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Saturday, September 24, 2011

Making the case for fair taxation

Not class war fare

Honestly,the Democrats can never convince a country that is struggling from a stagnant economy; that their policies have worked. The policies were working until April, when the Greece economy hit rock bottom, and the tsunami-hit Japan but Americans don't want excuses and who can blame them.The country does not want nuance ;they want jobs and improvement. The only alternative is to make their side, the lesser of two evils, metaphorically speaking.

The liberals are ecstatic because President Obama is starting to show the same passion that he used in the 2008 campaign election.It may be too little too late, but he is calling out republicans by name and is no longer trying to extend the olive branch, which has been knocked out of his hands every time he has tried it. The president is showing up in Republican districts and giving his audience their representative's phone number, so they can call to have their bridge repaired. Since that is a ground level approach, it normally would take a little time to show results but not this time, voters in Seattle, Chicago, and elsewhere have been hanging large banners reading “Fix this bridge."The president has until the end of the year to make his case because next year the attention will turn to the alternative.

That next step is to take back the message that the Republicans have controlled for centuries. The democrats must explain that the budget will not be balanced if we only increase taxes on the rich, but they should be raised and asked to to pay a little more, rather than put the whole burden on the overextended middle class. The Republicans will fight back saying that taxing the achievers (job creators) would be counterproductive ,because it would cause them to recoil and quit hiring the unemployed. If you listen to people like Mark Cuban, Warren Buffett and the CEO of GE Jeffery Immelt, nothing could be farther from the truth. Ideally, they want more certainty from Washington on regulation and taxation, so they can adjust over the years. I'm reading Ron Suskind's new book called “Confidence Men" where he asked a CEO from Wall Street why he thought President Obama was bad and indifferent towards them. The CEO said that they sensed a weakness in the administration, because every time Wall Street cried foul, the administration would pull back and give them more goodies. The CEO said that they would continue doing this because it's working.

Democrats must learn that we cannot get the whole enchilada at one time, perhaps they should just settle for getting hedge fund managers to pay tax on their income at ordinary rates rather than the 15% for capital gains rate. The Democrats should be for tax reform but must continue to be against the flat tax, fair tax, or a consumption tax that will favor the wealthy and hurt the poor, in this period of inequality. When the lines between the wealthy, the middle-class come closer together, then it would be an appropriate time to devise some sort of a flatter tax that's simple and fair. To do that in this economy, will only benefit the rich. Remember, the wealthy can benefit in a bad economy because they're the ones that are buying up the hotels, residential homes, businesses, and other assets to sell when the economy improves.


Mike said...

This blog is about economics,so if you don't mind let's finish our discussion here.

As I have stated many times the WH thought the stimulus would help boost the economy and as Christina Rommer said unemployment would never get above 8.1 % but she was wrong..The stimulus only had three GOP votes (keep that in mind) but it did create the environment for an additional 2 million jobs but it was nowhere near enough..That was a jobs bill and throughout the three years there has been 16 business tax cuts....I think I understand that more emphasis for the inner cities should have been made. I agree, but consideration was given to the working poor with extenuated unemployment benefits and an increase in food stamps and the health care bill made Medicaid more accessible...Do you honestly think the GOP would have voted for extra grants or funding for the the inner cities?

The other night during the debate it was said that we bring in $6 billion a month and spend $10 billion..The debt is $14 trillion,now take another 15% off spending and you then you still have revenue @ $6 billion and now spending @ $8.5 billion but still a long way from getting rid of debt and those layoffs will now add to the 14 million that are now employed....Congress knows how to get the numbers we need but as you say ,politics and differences in ideology keeps them from making good decisions...The Bowles-Simpson plan would calm the markets and would satisfy and anger both parties but it would go a long way in solving our problems.

Now,we spend $2 trillion a year on health care but we are steadily paying too much and not getting the bang for the buck...History will vindicate the Dems for health care...Social Security and Medicare had the same problems initially.

Mike said...


As for your personal wants and thoughts about serious personal posters.
You say that you and John Lara represent the group with solutions and those seeking answers.You because some have asked you to run for office.

It's always about the totality of the poster not about few selected comments and being asked to run for office is a view held by those who asked you to run and not to be mistaken as a general consensus...After all ,a certified nut case ran for mayor;perhaps someone encouraged him....I'm not comparing you to him.

Some people just want to make a comment to have a say BigJ, and sometimes they just want to have fun....I wouldn't waste a whole lot of time waiting for the solution to fix the world's problems coming from the VA Forum because we are mere mortals,cannot vote or have influence...We mere state our opinions and the viewers neither ignore,critize, or agree with them...Nothing more nothing less.

Mike said...

I opened up this thread to continue my debste with BigJ but anyone can join...I'm sure II can learn from others if I've made some comments others disagree with.

Legion said...

I don't think any one person has the answer to cure our woes.

Trickle down, stimulus, public works projects,bailouts, all have been tried and found lacking. Some of them might have treated the symptoms but not the disease.

On healthcare, to me,one glaring problem is the cover your ass syndrome.(And no tort reform won't cure it). You go to a doctor, he orders tests, some are expensive, he refers you to a specialist, he orders the same tests plus some more.

The hospitals and clinics in their zeal to up their ratings, just have to buy the latest expensive piece of test equipment that comes down the pike, never mind that a new and better one will be made in 6 months or a year from now, and the hospital will just have to have it. Doesn't that sound like a consumer that just HAS to have the latest version of a smartphone ect.?

I agree a VAT would impact lower income people much more than high income earners, the percentage of tax paid vs. income don't ya know.A flat income tax would have the same effect.

The main thing about Justins proposals, that no one has mentioned, is to open up drilling in federal areas and put the profits towards reducing the deficit. Does he mean to say to nationalize the oil industry? Or for the federal government to start its own explorations/drilling/marketing company to compete with the public sector?

That would really open up a slippery slope.

Mike said...


Growth is our only solution at this point..TARP kept Wall Street from completely falling taking the rest of our economy with it.Stimulus kept us from a depression but as you say we have run out government solutions..Only thing is,one of best trading partners ,Europe is in worse shape than we are.I'm watching this show where some solar panels companies were making great strides when China flooded the market with cheaper panels taking the US out of competition.  We can't compete with countries that heavily invest in their private sector market. They already have cheaper labor,lax environmental laws,and regulations....

Duplication in health care is a big problem but I think we should have the newest and best more expensive machines ,just not as many of them...A city the size of Victoria could get by with 3 stand up MRIs ,yes it might be crowded but it will cost effective.
The movie "Forks over Knifes" spells out our health care problems as being too dependent on medication and not enough on wellness,diets, and exercise. We are an older generation that has overindulged in bad habits. A simple thing like the food groups needs to be revised and preventive medicine is cheaper than treating stage 3 cancer.

I agree if Exxon pays for the leases,the profits are theirs...You saw how ineffective  the government was cleaning oil spills,no that's best left to the experts...We can lower the deficits with jobs.But we need to get the job market going before we work on the deficit or debt because you can't do both.

I believe the progressive tax system we have is ok for now but is in need of some serious reform. I agree with the majority of dropping the rates,cutting out the loop holes,subsidies,and certain deductions will work for now to level the playing field.

Just my opinion, but I think if adopted the bipartisan Bowles-Simpson,a level of confidence (can't measure that) would calm the consumer,business, and Wall Street,thinking we NOW have a plan that just might work. All these political games and uncertainty is making everyone weary.