Obama's Repeal Of The Bush Tax Cuts

archer wrote: I find it a little scary that the wealthy in this country are becoming a protected class. We can't ask them to contribute their fair share in taxes because they won't invest, or won't create jobs, or will take their company overseas, or will hide their assets in foreign accounts, or won't buy any more expensive goods. Really?

Talk about a great sales job, somehow the conservatives have convinced not only the politicians, but apparently many Americans, that it's hands off the wealthy......or there will be dire consequences. And they will laugh all the way to the bank about what big suckers we are.......

What percentage do you think the "wealthy" should pay of the total federal income tax burden? Now the top 20% of income earners pay about 86% of all federal income tax (2007 figures). The top 60% pay virtually all federal income tax. The bottom 40% of income earners not only don't pay federal income tax, they on average get money paid to them.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=558&Topic2id=20&Topic3id=22

The top 10% of earners pay 72.7%, the top 5% pay 61% of federal income taxes. How can you say they don't "contribute their fair share"? You are just mouthing the Democratic talking point, and it makes no sense. Just be honest and say you want to tax the "wealthy" more. Fair share my a$$.

Before someone tries to confuse things by tossing in other taxes, we're talking about federal income taxes because it sounds like that's what Obama is proposing to increase.

Now, to tell you the truth, I would agree to some increases to the higher earners. I see no problem putting capital gains back to where they were under Clinton at 20%. But it sounds like Obama is going to propose even more. If he proposes making the rate the same as regular income, I think that would be a disaster. Who'd wan't to take the risk of investing in the economy where you can lose your investment if you can just keep their money safe in the bank instead? I also don't have a big issues with going back to the Clinton tax rates for those making over $250K. In bad times like this I think we need to look at both spending cuts and revenue increases.

But I just don't care for this "pay your fair share" talk. The wealthy already pay a huge percentage of federal income tax.

mittra303 wrote: You know, PrintSmith, I have heard of the Hawley-Smoot tariff many many years ago, but it was part of a comedic routine then and I don't honestly remember much of anything about it (partially because I didn't much care for the guy delivering the piece, but I remember him barking it out over and over). That being said, I am a firm supporter of tariffs leveling the playing field and making it less profitable for companies to outsource American jobs. I also promise to look into the Hawley-Smoot tariff legislation so I can respond to your questions from an informed standpoint.

Smoot-Hawley was a tariff act that raised the tariffs on imports to level the playing field and protect US manufacturing and agriculture that had the result of retaliatory tariffs being levied upon US exports, which destroyed the US export market, which is what caused a recovering unemployment situation in the wake of the market collapse to disappear and reverse. When Smoot-Hawley was passed in the middle of 1930, that's right, after the market collapse, unemployment stood at 7%, give or take. By November of 1930, unemployment was above 11% and within a year it was over 20% and climbing.

If you want to get folks investing in manufacturing here in the US, the number one thing to do is stop giving everyone government debt to invest in instead of expanding businesses. We don't have a capital imbalance with China, we have a trade imbalance. The excess USD that China is getting is being invested in Treasuries because that is a safer investment than a US factory or any other segment of the US economy. China is going to spend those USD somewhere, the question is where will it be spent? We can either allow them to spend the excess USD purchasing federal debt or purchasing US exports - which do you think will help the current economic and employment situation?

mittra303 wrote: And so I ask again.... how many jobs were created as a result of the tax cuts to the wealthy? How did those tax cuts assist our economy? Reduce the deficit? By contrast, how did a measly 3% increase on those same individuals affect our nation's economy?

It is impossible to know how many jobs were created by lower tax cuts, just like it is impossible to know how many jobs Obama out of control stimulus plan created.

But part of the Bush tax cuts were a decrease in the amount of lower income people who had to pay income taxes. Time to bring those back too? It would help the record debt load.

Maybe it is time to look at Herman Cain's plan, 9% income tax on all, 9% corporate tax on all, and 9% sales tax on all. No exemptions, no tax credits, etc.
Instead of the current where 70% of income tax receipts are paid by 10% of the nation's population. Would you prefer 100% of income tax receipts paid by the Top 5% of earners?

My how times have changed.

As promised, I did some checking on Smoot-Hawley. While it may be true that "some economic historians consider the debate surrounding Smoot-Hawley in Washington as one of the factors that led to the market collapse in the first place" the fact of the matter is that it would seem the Smoot-Hawley legislation was/is pretty controversial and not everyone agrees it led to the Great Depression.

According to the US Department of State: "The Smoot-Hawley Tariff was more a consequence of the onset of the Great Depression than an initial cause. But while the tariff might not have caused the Depression, it certainly did not make it any better." (emphasis added)

And the Economic History Association has this to say:

"If there was retaliation for Smoot-Hawley, was this enough to have made the tariff a significant contributor to the severity of the Great Depression? Most economists are skeptical because foreign trade made up a small part of the U.S. economy in 1929 and the magnitude of the decline in GDP between 1929 and 1933 was so large. Table 2 gives values for nominal GDP, for real GDP (in 1929 dollars), for nominal and real net exports, and for nominal and real exports. In real terms, net exports did decline by about $.7 billion between 1929 and 1933, but this amounts to less than one percent of 1929 real GDP and is dwarfed by the total decline in real GDP between 1929 and 1933." (emphasis added)

So how have times changed?

Smoot-Hawley was a Republican created and backed legislation for a Republican President. In fact the Economic History Association reminds us of this event:

"During the controversy over passage of the North American Free Trade Agreement (NAFTA) in the 1990s, Vice President Al Gore and billionaire former presidential candidate Ross Perot met in a debate on the Larry King Live program. To help make his point that Perot's opposition to NAFTA was wrong-headed, Gore gave Perot a framed portrait of Sen. Smoot and Rep. Hawley. Gore assumed the audience would consider Smoot and Hawley to have been exemplars of a foolish protectionism."

HAving read all of this, I am now as confident as I was before that the AJA and the Buffett Tax are still missing critical tariffs to level the playing field for the American Worker. My opinion has changed somewhat, however, in that I would say that those tariffs need to be introduced in a graduated, sane manner and not all at once. We can learn from the controversy of Smoot-Hawley and not suddenly slam the business community with heavy tariffs.

SS109, you're living in a state of denial if you believe even a single job was created by the Bush Tax Cuts. The truth is President Bush and his administration's policies tanked the US Economy. By contrast, in increasing taxes on the wealthy by a mere 3%, President Clinton created a budget surplus that President Bush was able to take advantage of and use for political gain in putting forth the tax cuts that decimated our economy. President Obama was foolish to allow those cuts to not expire.

Capital Gains taxes under Clinton were raised to 39%.

Tariffs against foreign made goods end up being a tax against all of us in the form of higher prices paid for the item. So that is your solution to our problems in the economy? Hmmm!

Do you think that other nations won't raise the tariffs on our goods that we export to them in retaliation for increasing the tariffs on the goods we import from them? Incremental or all at once really doesn't make a difference, does it? If we raise the tariffs on goods imported by a small amount, don't you think the retaliation tariffs on our goods will be larger than the import tariffs we imposed? The retaliation for an action is generally greater than the action which caused the initial offense, isn't it? Isn't that why the retaliation for calling someone a name is a punch in the face; the retaliation for the punch in the face a kick in the groin and so on and so forth until someone pulls out a gun and starts shooting?

Bring it on.

The US used to be the greatest producing nation in the world. Now we're the largest importer and debtor. The only thing the US produces anymore is debt.

Name a single television produced in the United States.

Go to any major store in the US and find products WITHOUT the "Made In CHINA" label. Good luck.

America has always been proud to be self-sufficient and she no longer is. If retaliation by other nations means increasing the price on the items we import from them, then maybe we need to stop importing those goods and start manufacturing them here in the United States at American factories with American workers.

mittra303 wrote: SS109, you're living in a state of denial if you believe even a single job was created by the Bush Tax Cuts. The truth is President Bush and his administration's policies tanked the US Economy. By contrast, in increasing taxes on the wealthy by a mere 3%, President Clinton created a budget surplus that President Bush was able to take advantage of and use for political gain in putting forth the tax cuts that decimated our economy. President Obama was foolish to allow those cuts to not expire.

So tax policy turned the debt around? The giant Dot com revolution had nothing to do with it? Where upstart companies became worth billions overnight, and those employee/stockholders cashed in their shares and paid 39% on those options? And Clinton didn't create a surplus, it was on the way to a surplus, but by the time the Clintons were moving on, the economy was already going south and the dotcoms were failing. The Clinton economic miracle was just a bubble, like the real estate bubble which put Obama in a morass he doesn't have a clue about how to get out.

mittra303 wrote: Bring it on.

The US used to be the greatest producing nation in the world. Now we're the largest importer and debtor. The only thing the US produces anymore is debt.

Name a single television produced in the United States.

Go to any major store in the US and find products WITHOUT the "Made In CHINA" label. Good luck.

America has always been proud to be self-sufficient and she no longer is. If retaliation by other nations means increasing the price on the items we import from them, then maybe we need to stop importing those goods and start manufacturing them here in the United States at American factories with American workers.

I actually think strategic tariffs could be useful. If you punish the industries that do most of the cheating, it will put the others on notice. The Obama administration has been going after some overseas tire suppliers who are supposedly selling under actual cost and offering substandard, dangerous product.
And right now, I think a trade war with China would hurt them worse than the US.