Obama to propose $1.5 trillion in new tax revenue
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MEGAMANTROTSKY said:
My views regarding the American income tax system are accurate. The president's proposal is targeted at increasing the tax burden on 'wealthy earners' ... sadly I am not one of them ... but this will do nothing to change the other types of taxes in the chart you linked to.
The problem is not how much money is being taken in, its in how its being spent. Also, consider this ... why do we tax income? Why not tax wealth??? The really wealthy people are sitting on billions in the bank, but they only have to pay taxes on their annual income. You want to hit the wealthy and generate some real revenue? Just tax everyone for a percentage of their net worth.
The income tax, as I implied before, is only a part of the American tax system. The numbers you cite are thus selective and misleading. They are constantly utilized by the right wing in order to demonize the poor, much in the same way that you did earlier. Furthermore, Obama's proposal is completely inadequate--even if by some miracle it was passed, it would not even bring the tax rates for the wealthy back up to the levels that prevailed in the first years of the Reagan administration.Hanafuda said:
As for the second part of your response, I can only say that what you're envisioning would require the complete subjugation of the bourgeoisie to the state (this is not to mention that private property does not seem to be touched in your vision). The US state cannot simply be molded into a tool to serve the interests of the people. What you're proposing is impossible under capitalism, because the US state itself is dominated by wealthy and corporate interests. They do not and never will have any interest in such a proposal, due to the fact that the imperialist wars in the Middle East and the Wall Street bailout have increased corporate profits beyond what was being made before, despite the fact that such policies will ultimately bankrupt the masses.
As I said before, Obama is merely posturing with this "increased tax burden"--blowing smoke, as it were. The big business parties will not allow it; he and Buffett both know that such legislation would never be passed. An election year is approaching, which is why he is now pretending to inveigh against the bourgeoisie. He merely wishes to keep his office because he and his administration has been effective at continuing Bush's policies all the while keeping a majority of the population in check...for now. The Republicans do not think that he has gone far enough, which is why they falsely brand every small turn to the left he takes as "socialism".
Edit: Thought I needed to change something, but no. Going to bed now.
This article spells things out pretty clearly. Stick with it. Page 2 gives you a historical context, and page 3 explains how we got where we are.
You'll have a much clearer picture after you read it.
http://www.tnr.com/article/economy/magazin...NTA0ZGNkNmIxNTQ
You'll have a much clearer picture after you read it.
http://www.tnr.com/article/economy/magazin...NTA0ZGNkNmIxNTQ
Yeah, microeconomics isn't macroeconomics. The same rules don't apply.
We're in a liquidity trap -- the Fed generally can stabilize the economy by increasing or decreasing interest rates. Right now we're in a recession and interest rates are essentially at zero. The Fed can't do anything to lower them further.
This is exactly where we were in the 1930s.
Also, Europe/Britain and Japan are facing a similar situation. This is where microeconomics -- comparison to household expenditures -- doesn't help. And the usual spending reduction in order to lower wages and make the US more competitive won't work for this reason.
This is exactly where we were in the 1930s.
The present solution, in the US and Europe, is exactly what was done then as well.
What can we learn from the 1930s, then? Lowering debt and reducing spending will greatly intensify the problem, leading to enormous economic disparity, social unrest, and political upheaval (in the 1930s it led to 20 years of left wing rule in the White House and Congress, and in Europe it led to Hitler and Mussolini).
In the 1940s we saw in the US increase federal spending enormously during the war, as well as increased regulation and a legal barrier separating the banking and finance sectors. Europe and Japan followed suit, giving us all, especially the US, 30 years of expansion, a flattening out of earning disparity, and a rise of the middle class like never before in history.
Since the 1980s we've seen increasing reduction of government oversight, privatization of public services, and the removal of the barrier between the banking and financial industries. What has happened as a result?
We're in a liquidity trap -- the Fed generally can stabilize the economy by increasing or decreasing interest rates. Right now we're in a recession and interest rates are essentially at zero. The Fed can't do anything to lower them further.
This is exactly where we were in the 1930s.
Also, Europe/Britain and Japan are facing a similar situation. This is where microeconomics -- comparison to household expenditures -- doesn't help. And the usual spending reduction in order to lower wages and make the US more competitive won't work for this reason.
This is exactly where we were in the 1930s.
The present solution, in the US and Europe, is exactly what was done then as well.
What can we learn from the 1930s, then? Lowering debt and reducing spending will greatly intensify the problem, leading to enormous economic disparity, social unrest, and political upheaval (in the 1930s it led to 20 years of left wing rule in the White House and Congress, and in Europe it led to Hitler and Mussolini).
In the 1940s we saw in the US increase federal spending enormously during the war, as well as increased regulation and a legal barrier separating the banking and finance sectors. Europe and Japan followed suit, giving us all, especially the US, 30 years of expansion, a flattening out of earning disparity, and a rise of the middle class like never before in history.
Since the 1980s we've seen increasing reduction of government oversight, privatization of public services, and the removal of the barrier between the banking and financial industries. What has happened as a result?
riposte said:
i'd say none. companies are already spending the money they need to make a profit, give them more money and they won't spend any more money. they'll just keep it.
riposte said:
Well that's my point, it's not as simple as tax burden on rich = bad for business and tax burden on poor = good for business. Most small businesses start by selling lots of low value items at a small margin to people who aren't rich. If your neighbourhood consists of two millionaires and 300 people who are too poor to afford even the slightest luxury and even some necessities, that is not good for your business.
If you start a company and spending cuts mean the roads are shit and your employees cars keep breaking down, that's not good for business. Or if unsubsidised public transport is so expensive that its not worth their while to work for the money you can pay them because most of it goes on their commute. Or if they're too ill to come to work because there's no healthcare provision for people on their income. Or if there's not enough emergency service personel to stop your warehouse being looted or burning to the ground.
Likewise, people act like when the government spends money, it vanishes into thin air. If the government pays someone $100 to paint the lifts (edit: sorry, 'elevators') in a government building, its unlikely he's going to take that money on a boat and row to Cuba with it. Some of it will go to the hotdog seller on his lunch break, he'll pay some in taxes, he might give some to a plumber... And at the same time he's not claiming welfare etc.
There has to be a balance, its not just "But if you tax the rich then no-one will bother becoming a millionaire because they'll only get to keep 5 million instead of 7 million, and they won't make any jobs". There's much more to it than that.
The recession plus the liquidity trap plus the European slump means top earners are likely to just sit on their tax breaks and record earnings instead of investing in increased production or hiring new employees.
If, however, you put money in the hands of the bottom 50% -- by public infrastructure improvements, by hiring teachers, etc etc, these people will spend the money IMMEDIATELY for necessities, and this will spur the economy.
By cutting programs that benefit them, like Medicaid, food stamps, etc, which is on the table, you're simply going to worsen the recession.
This is so obvious. That this isn't clear as day means 1) the majority of Americans are easily manipulated idiots, and 2) politicians are disingenuous bastards trying to turn the US into a banana republic.
If, however, you put money in the hands of the bottom 50% -- by public infrastructure improvements, by hiring teachers, etc etc, these people will spend the money IMMEDIATELY for necessities, and this will spur the economy.
By cutting programs that benefit them, like Medicaid, food stamps, etc, which is on the table, you're simply going to worsen the recession.
This is so obvious. That this isn't clear as day means 1) the majority of Americans are easily manipulated idiots, and 2) politicians are disingenuous bastards trying to turn the US into a banana republic.
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