Elections have consequences

Even taxing the very rich isn’t enough for Obama. He’s already rejected the Republican leadership cave-in because he wants to hit the upper middle class and he wants to hit them bad. Given the huge number of liberal upper middle class families in the tri-state area who gave this man and his fellow thrives their vote, I can see the humor here. Too bad those compassionate, self-sacrificing families have dragged the rest of us into their utopia – some people have mortgages to pay and children to put through college.

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68 responses to “Elections have consequences

  1. Anonymous

    Obama’s persecution of and war on the kulaks.

  2. JRH

    Your ability to isolate yourself from reality never fails to impress. The president’s offer was no change in marginal rates for AGI under $400,000, and reversion to Clinton-era marginal rates on marginal dollars over AGI of $400,000. Wake up and realize your president is an Eisenhower Republican.

    • $400,000, actually, as of yesterday, when he upped it from $200,000. I say let’s hold hands and jump off the ledge, a la Mel Gibson in Lethal Weapon.

    • Anonymous

      No, he’s a lying Alinskyite Marxist Muslim, who’s political career was launched by a person who advocated shooting American schoolchildren, BIll Ayers.

    • Inagua

      JHR is correct that Obama is an Eisenhower Republican with respect to tax rates. But does that make Obama correct? Please remember that the low tax rate advocate of the Eisenhower Era was John Kennedy, and subsequent events have shown Kennedy to be right and Eisenhower to be wrong.

      • JRH

        Uh, right, and the tax rates Kennedy called for and signed into law were many times higher than the ones called for by Obama. So the point is what exactly?

        • Well one point is that the economy improved.

        • JRH

          So you’re conceding that economic growth is possible with much, much higher marginal rates than we have now and than what Obama is proposing.

        • So the Democrats, in at least their lip service towards avoiding the fiscal cliff, admit that taxes retard growth?

        • JRH

          Not sure what point you’re making. Of course taxes at a certain level retard economic growth, which is why Kennedy brought down top marginal rates from the 90s to the 70s, and corporate rates to just below 50. I’m not arguing for reinstating rates at anything like those levels, and neither, of course, is Obama or any marginally influential Democrat. But you can’t flaunt the JFK tax cuts and say they led to growth without conceding that we had economic growth with much, much higher marginal rates.

        • But Peg’s right, the effective tax rate was lower than present. No one paid 90% under Eisenhower nor 70% under Kennedy. Speaking of Eisenhower, can we get your vote for repealing the Eisenhower Tax Cut he granted to the entertainment industry, freeing them from a 20% excise tax on gross revenue? The Treasury would be awash in money and the rest of us could be entertained by a repeat performance of that great 1950s appearance before the Senate by Hollywood stars testifying to the damages cause their industry by high taxes. A win, win.

        • JRH

          No, she’s not. For middle-income families, effective tax rates are at historic lows. Effective federal tax rates for households with incomes over $1m have also plummeted. Effective tax rates for every income quintile are falling, not rising.

    • Anonymust

      JRH you are delusional

      Clinton may have been a moderate, and he showed exactly what compromise looked like in his negotiations with Gingrich et al in a very similar situation

      Obama lumps savings from future debt cost as “spending cuts”, so if 100% of deficit reduction were to come from higher tax rates he would say that he cut spending dramatically; with leadership like this, how will we ever get on a solid fiscal footing?

  3. JRH

    By the way, I’m still in the moderated comment reserve tank? Ouch.

    • Cos Cobber is too, and also for no good reason.Still uncertain how to fix it.

      • Inagua

        There are good reasons to keep JRH moderated. He can only take pot shots. He is incapable of defending his positions. And he doesn’t provide comic relief like his fellow Leftie Dollar Bill.

        • JRH

          You’re a real charmer, Inagua. Incapable of defending my positions? That must explain the hours of time spent arguing with you here. Choosing not to continue an argument is not the same as being incapable of defending your positions, unless you’re admitting that your loony argument about the constitutionality of poll taxes and literacy tests was wrong?

  4. Peg

    JRH doesn’t seem to understand that ultimately, it’s not the rates that matter but what people have to pay to the feds. Back when Eisenhower was president, there were half a jillion items that could be deducted. “The rich” pay a higher percentage of overall taxes today than they did when Eisenhower was at the helm.

    • JRH

      Peg, that’s simple math: the rich pay a higher share of federal income taxes today because wealth is more concentrated today than it was during the Eisenhower Administration.

      • Wrong, JR – remember the railcar glut? Just one example of how high tax rates distorted economic investment while reducing the effective rate of taxation below what it is today. The “concentration of wealth” you mention doesn’t explain why 47% of Americans pay no federal income tax at all. If they had even a bit of skin in the game they wouldn’t be so cheerfully urging their allies in crime along.

        • JRH

          47% of Americans pay no federal income tax because of policies favored by liberals and conservatives alike, namely the Reagan-expanded Earned Income Tax Credit (for which you must work for a living to qualify) and the Bush-expanded child tax credit. More than one in five of the 47%-ers pay no federal income tax because they are elderly and not taxed on their Social Security insurance benefits. Of course, these 47%-ers pay payroll taxes on every dollar of their income (unlike the upper middle class and the wealthy), and they pay state and local taxes, which, unlike the federal tax code, are in general regressive in their incidence.

      • Inagua

        JHR – Your post about the 47% is a classic example of your inability to make a sound argument. You skirt the subject by stating that the policy has bi-partisan support; you make a wild charge about social security beneficiaries similar to your silly 40% gun exhibit claim; and you cite payroll taxes, which are contributions to insurance schemes, as skin in the game, which they are not. I suggest that after law school you avoid the private sector (unless you are interested in PI work) and see employment with either the government or some advocacy group, as your reasoning skills are just not yet up to private sector standards.

        • JRH

          Hey, buddy: it’s not a “wild charge” when it’s true. More than one in five of your 47% are elderly, and yes, the reason their federal income tax liability is zero or below is because of their SS income. Your inability to respond to inconvenient arguments was demonstrated when you quietly stopped arguing for the absurd proposition that disenfranchising half the country was constitutional, and again here, where you fail to grapple with the fact that nearly all of the 47% pay regressive state and local taxes. I supposed I could be offended by your unbecoming condescension, but I take it as a complement that you feel the need to resort to childish name-calling when I disagree with you.

        • pulled up in OG

          Guess that dyslexia cure only lasted one post, eh?

        • pulled up in OG

          Bush tax cuts responsible for about eight million of that 47%.

        • Inagua

          JHR – I apologize. You are right and I was wrong. I didn’t realize that so many members of the wealthiest age cohort shirked their federal fiscal responsibilities like I do. I really though I was one of the very few. Sorry.

  5. ML

    Question: When marginal tax rates were in the 70’s or higher, how did people avoid paying that? I am just confused because as a W2 high income earner, I get absolutely killed with taxes. There is no option to defer income or expense normal non-reimbursed expenses that I incur in running my business, nor do I earn “carried interest” (which is a complete joke BTW). I am confused and looking at ~45%+ marginal tax rates in the face!

    • ML, I mentioned the rail cars because it was a rather classic example of the tax shelters of the era (and continuing well into the 80s, not that they’re all gone now). You bought a rail car, got a huge deduction and promoters were supposed to them for a profit. They didn’t, of course, and we ended up with tens of thousands of idle, empty rail cars growing weeds on disused side tracks, totally unproductive. I have no idea whose pet project that was but Congress went along with it, and hundreds of other schemes, all to the national detriment.

      • kc

        CF, I do remember the rail car shelter. I think that I was offered a box car or some percentage thereof but, luckily, it didn’t excite me unless I could put my name on the side of the car with some forward looking railroad slogan. As I was not looking for a tax shelter, it was primarily marketed to me as a potentially profitable investment but, being a simple sort, I just couldn’t understand all of the angles and decided that if I believed in a road’s future, I’d be better off buying the stock. I suppose that we will start to see rumblings along these lines again because there are some savvy taxpayers out there who can remember the way to the tax lawyer’s office. I’m not an economist but this just doesn’t seem to be the best way to maximize productivity to me.

    • JRH

      ML, however hard you feel hit by federal income taxes, your effective federal tax rate is certainly lower than 45%.

      • The total tax burden, JRH, and I realize the discussion is about federal, not all taxes, is pretty onerous when you add in 15% Social Security tax for the self-employed, Medicaid, 6.5% Connecticut, and local property taxes, then pay gasoline taxes, sales taxes etc. etc. (which of course all people pay), and it piles up – Over 50%, for sure. Then there’s rent or a mortgage, college tuition, food, and nonsense like that and pretty soon a two-income family earning $250,000 – hell, even $400,000, after yesterday’s change of heart by our Plunderer in Chief – doesn’t feel like one of the guilty rich here in God’s country.

        • JRH

          Sure, the total tax burden will be higher, but I’m not sure you’re right about it being over 50%. For one, not all of it is cumulative: if you’re paying the highest marginal rates, then you’re also deducting your state and local taxes (as well as your mortgage interest payments, and an amount of the tuition expenses you mentioned). Gasoline taxes and sales taxes, yes, but of course those fall much more heavily on people with less money who are paying far below the highest marginal federal rate than they do on the poor $250,000-400,000 family. In order to have that $250k AGI, your two-family household will be making closer to $300,000. Maybe you don’t feel like Donald Trump at those levels, but you’re making far and beyond the median income even in Greenwich, where it’s well below $200k.

  6. Publius

    The 47% issue should be viewed as a product of very weak economic growth over the past 3 years. Statistically there is always a bottom quartile of income. The goal is to ecourage economic growth so that more of that 47% move into higher income brackets so that there is a broader base of AGI. Instead we are focusing on higher tax rates rather than higher revenue and we are discouraging successful people. People decry trickle down economics but growth starts at the top not the bottom. I am sure most would agree that they never got a job from someone unemployed or at the bottom of the economic ladder. Payroll taxes go to programs that most will get back as benefit in the future and in the case of SS, it is skewed towards the lower wage earner in terms of benefits received versus taxes paid . State and local taxes are a burden that is never factored into the federal tax debate because politicians cannot make the link between total taxes paid and the entity that levies the tax. Amercians pay a lot in taxes and get very little in observable beneifts.

    The incremental taxes that are assumed to be collected by higher rates will not solve our receipts/outlays imbalance. The trillion dollar numbers thrown around are over 10 years and broken down to a single fiscal year are peanuts. The US has tinkered with the tax code since inception and tax receipts have tended to remain below 20% of GDP. We have never made a serious efffort to reduce spending since the Great Society kicked off in the 1960’s. The “cuts” that we talk about today are really just cuts in the rates of growth in spending, not actual reductions in the amount spent.

    It would seem that the only way to change direction is to have a near death experience. If not that than a real death experience

    • Anonymous

      To your point Publius, entitlement spending, alone, was 20% of GDP at the time of the Great Society and now represents 60% of GDP. Scary.

  7. Inagua

    “The 47% issue should be viewed as a product of very weak economic growth over the past 3 years.”

    Publius – That is only a minor contributing factor. JHR is correct; it is mostly as result of policy decisions, all of which I agree with. Workers who can’t earn much money should not have to pay income taxes. To quote Lincoln, “If God gave him but little, that little let him enjoy.” The problem arises because these non-taxpayers get to vote and help determine how the taxes paid by the higher earning types is spent.

    • JRH

      Your vaunted “private sector reasoning” is either leading you to be ignorant of more than a half-century of constitutional law, or you just don’t like the Constitution all that much. Your “massive disenfranchisement” solution is unlawful.

    • Publius

      It is a huge contributing factor. We have Americans that are not contributing economically because the opportunities are diminished. I firmly believe that many people in that 47% bucket want more opportunities to make it on their own. That is not the discussion we are having in this country. And why shouldn’t people be able to earn enough to support themeselves and postively contribute to this country? If you are saying that they can’t, them the issue about taxes is moot, because 47% will only grow and we are already past the tipping point.

      We need to grow the pie, not reslice it. Growing the pie will increase revenue more than a fixed pie with higher tax rates. We also need to bend the spending curve down, because we will not be able to outgrow the situation that we are now facing.

      • Inagua

        Publius – According to this chart the percentage of filers who do not pay his rises from roughly a third to roughly a half in the last 30 years. But the most interesting thing to about the link is the headline “Over 50 Million “Nonpayers” Include Families Making over $50,000.” I don’t want any family making only $50,000 to pay anything, do you? I’m not sure what constitutes a family anymore, but even two adults together making $50,000 should skate in my book. Or one adult and and one kid.

        You ask why people “shouldn’t people be able to earn enough to support themeselves and postively contribute to this country?” and the answer is simple: most people are too low skilled, too lazy, or too unlucky to cut in our competitive, high tech, high information society. Long gone are the days when a man with a strong back could earn a decent living. There are no more ditch diggers, just ditch digging machines. Machines have replaced most low skill jobs in America, from telephone operator to stenographer to elevator operator, etc. The bulk of the remaining low skill jobs have gone overseas. It is a lousy time to be stupid, lazy, or unlucky. And there just aren’t enough government jobs for these losers. I am afraid that the poor will always be with us, and I for one do not want to add to their misery by taxing them.

        http://taxfoundation.org/article/record-numbers-people-paying-no-income-tax-over-50-million-nonpayers-include-families-making-over

        • Publius

          The median income in this country is right around 50K. Statistically the median is the middle…. 50% above/50% below. If you do not want anyone/family paying taxes who makes essentially the median, you are taking 50% off the table. Keep in mind as well, that many young people starting out make under 50K/annum and I would not want to think that this demographic should get a pass on taxes. Yes, I think as many people as possible should pay something, even if it’s a token amount becuase you will never end the “free lunch” mentality unless you send a bill however small.

          I have advocated here in past comments about the mismatch between skills and the marketplace, the trend is not good. However to move the needle in the right direction you need better growth to provide more opportunites. There will always be those who choose to live of the teet of government and that is where policies have the most impact. Recall welfare reform in 1990’s that cut the rolls substantially. Policy here did make the difference but we were also experiencing a more robust economy than we are at this point in the economic cycle so there were more opportunities for those moving into the workplace from government support

        • pulled up in OG

          You got no future in late-night comedy.

        • Inagua

          Publius – You may well be right that more people should be required to pay federal income tax, but I don’t have the heart to ask someone making only $50,000 to chip in. I could be wrong, and it is just a emotional bias, but I have a lot of sympathy for these losers.

          You are correct that economic growth is the only sure way to break out of the Bush/Obama doldrums. Perhaps we will get lucky and have another technology driven growth spurt like we had in the 90s. Maybe fracking can do for the teens what information technology did for the 90s. For sure, federal government policy offers no hope for economic growth.

  8. Cos Cobber

    Inaqua, thinking aloud….should the elderly lose their voting rights as well? Afterall, they will likely vote for themselves over the future being their time in this world is limited. Perhaps we count seniors over the age of 80 with a 1/2 vote and over age 90 with 1/4 vote and over 100 with 1/10th vote.

    • Inagua

      CC – The founders had it right. James Madison once estimated that about one-quarter of the males had the vote. The idea was that the people who paid the taxes should have the most say in how the taxes were spent. The modern equivalent would be to limit the federal franchise to people who are currently paying federal income tax. When the people in the cart get to tell the people pulling the cart how to spend the money, as is happening now, misallocation of limited resources and excessive debt are the inevitable result.

      • JRH

        Inagua, is your copy of the Constitution missing the Fourteenth and Fifteenth Amendments? Are your history books missing their chapters on the Civil Rights Acts of 1866 and 1964, and the Voting Rights Act of 1965? Does your copy of the United States Reports not include the Court’s decisions on poll taxes, literacy tests, and one man, one vote? Your vision of what this country ought to look like has been repudiated by history and law, whether you like that or not.

      • Cos Cobber

        Inagua, So did you sidestep my question?

        I’m all for the other 47% having skin in the game, that much we agree on. Skin is essential. People need to give if they want to receive.

        • JRH

          Cos Cobber, the idea that half the country doesn’t “give” is absurd. There are a good number of veterans and active military in this 47%: surely you don’t mean they don’t have skin in the game because we have policies that reduce or eliminate their federal income tax burden? What about the retired elderly who paid income taxes their entire working careers, and now don’t? Moochers all? We know Inagua thinks that cops and teachers making less than $50,000 (no, not all of them; yes, many of them) are “losers,” but I don’t think you do, do you?

        • Cos Cobber

          JRH, I didnt call anymore a moocher – not even close. I do happen to think that we would have a much healthier environment if we could manage to keep the % paying net negative federal taxes (ie paying more income tax than received under the earned income tax credit or other programs – sans social security) closer to 85%.

          Now my turn, I think you would agree that its unhealthy and unsustainable to have this many people in the boat.

        • Inagua

          CC – Sorry about that. Yes, the elderly should lose their voting rights when they don’t pay income taxes. I myself am in that category. I have substantially all my assets in one non-dividend paying stock, and I sell a few shares every few years to meet expenses. In the off years I have no income and pay no tax.

          I don’t agree with you that the 47% should have skin in the game. The are stupid, lazy, or unlucky and I think that is sufficient affliction. I am with Mr. Jefferson who put it this way, “A wise and frugal Government [should] not take from the mouth of labor the bread it has earned.” I believe that a fair updating of what Mr. Jefferson called “labor” is today’s median income of $50,000. Leave them alone, I say. Just don’t let them vote.

        • JRH

          Assume you mean it would be better to have net federal income tax payers at 85% rather than around 50%, though I’m not sure that would be a priority of mine, mostly because I don’t buy the theories that (a) if you’re not paying federal income taxes, you’re not “giving” to society, or (b) that those not paying federal income taxes don’t have “skin in the game.” For one, the 47% is not a permanent class: people filter in and out of it over their lifetime. Today’s college students are tomorrow’s federal income tax payers. I’m more disturbed by low tax rates on General Electric than I am by the fact that the workers in their cafeteria might, be virtue of the earned income tax credit and the child tax credit, avoid federal income tax liability. I’m more concerned with the proliferation of low-wage jobs than I am with the fact that low-wage workers have a light federal income tax burden (though, as I noted earlier, they are likely to pay a higher percentage of their earnings in state and local taxes than their managers).

        • Cos Cobber

          Well Inagua, you’re intellectually honest and complete – as usual. Interesting as it sounds, I’m not an advocate of income weighted ballots et al. because then those in the voting class would use their power to keep others out…like a country club. Particularly over time the laws of the nation would creep in that direction.

          JRH, There is so much to tackle it your response and I havent the time this evening. I’ll start with this, why should a corporation such as GE (not a personal fan of) be execpted to pay substantive income taxes at all? GE, as a body, is not a major user of government services. In the end, government services are made for and by the people, not businesses. Even when it appears businesses are getting the benefit of public goods, its really about how that business supports the stakeholders of that business (employees, stockholders, bondholders & govt relying on subsequent tax income incurred by those stakeholders) and those stakeholders always boil down to people when you follow the money trail to the end.

  9. Anonymust

    we are now in the stage where the Republic becomes a Democracy

    next stop: Democracy to Tyranny

  10. JRH

    Yearn for that ugly imagined country all you want, Iguana: just don’t tell us ever again how much you love the Constitution.

    • Inagua

      I never said I loved the Constitution. Perhaps you have confused me with someone else. It is not an imagined country I want; it is the country circa 1925 that I want. (I’m talking about most federal public policy, not technology (I like air conditioning, airplanes, television, power brakes, etc.)

      • JRH

        Ah, yes. Jim Crow, a little more than a quarter of the country had a high school education, an infant mortality rate about 6 times higher than today, and child labor! A major improvement.

        • If a quarter of the country had a real high school education back then then they were way ahead of where we are now, trillions of dollars later.

        • Inagua

          “Ah, yes. Jim Crow…”

          Please note I said “most federal public policy,” not state policies, particularly the states populated mostly with and run by Democrats like Bull Connor, who was only a 28-year old telegraph operator in 1925. His tenure as Birmingham Commissioner of Public Safety and Democratic National Committeeman were still in the future.

          In contrast the Republican elected president in 1920 was assailed by prominent Democrats for having Black blood. ” William Estabrook Chancellor, a professor at the College of Wooster, attempted to destroy Harding’s candidacy by charging that he was a “hybrid,” an “octoroon” descended from “Negro” ancestors. Chancellor was a devoted scientific racist. He was also an avid Democrat who worshipped outgoing president Woodrow Wilson.” And Wilson, of course, was the president who basically re-segregated the federal government.

          As president Harding went to the Bull Connor’s Birmingham and declared for Black rights in a speech praised by W. E. B. DuBois. Harding said, “I would say let the black man vote when he is fit to vote; prohibit the white man voting when he is unfit to vote….”

          Republican Coolidge, who succeeded Harding, also championed Black rights in his campaign against Democratic segregationist candidate John W. Davis, who went on to lose the Brown case.

          Jim Crow was an almost exclusively Democratic policy, untouched even by Saint Franklin of the New Deal.

        • JRH

          Weak stuff, Inagua. Yes, Jim Crow was a policy of Southern Democrats, who, since LBJ signed the Civil Rights Act, have all become Southern Republicans. (See Thurmond, Strom; Helms, Jesse; Kevin Phillips and Richard Nixon’s Southern strategy.) And your “I meant federal, not state” line doesn’t fly. Federal policy was very clear: it was to tolerate, endorse and cooperate in perpetuating Jim Crow by, for one, refusing to pass anti-lynching legislation (yes, FDR had his hands all over, or rather not all over, that), exempting domestic workers (read: blacks) from Social Security at its creation, refusing to open federal courts to civil rights claims, segregating the military, accepting as legitimate the results of federal elections where blacks were systematically excluded from the ballot, and in general doing nothing to intervene as state-sponsored terrorism was inflicted against African-Americans for nearly a century. The idea that Bull Connor represents the beginning of Jim Crow is laughable: read some history before mouthing off about something you clearly don’t know much about. Be honest about what kind of country you yearn for.

  11. Anon

    Inagua, you are a horrible person. To say that anyone earning under $50k is stupid, lazy or unlucky is reprehensible. There are so many such as teachers, policel, the list could go on, that start at that level and I would not call any of them those stupid or lazy.

  12. It was his idea

    JRH- If you have a pot to piss in, I hope you’ve taken the time since the election to position yourself financially. When the music stops (and it will), I hope you have a chair.

    • Inagua

      JHR will have much more than a chair when the music stops. He will have the chaise lounge of jobs. JHR is a law student on his way to a government job. He will be a classic time server, one of the nameless, faceless functionaries of the vast administrative state built by Bush/Obama.

      • JRH

        You can’t help but rely on the ad hominem, can you? Do you think it makes you look wiser, more reasonable, or more mature? Hours ago, you were claiming I couldn’t defend a claim — now you drone on about entirely made up assumptions about my life. There are words for that.

        • Inagua

          “Hours ago, you were claiming I couldn’t defend a claim…”

          Right, you gave three arguments, two of which were specious.
          ——————————————————————————————

          “…you drone on about entirely made up assumptions about my life.”

          Are you not a law student? Do you not aspire to a government job?

        • JRH

          While I’m not sure which arguments you’re referring to, I don’t think you know what specious means: are these the arguments that you ignored, or the ones you disagreed with?

          As for specious, let’s talk about the “reasoning,” if it can be called that, behind your argument that your interpretation of the Fourteenth Amendment is informed by Madison and Jefferson, who died decades before it was enacted and radically changed the meaning of the Constitution and of American citizenship.

          Finally, you have no idea what I aspire to. For what it’s worth, I’ve drawn paychecks from six employers in my life, every single one of which was in the private sector. How about you stick to arguments, and give the ad hominem a rest, Oz?