The 2% Illusion

[Rustler]

"President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it. On Tuesday, he left the impression that we need merely end "tax breaks for the wealthiest 2% of Americans," and he promised that households earning less than $250,000 won't see their taxes increased by "one single dime."

This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions."

But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

http://online.wsj.com/article/...?mod=djemEditorialPage

YES WE CAN LMAO


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The above phrase does not constitute original thought/commentary

Senior Anandtech Moderator
Common Courtesy

 

[Genx87]

Anybody watching his rhetoric during the campaign knew it would be impossible to pay for everything he was claiming could be paid for by rasising the tax on the rich. For me it became a joke when people asked how he was going to pay for this program. Obviously, tax the rich!

 

[winnar111]

Like herpes, the top 2% apparently can keep on giving. Every week, Zero pledges their tax revenue to a new cause.

 

[MovingTarget]

No, it will not pay for the programs that he wants to implement. However, it is a good start.

 

[winnar111]

Originally posted by: MovingTarget
No, it will not pay for the programs that he wants to implement. However, it is a good start.

Good start to what?

 

[Fear No Evil]

Originally posted by: winnar111

Originally posted by: MovingTarget
No, it will not pay for the programs that he wants to implement. However, it is a good start.

Good start to what?

Complete socialism of course.

 

[Genx87]

Originally posted by: MovingTarget
No, it will not pay for the programs that he wants to implement. However, it is a good start.

Where does it end?

 

[spidey07]

Why is anybody surprised? He said he'd raise taxes all during his campaign. Go get those evil richies!

This is really only the start to the tax hikes.

 

[frostedflakes]

Yup, no way the top earners can pay for everything. And unfortunately, despite being the fiscally responsible thing to do, I don't think any politician has the balls to either cut spending or increase lower and middle class taxes.

 

[Xavier434]

Originally posted by: Genx87

Originally posted by: MovingTarget
No, it will not pay for the programs that he wants to implement. However, it is a good start.

Where does it end?

We have a good set of checks and balances in place in this country. Part of those checks and balances is a multi party system mixed with libs and conservatives since each have strengths and weaknesses. What we really need is a productive and objective conservative party which is interested in more than putting on a show for America by pretending to be conservative...until they get into office.

Some people may not support Obama which is fine. People have the right to that choice, but at least he aiming for what he promised and is trying as hard as he can to make that happen. That sure as hell beats being lied too about how conservative you are only to turn around and borrow trillions to make up for your attractive tax cuts.

Personally, I am willing to pay more in taxes if his ideas work. That's just me though.

 

[dullard]

He made several promisses during the election:
[*]Cut taxes on those under $200k ($200-$250k was supposed to be mostly unchanged). He did that.
[*]Raise taxes on those over $250k. I have no doubt that he'll do that.
[*]Bring on new spending programs. He'll did that and will continue doing that.
[*]End spending or reign in spending on programs. The whole "smoke and mirrors" hinges upon this aspect. He wants to cut long-term spending while increasing short term spending. I don't know if he will actually manage to do that. And only changes to social security and medicare that can do that. If he slashes medicare and social security payments to meet his goals, then he can pay for the new spending with the tax increase on the 2%. If not, he'll fail. Miserably.

 

[Genx87]

I'd have more respect for Obama if he raised taxes and spending at once. Instead of riasing spending, borrowing, then raising taxes down the road. Like a cheap used car salesman sliding in an unwanted warranty without you knowing until after you get home and reread your purchase agrrement.

 

[Xavier434]

Originally posted by: Genx87
I'd have more respect for Obama if he raised taxes and spending at once. Instead of riasing spending, borrowing, then raising taxes down the road. Like a cheap used car salesman sliding in an unwanted warranty without you knowing until after you get home and reread your purchase agrrement.

Makes sense. However, if it looked likely that the amount of money necessary to spend on the plans was considerably higher by waiting then I might at least consider spending now. Otherwise, waiting could very easily be interpreted as a bad decision wasting tax dollars. It is all speculative of course, but you see my point I am sure. That pendulum swings both ways and the only thing that one can really do is rely on the projections of professionals that you trust to come to a decision. Slippery slope but there is no other way.

 

[BigDH01]

Originally posted by: Genx87

Originally posted by: MovingTarget
No, it will not pay for the programs that he wants to implement. However, it is a good start.

Where does it end?

Slippery slope fallacy. And a worthless one at that. Taxes for top earners in this country have been much higher in the past. If anything, tax rates for these individuals have been trending downward, especially in the last 30 years. If high tax rates for the rich = Socialism (which many uneducated people here seem to think), then surely Conservatives look at the 50s as the golden age of Socialism in the US, correct?

 

[CycloWizard]

As Lincoln said, "You cannot make a weak man strong by making a strong man weak and you cannot make a poor man rich by making a rich man poor." I thought this piece might be enlightening for a lot of people here.

 

[MooseNSquirrel]

Raising taxes on lower incomes during a recession would reek of stark incompetence.

At least now we are getting the true cost of everything we do (ie our wars) unlike the last 6 years where it was "hey were invading 2 countries but don't worry we won't ask you to sacrifice anything".

In the long term everyone's taxes will be raised.

Hopefully we can get rid if this stupid idea of taxing unearned income at a different level.

We can expect 3 things if we ever get out of this recession:

1. Higher taxes
2. Lower spending
3. Universal health care

S&M

 

[winnar111]

Originally posted by: dullard
He made several promisses during the election:
[*]Cut taxes on those under $200k ($200-$250k was supposed to be mostly unchanged). He did that.
[*]Raise taxes on those over $250k. I have no doubt that he'll do that.
[*]Bring on new spending programs. He'll did that and will continue doing that.
[*]End spending or reign in spending on programs. The whole "smoke and mirrors" hinges upon this aspect. He wants to cut long-term spending while increasing short term spending. I don't know if he will actually manage to do that. And there really is only changes to social security and medicare that can do that. If he slashes medicare and social security payments to meet his goals, then he can pay for the new spending with the tax increase on the 2%. If not, he'll fail. Miserably.

Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s. Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility. But no family will pay higher tax rates than they would have paid in the 1990s.

What happened to promises, again?

 

[winnar111]

Originally posted by: BigDH01

Originally posted by: Genx87

Originally posted by: MovingTarget
No, it will not pay for the programs that he wants to implement. However, it is a good start.

Where does it end?

Slippery slope fallacy. And a worthless one at that. Taxes for top earners in this country have been much higher in the past. If anything, tax rates for these individuals have been trending downward, especially in the last 30 years. If high tax rates for the rich = Socialism (which many uneducated people here seem to think), then surely Conservatives look at the 50s as the golden age of Socialism in the US, correct?

Why do you think John Kennedy passed the largest tax cut in history?

 

[Xavier434]

Originally posted by: CycloWizard
As Lincoln said, "You cannot make a weak man strong by making a strong man weak and you cannot make a poor man rich by making a rich man poor." I thought this piece might be enlightening for a lot of people here.

But apparently some people think you can make a poor man rich by making a rich man richer. We've all seen how that has worked out as of late...

 

[CycloWizard]

Originally posted by: Xavier434
But apparently some people think you can make a poor man rich by making a rich man richer. We've all seen how that has worked out as of late...

The fallacy here is that the government can make someone rich or improve their quality of life. Not only is that not what the government is supposed to be doing, they are terrible at it. I saw people here earlier complaining that we should have taxed Bill Gates more rather than let him give 95% of his money to charity - why? Private charity is demonstrably more efficient than government at lifting up the needy and causing real change. Until people realize that government is often the problem and not the solution, we'll continue to circle the drain.

 

[StageLeft]

I love how canceling"tax breaks" is not the same as raising taxes, as if a certain tax rate is written in the bible and anything less is an unnatural tax break.

 

[Ozoned]

Originally posted by: Rustler
"President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it. On Tuesday, he left the impression that we need merely end "tax breaks for the wealthiest 2% of Americans," and he promised that households earning less than $250,000 won't see their taxes increased by "one single dime."

This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions."

But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

http://online.wsj.com/article/...?mod=djemEditorialPage

YES WE CAN LMAO

Receipts for fiscal year 2007 were $2.4 trillion. FY2007 on-budget receipts were $1.7 trillion. FY2007 off-budget receipts were $608 billion. Off-budget receipts include Social Security and Medicare payroll taxes, as well as the net profit or loss of the U.S. Postal Service.

$1.1 trillion - Individual income tax (43.9%)
$869.6 billion - Social Security and other payroll taxes (34.7%)
$370.2 billion - Corporate income tax (14.8%)
$65.1 billion - Excise taxes (2.6%)
$26.0 billion - Customs duties (1%)
$26.0 billion - Estate and gift taxes (1%)
$47.2 billion - Other (1.9%)
Source: preliminary FY2007 year-end estimate from the U.S. Treasury Dept.

The IRS estimated that there were about $345 billion in uncollected taxes, which is sometimes referred to as the "tax gap
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Just double all taxes. All the money the goverment spends goes back into our economy, correct? Back to those that pay taxes, correct?

 

[Genx87]

Originally posted by: Skoorb
I love how canceling"tax breaks" is not the same as raising taxes, as if a certain tax rate is written in the bible and anything less is an unnatural tax break.

Same govt speak as cutting spending when all you do is not raise it at an expected rate. This is a spending cut because we only raised this govt program 3% instead of the typical 7%.

 

[CPA]

Can somebody help me find "paygo". I thought for sure that was the lib's pet last year. Have the put it to sleep?

 

[sciwizam]

Originally posted by: Genx87

Originally posted by: Skoorb
I love how canceling"tax breaks" is not the same as raising taxes, as if a certain tax rate is written in the bible and anything less is an unnatural tax break.

Same govt speak as cutting spending when all you do is not raise it at an expected rate. This is a spending cut because we only raised this govt program 3% instead of the typical 7%.

Gibbs explaining how not spending money is now savings