money. So consequently I require that the government leaves more of my tax with me so that I can sort out my own medical/retirement/kids education requirements. And indeed I would like to give some to those in genuine need.
I support a flat tax with a tax-free threshold for low income earners. There is nothing unfair about such a system-the more you earn the more you pay. No-one is “penalised” for being successfull.
December 10th, 2010 at 4:32 pm
Isn’t it the case in the USA that a small business owner pretty much has to count his/her gross annual revenue (from all sources) as taxable earnings? They can claim back losses etc in a later tax year, but during that intervening period it can cause some bad cashflow situations. I seem to recall this was part of the reason ‘Joe the Plumber’ decided he was actually better off voting GOP back in the 2008 campaign.
Vote:December 10th, 2010 at 4:37 pm
Give it up Offshore: he’s arguing Marx’s Labour Theory of Value – the theory that never dies despite having been buried by economists over a 100 years ago – because it feels true to ordinary people.
Powerful stuff politically, which is why it lives on.
One day somebody should do an analysis of people who believe various Marxist theories without knowing it and who would be outraged if you called them a communist. My bet is 5/10 Americans and 9/10 Kiwis.
Vote:December 10th, 2010 at 4:41 pm
Meant to say in my comment – I think this pushes a lot of people (small business owners) into the $250k+ bracket even though their real income is probably less than half of that.
Vote:December 10th, 2010 at 4:43 pm
I’d say you’re right Tom. Both on @Robcarr and on the 9/10 figure. It just pisses me off when he says I’ve been “lucky” and that I should be “penalised”.
I know I’m the enemy (I am, after all, a high-earning heterosexual white male) but geez sometimes it just rankles.
Vote:December 10th, 2010 at 4:55 pm
They’re called S-Corps and the answer is yes, which is why I took issue with a comment that Adolf made earlier:
This goes back to the Cha link to Bartlett – the difference between tax cuts that are rebates (see Bush early 2008 with a GOP-type “stimulus”, e.g. based on tax cuts – didn;t work any better than the Democrat stimulus based on borrowing) and tax cuts that are fundamental and permanent. As usual Danyl Henniger hits the non-theoretical nail on the head:
Vote:December 10th, 2010 at 5:19 pm
I hold hope this is the Tea Party starting to roll, they’ve ticked two boxes so far:
- Ron Paul in charge of Fed oversight (which hopefully leads to reform)
- Taxes kept low
Next up:
- Massive spending cuts
Vote:- 2013 Inauguration of President Marco Rubio
December 10th, 2010 at 5:28 pm
Eszett I asked you to quote a study ( I mean peer review) and you quoted some experts called Weiner and Saxena. Can you show me which journal that those 2 published their findings? Give me the title of their paper/s, journal name, journal volume, year of publication, etc,… and I will dig it. Find me a published study and not online opinion .
Vote:December 10th, 2010 at 5:44 pm
Borrow-and-spend failed, time for plan B. Leftards take note…
Vote:December 10th, 2010 at 7:32 pm
DADT repeal failed as well.
I wonder if this will end up like Bush Junior’s amnesty or Bush Senior’s tax hikes, i.e. the moment the base fell away.
Vote:December 10th, 2010 at 8:42 pm
Jeremy, under today’s economic situation it seems imprudent to continue advocating against tax increases across the board. One must recall the economic situation faced by Bill Clinton as US President and how he effectively managed to turn the tables around, he did this with the following:
- tax increases
- spending restrictions (fiscal discipline)
- keep interest rates low
- promoting private sector investment
Clintonomics proved that although the US tax payer paid more in the meantime – long term prosperity meant that the entire country was in a prosperous position when it reached the end of the line. Unfortunately, his successor managed to ruin everything many years later.
Vote:December 10th, 2010 at 8:56 pm
Fale, Clinton did that against a completely different global backdrop than the one which exists today.
Today, capital is scarce, lenders are more risk-averse than at anytime in our lifetime. Credit at reasonable terms is very difficult to obtain, in Clinton’s term it was literally growing on trees, thanks to Greenspan dropping the interest rates to near zero thereby amalgamating the dot-bomb bubble into the [as it was then] upcoming property bubble thereby not allowing the dot-bomb losses to work their way out of the system. Today we are paying the price of this folly.
I’m afraid advocating “Clintonomics” as a solution today is like a child advocating a return to their own particular “golden summer” where yes, they had a great time, but unfortunately, they were oblivious to the fact their parents were paying for it because they didn’t even know what money meant.
Idiots look at Clinton as if it was a golden era, it wasn’t. It was poison. Some of us saw it at the time.
Vote:December 10th, 2010 at 9:03 pm
Reid, you make a great argument.
I’m just bewildered by alternative arguments that insist on low taxes, and spending cuts across the board. This will only lead to complete and utter social chaos – particularly for those who depend on government initiatives to survive.
By increasing taxes we tackle the deficit/debt and we sustain as much government capital as possible.
Vote:December 10th, 2010 at 9:54 pm
I know I’m the enemy (I am, after all, a high-earning heterosexual white male)
…even more so if you’re not living, working, consuming and investing in the local economy
Vote:December 11th, 2010 at 1:33 am
Capital in government hands is the problem… Where do you think this money comes from..? By definition it must come from the private sector, the higher the percentage of money in government hands the less there is for job expansion in the real economy…
So by keeping taxes low you fulfill one part of the equation, you keep money in the hands of those who are productive but this must also be met with the fiscal discipline to spend less than one raises, spending in the West has largely grown since WWII, it is now out of control, as Thatcher said, “the problem with socialism is eventually you run out of other people’ money”, we’re there…
Luckily there is a heap of completely wasted government spending that can be eliminated…
This video explains the problems in the UK and how to solve it very well, the problem is just as big (if not bigger in the US):
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December 11th, 2010 at 7:07 am
Good analysis and commentary from the WSJ: http://online.wsj.com/article/SB10001424052748703766704576009943102291486.html?mod=WSJ_Opinion_LEADTop
Vote:December 11th, 2010 at 9:20 am
@polly “…even more so if you’re not living, working, consuming and investing in the local economy”
Don’t make the mistake of thinking for one second that just because I have chosen to advance my career by (temprarily) living and working outside of New Zealand, that I don’t invest in the local economy. Correct, I don’t retail in the local economy, but I do have investments in New Zealand. In fact, as I’m paying NRWT on my New Zealand investments, and don’t take anything in socialist bribes such as Welfare For Fuckwits I probably contribute more than most New Zealand residents to the local economy.
I would love to be able to pick my family up and bring them home. We love New Zealand, and have no family where we currently live. But on what planet does it make economic sense for me to take a 50% pay cut to come home? When we can come back regularly for holidays? The Dear Leader and her hench-lesbians made it quite clear that me and mine are the enemy, so I chose to take my leave. The bilious bitch is dead (well, not quite but we live in hope) but her legacy, quite clearly, remains. Thanks for pointing that out to me so clearly.
Vote:December 11th, 2010 at 9:38 am
Good on you Offshore_Kiwi.
This country is lost to the socialists and will take an almost impossible effort to change the mindset of many of its inhabitants who want everything provided by the state under the illusion is free.
You’re better off working, earning, and saving your money overseas. I can say the same about my two children.
Vote:December 11th, 2010 at 10:21 am
there’s a saying in Pasifikan circles that if you’re not sitting at your post in the meeting house and despite your noble title, you’re opinion isn’t worth shit.
I do have investments in New Zealand and probably contribute more than most New Zealand residents to the local economy.
how so probably… are you trickling down your wealth by creating sustainable jobs or maybe propping up a flagging property and share market ?
I would love to be able to pick my family up and bring them home. We love New Zealand, and have no family where we currently live. But on what planet does it make economic sense for me to take a 50% pay cut to come home?
Uhhh that ‘ll be this planet bro…
…seems you’ve chosen money over love so quit whining about the past and looking to blame previous gov’ts
you do know what the root of all evil is eh ?
Vote:December 11th, 2010 at 11:00 am
@Offshore_Kiwi not saying you didn’t put in hard work but that others put in similar amounts of hard work and don’t make it up to the top because it also requires luck. I am sure you work very hard.
@Offshore/CJD I know you object to the idea of being penalised for success but for me precisely because of how I see the discrepancies in pay levels it seems to me beyond certain levels pay cannot be due to mere success which is why I am not against penalising at that level.
@Tom I have read that particular theory by Marx and I disagree with it. The bourgeoisie as it were do not merely live off the labour of those beneath them in the factory. They also provide crucial roles for our society and work hard. What I take issue with is that I do not see pay levels corresponding with that.
@Offshore I am also a white, heterosexual male and will hopefully be high earning when I finish my second degree it is not any kind of resentment that gives birth to my feelings.
Vote:December 13th, 2010 at 7:19 pm
Trickle down – that’s an interesting one. It depends what is trickling. The implication seems to be that if you let the rich keep all their money – that money will “trickle down” to the masses… somehow.
Now of course the end result is that everyone gets richer, and the rising tide lifts all the boats. But to call that trickle down is erroneous, because it doesn’t describe, economically, what is actually happening.
What actually happens is that firstly, the rich keep all their money. Now sometimes they spend that money on luxury yachts, but most of the time when the rich have extra money, they invest it. This is why we give them tax cuts. Because when they invest money, somebody somewhere who was on the dole gets a job. In that job, they make the rich man even more money,and make more money for themselves. So the money is not “trickling down”. It just gives the guy a job. The money that makes the guy with the job richer, is not the rich man’s money, it’s extra wealth that wasn’t there before. The guy in the job is creating it.
A better way of describing it would be “a stimulus”. Nothing is trickling down. If anything, this guy gets a job and the wealth he creates trickles up!
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