Tax Breaks For The Rich

Tax Breaks For The Rich

Neal Boortz
September 8, 2010

Does the name Peter Orszag ring a bell? He used to be Obama's director of the Office of Management and Budget. That was until a few weeks ago when he left the administration. Then yesterday we get an Orszag Op-Ed in the New York Times saying that we need to extend the Bush tax cuts, even for the filthy rich. Quite a break from policy under his former boss. Orszag writes, "Higher taxes now would crimp consumer spending, further depressing the already inadequate demand for what firms are capable of producing at full tilt."

The White House was completely stunned by the article. Apparently they had little or no idea that Orszag felt this way. Too bad. Sounds like the administration could stand to hear MORE from this guy ... but Obama has already announced that taxes are going up on the rich on January 1st, and that's pretty much that.

But the reaction from other liberals has been entertaining. Take this article from some website called The Seminal. An attempt to combat Orszag's suggestions drew out the typical liberal logic .. I shouldn't even call it logic .. but, well just read it for yourself and you will see what I mean.

Orszag gives us an illogical argument for why we should extend Bush tax cuts for the richest two percent of Americans for another two years but end the Bush tax cuts for everyone by 2013. To get there, Orszag has to ignore both economics and fairness, and use logic and political arguments only when convenient ...

For the thousandth time, tax cuts aren't very effective, and those applied to rich people suck. When the government gives a tax cut -- essentially a gift -- to the richest Americans, they spend proportionally less to stimulate Mainstreet's economy and gamble a lot more on Wall Street's casinos. Everyone should know this by now. Transferring money from the middle class to the rich impoverishes Mainstreet and enriches Wall Street. So retaining lower taxes for the middle class is as much a democratic equity argument to help redress the egregious distribution of wealth to the richest people as it is an economic stimulus plan ...

If Congress allows the Bush tax cuts for the richest Americans to expire, just as current law provides, that will give OMB $700 billion more over the decade to use for much needed economic expansion now -- need a way to "pay" for an Infrastructure Investment Bank that doesn't require you "work with Republicans"? -- or short run enhancements to Social Security, and, if they choose, deficit reduction later.

Re-read that segment. Look at the use of words like "fairness", "gift", and "distribution." These are the ravings of a leftist who believes that wealth is distributed, not earned; that it's not "fair" when someone earns more than another person; and that when you allow someone to keep more of the money they have earned it constitutes a "gift." If you're a Democrat .. this is your logic. Are you comfortable with it?

While we are at it, why don't we go ahead and just impose a 90% tax rate on the wealthy? Think I'm crazy? That's what Robert Reich would like to see!

I fail to see where the gus said that wealth is distributed and not earned. This is just another bias article trying to paint all Democrats as socialists.

BubbleBliss wrote:
I fail to see where the gus said that wealth is distributed and not earned. This is just another bias article trying to paint all Democrats as socialists.

Reading comprehension again?

Neal Boortz wrote:Look at the use of words like "fairness", "gift", and "distribution." These are the ravings of a leftist who believes that wealth is distributed, not earned; that it's not "fair" when someone earns more than another person;

Im not talking about what Boortz said, Im talking about the article he quoted.

Again, you can't (or won't) grasp what he said. He implied "code words" for that.

Why do you do this? You're not even debating the topic. Parsing words, either on my behalf or yours, doesn't cut it.

He didn't imply any kind of words that said that income is distributed not earned. Income is always earned, without that there would be no distribution but I guess that's too much thinking for Boortz.

What's there to debate? Boortz doesn't give any kind of statistics or logical arguments as to why the Bush cuts would improve the economy, so why should I try to refute something he just throws out there?
It's funny how Republicans think that only tax cuts for the rich would improve the economy and increase spending. That's illogical because the rich already have more money to spend compared to middle and lower class people. The rich can already buy plenty of things they want to since they're RICH, but the poor and Middle Class can't do that and are therefore more likely to buy things when they have more money. What's a millionar gonna do with $5000 more a year? Buy more groceries? Buy that flat screen he always wanted?
Oh, I know what's coming now... "So you think they don't pay their fair share of Taxes? Blah blah blah"..... I didn't say anything about increasing taxes on the rich, only about lowering taxes for the Middle and lower class.

BubbleBliss wrote:
He didn't imply any kind of words that said that income is distributed not earned. Income is always earned, without that there would be no distribution but I guess that's too much thinking for Boortz.

What's there to debate? Boortz doesn't give any kind of statistics or logical arguments as to why the Bush cuts would improve the economy, so why should I try to refute something he just throws out there?
It's funny how Republicans think that only tax cuts for the rich would improve the economy and increase spending. That's illogical because the rich already have more money to spend compared to middle and lower class people. The rich can already buy plenty of things they want to since they're RICH, but the poor and Middle Class can't do that and are therefore more likely to buy things when they have more money. What's a millionar gonna do with $5000 more a year? Buy more groceries? Buy that flat screen he always wanted?
Oh, I know what's coming now... "So you think they don't pay their fair share of Taxes? Blah blah blah"..... I didn't say anything about increasing taxes on the rich, only about lowering taxes for the Middle and lower class.

It don't have shit to do with how much money they're going to spend for their toys. That's something that leftists attach themselves to in this argument. It's about jobs. Small business will be affected by these tax hikes and you damn well know it. Why the feck do you think business isn't expanding but has tons of dollars sitting doing nothing? Because they're uncertain with what this gov't is going to do. The economy is in the shitter here. You weren't affected because you were in school. Now you're in Germany. I'm affected and affected big time. Employers aren't hiring and the ones that are, aren't paying much more than $8 an hour or the job is only going to be a temp job (back on the unemployment rolls again).

You liberals just don't grasp economics. There's a growing number of Democrat congressmen in this country that are starting to side with the Republicans on the extension of the Bush tax cuts. Gee, i wonder why that is? You ignore that it was Obama's director of the Office of Management and Budget that started the article off. Convenient.

There's a reason why there's 9.6% unemployment here after 19 months. You'll guarantee it to last another 24 months if we listened to you.

Tax cuts for the rich and tax cuts for small businesses are not the same thing and dont have the same effect. You cant group those 2 together.

Right, we don't grasp economics, that's why Europe's economy isn't nearly as bad as the US economy even with tougher laws on businesses.

Bull. Taxes on dividends will almost double. Any profit they generate becomes dividends to investors. Investors aren't going to reinvest, because they're going to be paying higher taxes.

BubbleBliss wrote:
Tax cuts for the rich and tax cuts for small businesses are not the same thing and dont have the same effect. You cant group those 2 together.

Right, we don't grasp economics, that's why Europe's economy isn't nearly as bad as the US economy even with tougher laws on businesses.

Tax cuts for the so called "rich" ARE tax cuts for small businesses! How on earth you can miss this point is beyond me! The vast majority of small business owners report all income raised by the business on their personal income tax forms because they are incorporated as S-corps or LLC's. Take a small business like a restaurant owner I once worked for. She employed about 20 people in all. Think about that, ALL of those wages, all of the overhead, the property, utilities, food, etc, etc, costs a LOT of money. And ALL of the income created by that restaurant is reported on her personal income tax return. Looking at that without considering what her outlay is would make one think she was one of the evil, despised RICH people whom you think aren't deserving of a tax cut. But guess what, increase taxes on her and that is going to result in someone being let go, because the margins in that business just aren't great enough to afford something like a greedy government wanting more of her hard earned dollars! And this is repeated throughout this country. Small business owners whose income tax returns make them look like the evil, hated RICH are about to see their tax burdens go significantly higher, not just due to the expiration of the Bush tax cuts, but also because of provisions buried in the massive "health reform" bill, which was not about health care, or reform, but about a massive seizure of power from the private sector to the public. And they will also be hurt by the so-called "finance reform" bill, which also had NOTHING to do with "reform" or it would have included the regulation of the genesis of the financial collapse - Fannie Mae and Freddie Mac! And God forbid that he jams through the disastrous "cap-and-trade" bill in the lame duck session of congress. If that passes, we can pretty much kiss our economy goodbye. Small businesses will disappear like dry grass in a fire.

And I'll tell you why the US economy is doing so bad (because I'm not up on the state of Europe's economy, but I'm going to rectify that because I'm not certain you are right about that), it is because of RAMPANT CRONY CAPITALISM and blatant socialism being practiced by our federal government and ESPECIALLY by Obama and his minions on the Hill.

Businesses are petrified of taking ANYTHING even in the same neighborhood of a risk with their money right now. They are under a MASSIVE assault by their own federal government and it shows no signs of letting up anytime soon and so businesses are sitting on their money and hoping and praying that something will emerge in November that will give them some hope that the assault will soon be abated. Obama HATES the private sector and the Democrats legislative agenda which he has fully supported (and in fact more than encouraged) is a naked and vicious assault on the private sector, as noted by what I wrote above.

dblboggie wrote:.....so businesses are sitting on their money and hoping and praying that something will emerge in November that will give them some hope that the assault will soon be abated.

I guarantee that if the House falls into GOP hands, you'll see some business start hiring again (albeit slowly) by proxy of the fact that the Dems won't be able to ram shit legislation thru anymore without any type of compromise.

TexasBlue wrote:

dblboggie wrote:.....so businesses are sitting on their money and hoping and praying that something will emerge in November that will give them some hope that the assault will soon be abated.

I guarantee that if the House falls into GOP hands, you'll see some business start hiring again (albeit slowly) by proxy of the fact that the Dems won't be able to ram shit legislation thru anymore without any type of compromise.

While i would hope that this would be the case, I am not so certain that it will be. After all, we still have to make it through the lame duck session of congress, and the Democrats hold an imposing majority and there are far too many RINO's in the Republican Party to make such a prediction with any certainty. And Obama seems absolutely determined to jam his agenda down the throats of all American's no matter how much they object to it - even to the point of insuring the destruction of the Democrat majority on the Hill and his own re-election hopes. It's as if he is on a political suicide mission for the far-left and he will sacrifice everything to accomplish this objective.

We must not rest until the elections are over and the lame duck session is at an end.

It would appear that nobody wants to debate this anymore. If one has a cognizant argument, then bring it on. Otherwise, it looks to me as though it can't be debated.

I think the use of the word "rich" is a purposely demagogic device designed to invoke a sense of undeserved wealth. "Rich" implies wealth one did not really earn, or was obtained by the exploitation of others.

It is a simplistic term with no nuance, and no real meaning anymore. It has become a match with which to ignite a class war that should not even exist.

When I see a term like "tax cuts for the rich" I look at the person uttering it as a propagandist. Because that is all that it is. It is propaganda from a segment of our society that wishes to supplant free-market capitalism and constitutional republicanism with a more socialist form of government. Giving some of these people the benefit of the doubt, it is possible that they think that governments can bring about "fairness" in social and economic spheres. But nothing could be further from the truth, as history has so richly illustrated.

Life is not fair. It never has been and it never will be. And no amount of government intervention will ever make it so.

What gets me is how i can post gov't data over and over that shows how much the "rich" actually pay in taxes in difference to those who make $200,000 on down and then all i get is how they should pay it "Because they can."

To me, anyone making over $100,000 a year is wealthy. There's been no benefit for the rich paying even higher taxes. It does NOT create more revenue for the Treasury Dept and i have Treasury Dept and IRS data to prove that. Also, it never made my life better when the rich paid more.

Then there's the argument that the gap between the middle class and the wealthy is growing more and more. Gee, i wonder why? Supposedly, the rich get richer is why.

I would submit that if the gap between the so-called "rich" and the middle class is growing (and I am not stipulating that point), then one could point the finger at our imperial federal government and state governments as the biggest single contributor to the shrinking incomes of that middle class. It is the middle class (and all consumers for that matter) that carry the burden of the HIDDEN taxes embedded in the prices of all consumer goods and services as a result of the government's assault on private sector businesses with ever increasing taxes, and regulatory burdens caused by their ceaseless attempts to exercise ever more control over the private sector. Every regulation the federal government enacts carries a compliance cost to those who must follow them. This compliance cost is, by basic economic laws, passed on to the consumer. Every time Washington say "we have to ratchet down" on this industry or that, it increases prices, costs jobs, or lessens investors returns. These increased and hidden tax burdens hurt the middle class and low income households much more than the so-called "rich." But do you see our imperial federal government doing anything about that burden? Of course not. To remedy this injustice would require the surrender of government power to the private sector. And that is not going to happen until the people rise up and force it to happen - hopefully at the ballot box.

Good explanation. The gap is growing but at the same time, i knew there was a reason behind it.

Here's something for our European members here (and lurkers). Our gov't is far more bloated than anything inside Europe. More bloat means more inefficiency. There's a reason why things are better here and other reasons why things are worse here than in the Old Country. The health care bill is a very good example. Why it works in European countries is a far different thing than why it won't work here. It's been pointed out,, posted and proven as to how corrupt our politicians are. It's any wonder this country functions as well as it does. Actually, if our populace were a bunch of mindless zombies, it wouldn't. There's too many fighting back against it and that number is growing.

dblboggie wrote:

BubbleBliss wrote:
Tax cuts for the rich and tax cuts for small businesses are not the same thing and dont have the same effect. You cant group those 2 together.

Right, we don't grasp economics, that's why Europe's economy isn't nearly as bad as the US economy even with tougher laws on businesses.

Tax cuts for the so called "rich" ARE tax cuts for small businesses! How on earth you can miss this point is beyond me! The vast majority of small business owners report all income raised by the business on their personal income tax forms because they are incorporated as S-corps or LLC's. Take a small business like a restaurant owner I once worked for. She employed about 20 people in all. Think about that, ALL of those wages, all of the overhead, the property, utilities, food, etc, etc, costs a LOT of money. And ALL of the income created by that restaurant is reported on her personal income tax return. Looking at that without considering what her outlay is would make one think she was one of the evil, despised RICH people whom you think aren't deserving of a tax cut. But guess what, increase taxes on her and that is going to result in someone being let go, because the margins in that business just aren't great enough to afford something like a greedy government wanting more of her hard earned dollars! And this is repeated throughout this country. Small business owners whose income tax returns make them look like the evil, hated RICH are about to see their tax burdens go significantly higher, not just due to the expiration of the Bush tax cuts, but also because of provisions buried in the massive "health reform" bill, which was not about health care, or reform, but about a massive seizure of power from the private sector to the public. And they will also be hurt by the so-called "finance reform" bill, which also had NOTHING to do with "reform" or it would have included the regulation of the genesis of the financial collapse - Fannie Mae and Freddie Mac! And God forbid that he jams through the disastrous "cap-and-trade" bill in the lame duck session of congress. If that passes, we can pretty much kiss our economy goodbye. Small businesses will disappear like dry grass in a fire.

Sure, those small business owners are part of the 'rich' class, but so are doctors, people in upper management, owners of large companies, and all kinds of other people who are NOT small business owners. I'd think that most people who make more than 250,000 a year are NOT small business owners but are in fact some of the things listed above. You make it sound like this tax hike is for small business owners only, when it's not. I'd be all for tax breaks on small business owners, but ask Tex about his uncles farm that ends up paying NO taxes whatsoever. Still, I think tax breaks for small businesses and an increased ability to get financing are something that would help the economy.

This about sums it up, I believe:

http://money.cnn.com/2010/09/08/smallbusiness/small_business_obama_tax_breaks/index.htm

And while Fannie and Freddie certainly contributed to the financial collapse, it was not the only, or the biggest reason. Financial speculation, shady investments and the doubling of oil prices certainly contributed just as much.

dblboggie wrote:

And I'll tell you why the US economy is doing so bad (because I'm not up on the state of Europe's economy, but I'm going to rectify that because I'm not certain you are right about that), it is because of RAMPANT CRONY CAPITALISM and blatant socialism being practiced by our federal government and ESPECIALLY by Obama and his minions on the Hill.

You really must have no idea what Socialism even is, otherwise you wouldn't be saying such flat out false things. If you think that health care reform or bailing out GM and the major banks is Socialism, then I really can't help you and I doubt anybody can.

dblboggie wrote:

Businesses are petrified of taking ANYTHING even in the same neighborhood of a risk with their money right now. They are under a MASSIVE assault by their own federal government and it shows no signs of letting up anytime soon and so businesses are sitting on their money and hoping and praying that something will emerge in November that will give them some hope that the assault will soon be abated. Obama HATES the private sector and the Democrats legislative agenda which he has fully supported (and in fact more than encouraged) is a naked and vicious assault on the private sector, as noted by what I wrote above.

How exactly does Obama hate the private sector? Because he bailed out the banks and GM? Because he promised tax cuts for small businesses? Offering more hiring credits to companies?

BubbleBliss wrote:

dblboggie wrote:

BubbleBliss wrote:
Tax cuts for the rich and tax cuts for small businesses are not the same thing and dont have the same effect. You cant group those 2 together.

Right, we don't grasp economics, that's why Europe's economy isn't nearly as bad as the US economy even with tougher laws on businesses.

Tax cuts for the so called "rich" ARE tax cuts for small businesses! How on earth you can miss this point is beyond me! The vast majority of small business owners report all income raised by the business on their personal income tax forms because they are incorporated as S-corps or LLC's. Take a small business like a restaurant owner I once worked for. She employed about 20 people in all. Think about that, ALL of those wages, all of the overhead, the property, utilities, food, etc, etc, costs a LOT of money. And ALL of the income created by that restaurant is reported on her personal income tax return. Looking at that without considering what her outlay is would make one think she was one of the evil, despised RICH people whom you think aren't deserving of a tax cut. But guess what, increase taxes on her and that is going to result in someone being let go, because the margins in that business just aren't great enough to afford something like a greedy government wanting more of her hard earned dollars! And this is repeated throughout this country. Small business owners whose income tax returns make them look like the evil, hated RICH are about to see their tax burdens go significantly higher, not just due to the expiration of the Bush tax cuts, but also because of provisions buried in the massive "health reform" bill, which was not about health care, or reform, but about a massive seizure of power from the private sector to the public. And they will also be hurt by the so-called "finance reform" bill, which also had NOTHING to do with "reform" or it would have included the regulation of the genesis of the financial collapse - Fannie Mae and Freddie Mac! And God forbid that he jams through the disastrous "cap-and-trade" bill in the lame duck session of congress. If that passes, we can pretty much kiss our economy goodbye. Small businesses will disappear like dry grass in a fire.

Sure, those small business owners are part of the 'rich' class, but so are doctors, people in upper management, owners of large companies, and all kinds of other people who are NOT small business owners. I'd think that most people who make more than 250,000 a year are NOT small business owners but are in fact some of the things listed above. You make it sound like this tax hike is for small business owners only, when it's not. I'd be all for tax breaks on small business owners, but ask Tex about his uncles farm that ends up paying NO taxes whatsoever. Still, I think tax breaks for small businesses and an increased ability to get financing are something that would help the economy.

This about sums it up, I believe:

http://money.cnn.com/2010/09/08/smallbusiness/small_business_obama_tax_breaks/index.htm

And while Fannie and Freddie certainly contributed to the financial collapse, it was not the only, or the biggest reason. Financial speculation, shady investments and the doubling of oil prices certainly contributed just as much.

But don’t you see, even the article you cite agrees with me. Businesses don’t need more tax BREAKS. A tax break is only useful if the targeted businesses spend the money the way the government wants them to! It is the federal government dictating to businesses what spending will be rewarded and what spending will be punished! This is NOT the way to stimulate small business expansion! Tax CUTS mean that the business can spend the extra money gained by the cut in any way they see fit. It is freedom oriented. Tax BREAKS are not freedom oriented, they are aimed at maintaining or increasing government control over decisions made by businesses – this is the opposite of the basic principles of free-market capitalism.

And I think you misunderstand the impact that the Community Reinvestment Act (CRA) had on this whole collapse. I don’t think you are seeing the chain of events that this legislation kicked off. Sure, it was the first domino to fall, but it was inevitable that that single event was going to topple all the other dominos linked to the home lending industry, including banks, financial investment firms, and the financial speculation that this fostered the whole ball of wax.

I will try to explain what I’m talking about, because I can see it all very clearly in my head, but I can think a hell of a lot faster than I can type, and it requires a good deal more exposition than I have given you above.

It goes like this. First, the federal government passes a law that forces banks to make bad loans. This is what the CRA in essence mandated – that banks, if they wanted stay in business and grow, had to make loans to clients who in a sane market would never be given them because they were not sound financial risks. Now, you have to understand what the next very obvious move is going to be by a bank forced to make loans to people who common sense says are very likely to default on them. They are going to want to move that paper off their books as quickly as possible. The CRA, by virtue of forcing banks and home lenders to make unsafe loans, guaranteed the creation of the many financial instruments that bundled these shaky loans and then sold them to other financial institutions and speculators. And then human nature did what it always does. BUT the thing that set ALL of this in motion, was the federal government trying to force an agenda (everyone having a piece of the American dream by owning a home of their own – whether they could actually afford it or not) down the throats of the private sector by legislative fiat! Then they compounded this grievous mistake by making it look as though Fannie and Freddie (who were buying many of the bundled loans and instruments and then selling them to financial institutions) would have the full backing of the federal government if the wheels came off, giving the buyers of these instruments a false sense of security... and to then to add injury to insult, the federal government – in it’s infinite wisdom (and despite proven illegalities being committed by these institutions) – decided that Bush and McCain were wrong and that Fannie and Freddie did not need tighter government oversight. So then when the wheels finally came off, as anyone with a shred of common sense could have predicted, who does the government attack? Why the very institutions that they FORCED to make the bad loans in the first place.

So yeah, you can blame the collapse on the greed of unscrupulous investors and speculators, and yes, these things did obviously play a role in the collapse, but the thing that even made this possible was BAD LEGISLATION – legislation that tried to interfere in the free market to make it do something that was not good business! And do you see any of those legislators accepting their responsibility for this mess? NO! NO you DON’T! Instead, they are pointing the finger at the very people they so egregiously damaged with the CRA in the first place.

BubbleBliss wrote:

dblboggie wrote:And I'll tell you why the US economy is doing so bad (because I'm not up on the state of Europe's economy, but I'm going to rectify that because I'm not certain you are right about that), it is because of RAMPANT CRONY CAPITALISM and blatant socialism being practiced by our federal government and ESPECIALLY by Obama and his minions on the Hill.

You really must have no idea what Socialism even is, otherwise you wouldn't be saying such flat out false things. If you think that health care reform or bailing out GM and the major banks is Socialism, then I really can't help you and I doubt anybody can.

First of all, let’s get one thing straight. The federal government didn’t “bail them out” – the federal government BOUGHT CONTROLLING INTERESTS in these companies! That is not “bail out” that is a TAKEOVER!

So let’s see what we’ve got here. First, the federal government now owns General Motors, with a 61% share in the company – government ownership of the means of production. Then the federal government owns a controlling stake in Citigroup – government control of a previously private sector business. The federal government also owns AIG, an insurance company that was formerly private; more government control of a private-sector business.

Actually, I could go on writing about all the companies that the government has an ownership stake in, there are over 500 of them. But I think you get my point. If that’s not socialism, then I don’t know what is. Now, does this mean that we are a “socialist” state in the most literal sense of that term? Of course not. But Rome was not built in a day as the old saying goes. And this country has implemented every plank outlined in the Communist Manifesto (said planks being the necessary transitional steps to move a capitalist economy toward a communist one) to one degree or another. I have listed these before, and how our country has implemented them.

Gradually and by slow operations (or not so slow under Obama), this country is creeping ever closer to government control of the means of production in this country, either through intrusive regulatory schemes, or by outright ownership.

If nothing else, we certainly cannot label what we have here as free-market capitalism; though we have a heaping helping of crony-capitalism thanks to the federal government progressive income tax on businesses and their massive regulatory schemes.

BubbleBliss wrote:

dblboggie wrote:Businesses are petrified of taking ANYTHING even in the same neighborhood of a risk with their money right now. They are under a MASSIVE assault by their own federal government and it shows no signs of letting up anytime soon and so businesses are sitting on their money and hoping and praying that something will emerge in November that will give them some hope that the assault will soon be abated. Obama HATES the private sector and the Democrats legislative agenda which he has fully supported (and in fact more than encouraged) is a naked and vicious assault on the private sector, as noted by what I wrote above.

How exactly does Obama hate the private sector? Because he bailed out the banks and GM? Because he promised tax cuts for small businesses? Offering more hiring credits to companies?

See above.