Don't Hire Golfers to Be Accountants
by Ryan Ballengee on Oct 20, 2008 1:50 PM EDT
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PrintThis is from the Hate to Be Rude Column on Golfweek.com with Jeff Rude:
• A PGA Tour player, low-ranking at that, told me that if Barack Obama is elected president, he’ll have to pay 56 percent in income taxes. And you wonder why Tour players are close to 100 percent Republican?
• Do the math. Jim Furyk just hauled $600,000 out of Bermuda and the two-day PGA Grand Slam. At that percentage, he’d keep $264,000.
That’s enough to make a multi-logoed man cry.
I'm no partisan hack and I have a background in business and taxation. There is absolutely no way that's true. In fact, if you were paying 56% in income taxes, you would be paying EXTRA to the government now.
Not even the tax increase that Barack Obama is proposing on those making $250,000 or more per year (36% and 39.6% for the top two tiers) would make any player pay over half in income taxes. With the litany of other taxes - state, payroll, Social Security, capital gains, etc - then they could get to 50%. But, to get to 56%, you would likely have to pay extra, have no deductions, and be an all around moron when it comes to tax law. And these guys are pretty loaded, so they likely have a CPA (or at least TurboTax) to fix this.
Anyway, this is a long drawn post to say:
Don't trust your finances to a PGA Tour player!
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graduated income tax
Obama wants to get back to the graduated taxes of Jimmy Carter – and go past that point if he’s allowed. Carter had a top tax bracket of 70% – but that percentage was paid on amounts above…some income level. For example – and these aren’t correct numbers – just drawing a picture…if someone made over $1 million – they would pay 36% on the first $200k – on the dollars they made between $200k and $400k they would pay 50% – from $400k-750k they would pay 60…..and on up to that 70% range.
Furyk wasn’t exactly right – but Obama wants to put the screws to successful people. I don’t think he had golfers and other athletes in mind when he made his proposals known, but they will be included. He also doesn’t have a clue what the truly wealthy business owners will do if he tries to pull a stunt like that with the tax code. You want unemployment and lowered production ? You’ll have it – businesses will shut down and people will hit the streets because of the tax burden.
"this ball will fit in that fairway"
The brackets aren't accurate for Obama
If you take a look at the plan, and compare to current brackets, it’s really not that much of a hike. Rather, it’s seemingly just repealing the Bush 43 tax cuts.
I don’t think Furyk was the player saying it. Rude used him as an example. But marginal tax rates make the example a moot point. Basically, the player who speculated has no idea what tax brackets are. LOL
by Ryan Ballengee on Oct 20, 2008 2:15 PM EDT up reply actions
yeah - that's a brilliant idea
repealing tax cuts NEVER works – even JFK understood that.
Like I said – the numbers were just an example of how a punitive graduated tax works. And don’t you believe for a second that Obama won’t go to work hammering successful people who run the businesses that keep people employed and businesses running.
"this ball will fit in that fairway"
Actually, it did work
Ask Bill Clinton.
by Ryan Ballengee on Oct 20, 2008 2:35 PM EDT up reply actions
LOL
you’re kidding – right ? I could balance the budget too if I was allowed by the media to add funds that are supposed to be off limits to the general budget. Tax revenue went down from the Reagan years because of what Clinton did – he added the money from Social Security and Medicade into his general budget figures and “balanced” the budget.
"this ball will fit in that fairway"
I agree with you
He bungled with the budget. But, that’s a strawman issue for this topic. Actually, tax revenue went down because the economy suffered during the first term of Clinton’s presidency – thanks to a variety of problems from the Reagan administration: too high interest rates, massive deficit spending, the development of sovereign pools investing in developing nations like China, etc.
The point is that raising taxes does not kill the economy. It simply doesn’t. Why? Because the wealthy still spends an enormous amount of money. The driver of the American economy – and therefore the global economy – is the concept of the middle class and its ability to spend (not save, mind you). Without a strong middle class to spend, spend, spend, everyone goes into the toilet.
by Ryan Ballengee on Oct 20, 2008 2:45 PM EDT up reply actions
That's too short
I apologize. As it turns out, though, the concept of lower taxes for the rich does not work in growing the wealth of the nation per individual. Per capita and in terms of GDP, then yes. But, unfortunately, that money does not trickle down to average Americans. If you take a look at the spread of wealth across the United States, it turns out that the wealthiest 1/5th of the population is accumulating more percent of the total wealth. The poorest 1/5th stays the same. The middle 2/5ths are much worse off in the aggregate.
And most small businesses – those that are LLCs or personal liability organizations – do not make more than $250,000 for themselves in a tax year. So, they would not be impacted. Businesses that smartly incorporate to avoid real tax liability will simply pass on increased corporate tax costs to us.
That doesn’t mean that the tax hike is perfect. I would disagree with the concept of taxing the rich to just give it to the poorer folks. But, we have a $10 trillion debt. We have to increase taxes simply just to pay that off at some point.
by Ryan Ballengee on Oct 20, 2008 2:41 PM EDT up reply actions
wow
what history book are you working from ?
oh – by the way – they weren’t “tax cuts for the rich” as the libs love to say. They were across the board tax cuts – but the dems love to point at the dollar amounts that came off of high earner’s taxes as opposed to middle income people and say that the tax cuts helped the rich when, in fact, the percentages were identical. They also said that the tax cuts didn’t help the poor – NO KIDDING ! The poor don’t pay taxes !! People on welfare are living off of the wealthy – and when extra rebates get kicked their way, they are taking more than the taxes they already have returned to them.
"this ball will fit in that fairway"
I get an incomplete
the reason the deficit got bigger under Reagan was because he trusted the Dems when they said they would cut spending. Reagan cut the taxes like he promised – and when revenue increased, the dems stepped up spending to new highs.
"this ball will fit in that fairway"
He signed the budgets
Actually, he didn’t really cut spending. He increased deficit spending but focused it on the military. His “cuts” in spending were actually just for discretionary spending, which really is not a spending cut at all.
My entire college education is in business and public policy, so I promise I’m not BSing you :) But, like anything political, a lot of it is open to interpretation.
The tax cuts actually favored the rich at the margins. Tax rates for each bracket are a misleading number. At the margins is where tax policy is felt the most. The rich benefited most at the margins. (BTW, it is almost impossible to find a non-partisan representation of the Bush 43 marginal tax rate cuts.)
Regardless of the feeling behind tax hikes, the deficit has doubled during Bush’s 8 years. We HAVE to pay some of that down. China actually stopped buying our debt for two days in the past 30. That’s never happened.
by Ryan Ballengee on Oct 20, 2008 3:56 PM EDT up reply actions
sigh
the President doesn’t control spending – that is the job of Congress. Spending went up because the Congress under Reagan (democrat majority) saw the extra income and went nuts spending. This isn’t “open to interpretation” – it is historical fact.
Clinton did things like removing lending controls and expanding wunnerful things like Fannie and Freddie.
Raising taxes does not – repeat – DOES NOT – increase revenue to the government. If you want to increase revenue to the government, you have to CUT taxes and let the economy grow on it’s own efforts. (if you want democrat history – check JFK then compare that to Carter and Clinton) Stop punishing the people who own businesses and put people to work. The people at places like AIG got greedy when the government took away a key restriction under Clinton, which lead to home loans being handed out like candy to people who had neither the means nor the inclination to pay back the loans – which then fed back to the government thanks to Fannie and Freddie and HUD.
Bush 43’s problem was that he didn’t have the will to stand up to democrats and the media to do what Reagan did – an end run around the media to tell the people what was going on. Either way – we are in a mess – and Obama wants to make it worse.
You’re right about China – we’re going to be a “subsidiary” of China if we don’t wake up soon.
"this ball will fit in that fairway"
The Pres
Signs the spending bills. The end. He has veto power. If it’s so bad, veto it. Clinton did it in 1996 and the Republicans paid dearly for it.
As for the Democrats under Reagan, spending went up just 7% in his first term. Given that inflation was nearly that or more during the early 80s, that’s on par spending. Nobody went hog wild. (Under Bush 43’s first term, it went up 14%.) Curiously enough, as I mentioned, Reagan negotiated budgets that saw a decrease in discretionary spending not linked to defense/national security. BTW, Reagan also vetoed 22 spending bills during his first term, something I didn’t know. I knew Bush 43 failed to veto any, but it makes Reagan look a lot more conservative with the pocket book.
BTW, lowering taxes at the highest levels does not definitively raise revenues. Rather, lowering extremely punitive marginal tax rates were what worked for Reagan in the 1980s. Here’s a couple of good links on the subject – here and here.
Again, I do not agree with any kind of tax cut. Tax cuts need to expire and America needs to pay its debt. BUT, spending increases should not accompany tax increases. That’s a bid mistake.
by Ryan Ballengee on Oct 20, 2008 4:43 PM EDT up reply actions
1996
He has veto power – but it is limited. He can’t veto things line by line – which is what these underhanded weaners on BOTH sides of the aisle do today – they take a bill and add their own spending to it – knowing that a truly important bill will have to be signed. Example – both bailout plans. The one that got passed was worse than the first ! (bastards)
You cannot balance the budget on the backs of the top 10% of the people in the country. This is where your theory falls apart. Clinton was a master at buying votes by promising “benefits” to people on welfare who don’t work and don’t contribute to society. As that number gets closer to 50, the chances of this country surviving get smaller and smaller. The top 1 of earners in the country pay 60% of the taxes. The top 10% pay over 80%. Are you SURE you want to have the top level shutting down their businesses ? Are you SURE you want to keep thinking that the government produces revenue in an economy ? Collecting taxes at the point of a gun is not raising revenue. The government doesn’t produce anything. It doesn’t sell anything. The government takes and redistributes – at the point of a gun.
"this ball will fit in that fairway"
I'm not on board
For new programs. I’m on board for raising taxes to pay down our debt.
Clinton did some very good things to negotiate welfare reform that really does work. Two year lifetime maximum on welfare is not a bad deal. The Earned Income Tax Credit, I feel, was a triumph as a supplement to keeping people off of welfare.
In a perfect world, the top 1% wouldn’t pay 60% in taxes because the middle class would be larger and wealthier to be able to shoulder the burden (in percentage terms, not absolute terms, because I would then want lower taxes). The problem is that everyone but the top 1% overspent and has for the past fifty years – particularly the last 15. As a result, the top 1% got stronger. The top 1/5th did, really. Now, we’re paying the piper. As a society, we are really not worth as much as we claim. And we need to pay down at least 60% of our debt within the next 20 years.
by Ryan Ballengee on Oct 20, 2008 5:36 PM EDT up reply actions
it's the same thing...
you CANNOT raise taxes and expect to pay down the debt like that. Check your history – it just doesn’t work. What has to be done is to cut spending and get more people ON the tax paying rolls and not just sucking the treasury dry through vote buying programs…errrr…welfare.
If Obama raises taxes the way he says he will, the successful people he plans to punish because they have worked hard and are successful will close up shop and live off of their wealth. They don’t need us – we need them. That’s the way this economy is designed. Get the government OUT of the mix and watch what happens. The government forced banks and lenders to make high risk loans – and look what happened. The people who know how to lend money are in those businesses – NOT the government.
If you truly want this country to fall into the abyss of European socialism – vote for Obama – but at least go into the voting booth with your eyes open and understand the facts. I don’t know what “perfect world” you’re talking about – but I don’t live in it. Those percentages are facts because of low-lifes like Bill Clinton who think that buying votes is a good plan and promising a cradle to grave life supported by the government is a reality.
We are being sucked dry by illegal aliens pouring across the borders – collecting cash and sending it back home without paying taxes. They are being given access to taxpayer supported services, but don’t put anything into the system. Those are the people that democrats want to be able to vote…for them, of course…because they promise to GIVE them everything.
This country is in a huge hole because our government is more interested in personal power than it is in getting what should be the greatest country on the planet healthy. And I don’t mean just one side of the aisle – I am NOT a McCain fan. I lived in Arizona when he was running his mouth back in the early 90’s. He is nearly as bad as Obama – but not quite. I am not happy with either of these clowns.
"this ball will fit in that fairway"
I'm just telling you what I know
To this point, I haven’t seen any stats, figures – just conjecture and blaming Bill Clinton and the media (which has no impact on the Executive’s ability to sign a piece of paper).
We both agree that spending needs to be cut. But taxes have to be increased. The government doesn’t make more money – and therefore help pay our deficit – by cutting taxes. It doesn’t happen at the low marginal rates we pay today. If I could show the graphs, I would draw them myself.
Raising taxes will not stall the economy. What is stalling the economy is deficit spending and millions of Americans borrowing against paper wealth with the absurd expectation that they would continue to get richer in paper money. Millions of Americans from all classes did it. And now we have to pay for it with a bailout.
Also, the percent of American families on welfare is just above 2% right now. Welfare programs are just a common talking point from both sides. Besides, we all just got $150 billion in supposed stimulus, thanks to the Chinese. Few complained.
The Congress did not get us into this mess with modifications to the CRA. Subprime lending is less than 4% of all lending. What got us into this mess is the concept of an unregulated, extremely risky insurance derivative – created by the guys that supposedly know how to make money. They both screwed up.
Both sides are to blame for illegal immigration. No one party can be pinned for that. And actually, Republicans have been courting the Latino vote by making immigration friendly promises. Bush did to help get elected twice.
Really, it’s too late to talk about socialism. Social Security, Medicare/aid, etc, – they’re all products of socialism. Both sides want socialism because they want power. The difference is just what they want to be socialized – marriage, health care, retirement, etc.
by Ryan Ballengee on Oct 20, 2008 7:05 PM EDT up reply actions
where did you learn this ?
Where did you learn that taking money out of play in a free market society and putting it in the hands of a government that does not produce anything is a good idea ?
Basic free market economics – you put the money in the hands of producers and consumers – that money circulates and the tax revenue grows.
This is history – there is no disputing it…unless the desired end is Marxism or socialism – where the government takes control of everything.
Now really – tell me something that the government does well. If you give them more money – they spend it – they don’t pay down the debt.
and no – you are right – the media does not make the decisions – but Clinton was a president who licked his finger and allowed public opinion to control his decisions – which is the definition of a democracy – aka mob rule. He and the media operated polls – most of which were slanted in their wording.
Making promises like Bush did does not allow illegals to vote.
and you are exactly right on both sides wanting nothing but power. If McCain truly wanted to get America back on the right path – he wouldn’t have handled those “debates” the way he did. Obama should have been confronted and forced to tell the truth – but McCain didn’t do that – so we got what we got. how do you choose between a guy who openly says that he wants to do things that will destroy this country – or a guy who is afraid to stand up and point out that the things the other guy wants are wrong ? Bush did one thing right – he fired back at Muslem terrorists – then he caved to public pressure and bogged everything down. Since then, he hasn’t done very much right. McCain seems to be following in those footsteps – afraid to stand up against bad ideas.
"this ball will fit in that fairway"
I think you're not understanding me
I’m saying that we need to raise taxes now because we need to pay down out national debt. Every American owes $33,333 in debt. We have to pay that debt, or our currency will go down in value when the global economy recovers. Therefore, we need to pay down the debt. Tax increases do that.
There are actually studies that show that, under the right combination of monetary and fiscal policy, that raising income taxes can actually help the economy. It’s extremely bizarre, but actually possible under macroeconomic theory.
And cutting taxes and making capital easily available (double lax fiscal and monetary policy) got us into this situation. Handing free money over to people does not intuitively result in good outcomes. Only in theory, sometimes in practice.
The media had nothing to do with Clinton’s presidency. He was a centrist because it helped him maintain power. The center, though, is where most good solutions are. Just ask Ronald Reagan in 1983 with Tip O’Neill.
And Bush did do some pretty good things with terrorism, but it ended with the invasion of Iraq. He had a real opportunity to help rid the world of terrorism in its roots – Afghanistan, Saudi Arabia, and Pakistan – and we didn’t get the job done. McCain doesn’t seem to be interested in pursuing good Republican ideals, either. His only plan is a tax cut.
by Ryan Ballengee on Oct 20, 2008 9:54 PM EDT up reply actions
this is fun
I’m just sorry you’re wrong all the time. ;-) (J/K) :-)
Clinton was a centrist in public – but his policies all leaned towards socialism. He is the president who repealed the regulations on lending and forced lending institutions to make loans to people who shoudn’t have gotten them.
Of COURSE there are studies out that will “prove” one thing or another. Problem is, those studies don’t work in the real world. Politicians CANNOT be trusted with more money. JFK and Reagan cut taxes and money poured into the government coffers. Then Congress got ahold of it and spent until they needed MORE. Pointy headed academic types can come up with studies until they are blue in the face – mostly funded by tax dollars, by the way – but until we have a Congress that will actually do what is needed, we’re screwed.
Afghanistan is a povery ridden country – terrorists may have bases there, but they don’t have the funds to run terrorism. Iraq was tied to the terrorists that ran two jets into the WTC, one into the Pentagon, and tried to get another into the White House. Hussein was a military dictator who had already tried to invade other parts of the Middle East. I agree that we need to finish this war and get out – but we’re having to deal with people who refuse to get along with each other, much less us. Every time we back off, the bullets and bombs start flying again. What a mess. (build a wall around the whole dump – take away all the weapons – and let them throw rocks at each other) Bush folded when media pressure got people thinking that we were in another Viet Nam. (what nonsense – but people bought into it and made fighting the war almost impossible)
“Good Republican Ideals” haven’t been in play since 1994 when they got elected on the “Contract With America”. That lasted what, maybe a month ?
You’re nuts if you don’t think the media had a lot to do with Clinton’s presidency. They aren’t called the 4th Estate for nothing. The biggest portion of major media is left leaning and they give all kinds of support to democrats, and find ways to slight republicans. Slick Willie is a very charismatic person, and he used his media support to his advantage every chance he got – and he was good at it.
Reagan knew how to get around the media and go straight to the people. He didn’t put up with biased questions and knew how to correct a reporter without getting him or her too mad.
No – not ALL the best answers come from the middle. Consensus is not always a good word. Consensus means compromise – and everything can’t be compromised. When you let your principles slide – eventually everything falls apart. We are allowing ourselves to be killed from within by telling people that it is ok to live off the government teet – and teaching them that the government is the answer to all our problems.
You confirmed everything I have been saying when you that handing out free money to people does not result in good outcomes. (about time you left the dark side !) :-) We need to be telling Washington and all of our local and state governing bodies that same thing. Until they stop spending and giving money to people who only take – we will never get out of this hole we’re in. Every year, more people go on welfare and the government does nothing to stop the flow because these people will vote however they are told once they are under the government thumb – and it’s the Democrats who have been paying their way since FDR.
Tell me – what kind of government do we have ? Did you know that there isn’t a government school textbook printed in the US that has it right anymore ? Since FDR started saying that we live in a democracy, we have gradually brainwashed kids into thinking that way.
"this ball will fit in that fairway"
Reagan
Ronnie couldn’t have vetoed any spending bills?
he did...
…but he didn’t have line item veto to get rid of a lot of pork that was hidden in necessary bills that had to be passed. I never said that democrats were dumb – just underhanded. :-) (ducking D’s swing) :-)
"this ball will fit in that fairway"
Why us?
I think both of you guys are way ahead of me in this. I pay 38% on taxes now and that seems pretty high to me when you consider that I am in the under 75K range. That hurts me alot more than it hurts Jim Furyk. Many people in the U.S have rarely if ever earn more than 75K per year. Add to that that those people are the ones than now need medical attn and the care/prescriptions needed to help them live are also outrageous.
Why tax any of the American people anymore? If outside countries are taking our jobs then why not tax them more to import the stuff back into us at a price that deters companies from taking their manufacturing outside that of the U.S. We need to find a way to bring back our jobs or we won’t be able to afford anything made overseas no matter how cheap it is, because we won’t have any jobs. This may not affect you and I now but our kids won’t have to go to college any longer because the only jobs we will have left in the U.S are service jobs.
I don't disagree
The tax plans put forth by McCain and Obama both propose a middle class income tax cut. They both pay for it in different ways – other taxes, etc. I think the crux of the argument between court and I is about taxation on those making greater than $250K – the highest tax brackets.
I think both candidates have aims of making American manufacturing jobs grow, though that will be tough. Seems like the best bet is to make college more affordable – universities, community colleges, trade schools (becoming an electrician is actually an awfully good idea these days) – and train our kids appropriately and offer classes to adults who have lost jobs in sectors that probably won’t come back.
I hope that we can grow the energy industry in this country and employee millions of people as a result – through oil, solar, wind, nuclear energy development.
by Ryan Ballengee on Oct 20, 2008 11:05 PM EDT up reply actions
you don't "pay for a tax cut"
that’s another liberal media phrase. tax cuts put money back where it belongs – in the hands of the people who earn it. government doesn’t earn anything – it doesn’t produce anything – it CONFISCATES using a power that you or I would be arrested for if we used it — Force.
The people who make over $250K already pay 90% of the tax burden. How long are you going to force 10% of the people to pay 90% of the bill ? How long do you want to allow 50% of the country to pay nothing ?
Obama “gives an income tax cut to those who don’t pay income taxes — and "pays for it” by raising income taxes on those who are already shouldering more than half of the nation’s income tax burden."
Let’s address this idea that all of these people who get the Obama welfare checks pay Social Security and Medicare Taxes. These are really not so much taxes as they are mandated premiums for a specific defined benefit. The idea here is that you pay for your Social Security and your Medicare while you are working, and receive the benefits when you retire. If Obama wants to eliminate these tax burden with his “refundable tax credits” then he is turning both of these programs into pure income redistribution efforts.
However you say it, the fact of the matter is that Barack Obama’s tax plan is welfare – he takes money from the high achievers and spreads it around to those with lower incomes.
Here’s a Wall Street Journal article that explains it pretty well – http://online.wsj.com/article/SB122385651698727257.html?mod=djemEditorialPage
If you don’t like the WSJ – try the more liberal Washington Post’s pictorial comparison…
http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST2008060900950.html
"this ball will fit in that fairway"
You have to "pay" for a tax cut
With a reduction in spending, just as you have to pay for a spending increase with a tax hike. We don’t do that, which is why we’re in trillions of debt. The concept is called Pay Go and it was instituted (well, re-instituted) under GHWB. McCain or Obama’s tax cuts have to be offset by spending cuts. Neither want to cut spending in a realistic fashion. (Earmarks are not really cutting spending, that’s just discretionary spending.)
While I don’t agree with many aspects of Obama’s tax hike/cut/whatever, we have to raise taxes. There is no way around it. I’ve read Obama’s plan and I don’t agree with facets of it – many of those you’re trying to mention. But, the concept of a tax hike is one I agree with doing because we need to pay down our national debt.
by Ryan Ballengee on Oct 21, 2008 10:02 AM EDT up reply actions
you said it yourself...
raising taxes does nothing until spending stops – that’s it – go no further.
This economy is not a zero sum game. It grows and shrinks – and history shows that it grows when the government gets out of the way – period. NOT when the government passes punitive taxes.
You cannot balance the budget on the backs of the tax payer – it doesn’t work that way.
"this ball will fit in that fairway"
You aren't basing you concepts
in macroeconomic theory or practice. I do not disagree with you that getting out of the people’s way will generally lead to good solutions. But it can lead to awful solutions – credit crisis, dot com bust, house bust in the 90s, S&L crisis, etc. You need some regulation.
Bottom line is that you need to raise taxes to pay down our debt. That has to be accompanied by a decrease in spending. You can only theoretically cut around 40% of the budget, in practice less than 10%. That’s not enough to even pay interest on our national debt.
You, me, and everyone else owes $33K+ to the national debt. And, like it or not, we all signed on to pay down this thing at some point. You cannot spend in deficit forever. Dick Cheney is wrong. Deficits matter. You said earlier that we will become a subsidiary of China if we aren’t careful. That is exactly what will happen if we continue to run $500B deficits – trending to $1T.
by Ryan Ballengee on Oct 21, 2008 10:15 AM EDT up reply actions
Check out the Fair Tax
abolish the IRS and install a flat consumption tax. (the figure arrived at was 23) you will still pay local and state taxes – but that percentage is miniscule compared to federal taxes. prices would go up that 23 initially, but when you have that 38% back from your paycheck, you come out ahead. you only pay taxes on what you consume – and prices will eventually get lower because more money in the economy means more competition and lower prices.
This is an over simplification, of course – but check out the book by Neal Boortz and John Linder “The Fair Tax”. It’s a short, easy read. They also put out a second book to answer questions that came up and to silence critics who intentionally or unintentionally got the facts wrong.
"this ball will fit in that fairway"
I've read it
A consumption tax is, basically, a regressive tax. No matter what it does to the price of good and services – I agree with Boortz’s theory in part about prices – it is a regressive tax on consumers. If you need a certain basket of goods to survive, then everyone has to spend the same (and get taxed approximately the same) to survive. The middle and lower classes earn less, but pay the same as the wealthy. That’s actually more to the right than a flat tax (which isn’t that bad, more fair).
by Ryan Ballengee on Oct 21, 2008 9:59 AM EDT up reply actions
don't stop there...
…the lower wage earners and people on poverty are covered in the proposal. They are refunded monies paid in taxes and essentials are not taxed.
"this ball will fit in that fairway"
It's been a while since
I’ve read it – maybe two or three years. I can forget a few details :)
It’s still a regressive tax. The sales tax is – by definition – a regressive tax. That’s why the increase to 6% here in MD was so outrageous. It was done by a Dem governor who claimed to be fighting for the people.
In effect, though, we are still then having poor people give an interest free loan to the government for every purchase. And you can’t escape it. At least in the current tax code, you can do that if you’re savvy.
It would be more difficult for the rich, assuming they spent at the same clip. But, it would be likely that the rich would horde more money (not necessarily bad). Spending drives the economy, though, so a reduction in spending/commerce by the top tier would negatively impact the economy, too.
I’d be much more inclined to have a flat tax.
by Ryan Ballengee on Oct 21, 2008 10:19 AM EDT up reply actions
what ??
you’re complaining about a damn..err…dem governor doing what you wanted him to do – raise taxes ?? :-)
remember – the tax from the Fair Tax proposal isn’t on essentials like food and clothing.
and when have you ever heard of the rich spending at the same clip as the poor ? The rich don’t horde their wealth – they put it back into play through their own businesses and the stock market, etc in order to make more money. That’s how business works – that’s how you have a job. Sure, they have savings and assets set aside for a rainy day – but that’s not hording – that’s being smart. The rich buy things like big houses and boats and cars, and go on trips, etc – those things employ more people and put more money into circulation.
Charitable giving goes through the roof when taxes are down – partly because people really do want to help and, of course, partly because there is a tax benefit. Take away the punitive income tax and you put trillions of dollars back into play.
"this ball will fit in that fairway"
Let me just start
by saying that this is definitely driving up the total # of comments here at WR! And I’ve been able to get some policy reading in that I haven’t done in a while.
My tax philosophy is that of either a neutral or progressive tax code. I say this because the rich draw just as many benefits from the government as the poorer classes do. They are different benefits – access to capital, great human resources, etc – but they are equal if not larger.
The rich do horde their wealth but put it to work in private investments. Some are businesses they run themselves, some are equities, yada yada. I understand that this, too, fuels the economy. But, a regressive sales tax on the people that then consume the goods produced by these businesses – the middle class – is, well, bad business.
Charitable giving does go up when taxes are down (read an abstract on that, new point). I think what you’re missing, though, is that marginal tax rates on the richest classes are very low today compared to historical levels. There’s a certain point in which reducing those marginal tax rates will result in a net loss in tax revenues. Again, that goes back to my point that we cannot just spend less and be in better economic shape.
by Ryan Ballengee on Oct 21, 2008 10:51 AM EDT up reply actions
point of view in time
what you call “marginal” today is more reasonable than what the rich were saddled with under people like Jimmy Carter. If you lived back then, you would have been horrified at what the government tried to pull.
Hording and investing are not the same thing. When you horde, you aquire wealth and hide it away – burying your money in the back yard in coffee cans and in the mattresses.
Take a look at tax history sometime. When the country was started – 1% was considered outrageous. When the democrats under FDR instituted the income tax – they demanded 10% and “said” that they only wanted to have that tax during the war and that 10% would be more than enough to run the government. THEN they discovered that when people don’t have to sit down and write a check for their taxes every April, they could bump tax rates up and they wouldn’t notice or complain as much.
Now we are in the 30-50+% area and the liberals are finding that they can promise to give more money to welfare people while publically blaming the “evil rich” for their predicament – and since they are being paid to sit at home, they’ll agree with whoever wants to give them the most.
This really isn’t a difficult reality to understand – but it gets swept under the rug – and people (sheep) have always been willing to buy into hatred of the rich without thinking.
"this ball will fit in that fairway"
You're hinging on the wrong thing
I know the tax history of this country. I know my facts. I majored in this stuff in college and graduate school. I’m not blind to what you’re discussing. I promise.
I still think you miss the concept of the marginal tax rate. I don’t mean “marginal” tax rate, but rather “marginal tax rate” as a whole term. It basically is the concept of how much you pay extra in taxes to acquire more wealth – in effect, the tax incentive to get richer OR the taxes you pay on the last dollar you earn. Here’s a good table on how that rate has drastically diminished over the past 30 years.
What it means for tax policy is that taxes for wealthiest earners used to be at like 70% for each dollar earned above a certain point. (This is Jimmy Carter here.) We have reduced that to 39% today. Basically, for every dollar you earn over about $160K, you pay 39 cents of that dollar in federal income taxes. For each dollar earned between different brackets or money until you get to $160K, you pay different rates. This all averages out to get your actual tax rate.
So, the marginal tax rate for federal income taxes has come to the point where there is a 3 cent disincentive to earn money above $160K. It used to be something like 20 cents. Basically, there’s little room to cut marginal rates to aid the wealthy.
by Ryan Ballengee on Oct 21, 2008 11:21 AM EDT up reply actions
"aid the wealthy"
there it is again. I understand margin and marginal rates. What you don’t seem to get is that when you take the burden off the people who understand how to make money – you take the brakes off of the economy.
you said it yourself – there is a DIS-incentive to earn more than a certain level of income. Thankfully, there are people who are willing to put up with a few cents less on the dollar in order to make even more. BUT – if you push it too far – they will shut down and you will really get what you said they are doing now – hording – then everybody loses. People will be out of work – putting more people on welfare – but with no one to tax, who’s going to pay for the welfare ? The government ? Where does the government get money ? From tax payers. And when you run the taxpayers off of the roles – you have nowhere to draw the money to pay the people who are on the welfare because you (the government) ran the producers out of business.
Do you see the big circle ?
"this ball will fit in that fairway"
I see where you're going
but it’s wrong :)
We have to pay down the debt. Wealthy people and poor people. We do that by hiking taxes. And I don’t even mean just on the wealthy. I mean across the board. It’s like credit card debt – it accumulates interest if you don’t pay it off. By just not using it (aka, balanced budget) doesn’t mean it goes away.
Taxing the wealthy on income taxes (and small businesses) is really a non-sequitir for this economic growth argument. That really depends more on corporate taxes. In reality, though, the tax code is so convoluted with tax breaks and loopholes that increasing the tax rates on corporations would probably not do much. The ideal situation would be to actually repeal and close many tax loopholes that businesses and the wealthy have. Going back to the original example, only an idiot would wind up paying 56% in income taxes based off of their total income against AGI. Same for corporations. Many large companies find ways to pay extremely low tax amounts compared to the rates they are supposed to pay. Tax evasion and creative accounting is a fascinating practice.
by Ryan Ballengee on Oct 21, 2008 12:08 PM EDT up reply actions
fun listen
Not on taxes but the credit crisis!
I’ll put the link to where I found the podcast link (which is super long and probably wrong):
http://kfmonkey.blogspot.com/2008/10/giant-pool-of-money.html
by The Constructivist on Oct 21, 2008 7:54 AM EDT reply actions
Where do I begin?
Tax cuts or no tax cuts, it doesn’t matter until spending is drastically reduced. Not some token cuts, but real hacks.
To me, the basic problem is that not only has the federal government exceeded its Constitutional authority by leaps and bounds, but that the people have come to expect entitlements from there. Do you know that a number of federal policies have come to be because the federal government threatens to hold back highway money from the states? Why on earth are states waiting for handouts to fund highway work?
As pointed out by Ron Paul at some point, the job of a Representative or Senator these days is to go to Washington and fight to get back some of the tax money that constituents paid. And does it come back in a lump for the states to use to address problems that they face? No, it comes back in the form of earthworm research and bridges to nowhere.
CG asked above what the government actually does well? Well, it’s decent at defense, and that’s it. Everything else it touches is a huge failure and/or a money pit (and defense is a huge money pit). That’s why when talk of universal health care comes up, I shudder, because it scares me to know that I’d be putting my life in the hands of people that can’t spend money wisely that doesn’t even belong to them.
If you were to tell me that I can’t have tax cuts, then if it were up to me, I’d flip the amount of taxes I pay to the federal government and state government, at least to the degree that the federal government would be funded just enough to perform it’s Constitutionally mandated functions. If I’m forced to have social programs, then I want states to administer them.
Until the face of the federal government changes, all the talk about taxes is moot, because the spending monster grows every year and it’s not going to stop.
A few things
Completely agree that we spend way too much money and not nearly enough of it efficiently. The federal government automatically spends 16% of the budget each year on health care. Fascinatingly large amount of money. Over 56% of our budget is REQUIRED by law. That’s nuts and only expected to grow larger.
And you are right that that the federales do find a way to weasel additional spending and power out of the states by the power of funding. I think it’s sad that the speed limit is 55 across the country because of highway funding (except Montana!).
The government actually does a few things well. Medicare/caid are huge successes on both sides of the aisle. SCHIP is a great concept. And defense does ok – except with the past two Administrations.
Anyway, my point is that we have to pay down the debt. No one seems to want to recognize this fact. Had the European economy not tanked, the dollar would likely be at least 2:1 against the Euro right now. That’s dangerous stuff.
by Ryan Ballengee on Oct 21, 2008 10:10 AM EDT up reply actions
ummm....
…medicare and medicaide are huge successes ??? Do you realize that the cost of paperwork alone, not to mention the confusion, caused by those two are what has been responsible for driving up medical costs ? The system has loopholes that allow so much fraud that the honest doctors and hospitals are forced to pay for the difference.
SCHIP is abused by illegal aliens and welfare recipients. It’s a decent idea, but, again, the government has no business running health care.
We all agree that the debt needs to be paid down – but you want to do it on the backs of the people who produce the wealth in the country. We want to do it by forcing the government to cut spending.
I have always wanted to see the books of what the rest of the world owes us and start balancing those numbers. You don’t hear about other countries that take our money talking about paying us back. You don’t hear countries that we bailed out in four major wars and a few smaller ones paying us back for saving their butts.
"this ball will fit in that fairway"
The money is NOT there
To simply cut discretionary spending (even at the full amount) and pay down the debt. It’s not there. At all. Especially with a debt ceiling of $13T. $1T in the FY08 budget is discretionary. Half of that is for homeland defense purposes. Half of the remaining money is for things like infrastructure, education, etc. So, there’s about $250B/year that could potentially be cut without a big problem…at maximum. If you raised taxes on every person by $10, that would be the same effect.
Actually, there are five or six major causes to health care cost hikes. Most people like to pin them on one thing or another. And both major proposals from the candidates address almost none of them. They are (1) lack of generalist/family practice doctors, (2) lack of a reliable, universal electronic medical management system, (3) lack of payment for use of hospital services by a variety of people, including illegal aliens, (4) a lousy level of education about preventative health care, (5) HMOs/PPOs have grown too large and demand reimbursement for doctors at rates that cause doctors to leave their practices, and (6) medical malpractice insurance rates being too high because of frivolous lawsuits. Note, none of this has to do with access to health care. But, both Obama and McCain’s plans focus on getting access to health care plans. Totally wrong approach.
BTW, SCHIP explicitly bans illegal aliens from using the program. The major parties’ talking points are filled with misnomers and lies.
by Ryan Ballengee on Oct 21, 2008 11:01 AM EDT up reply actions
who said discretionay spending ?
We have an out of control government – education, welfare, medicare, Social Security, etc – are all filled with fraud and red tape thick enough to choke a whale. They give billions to countries who make demands on us instead of taking care of their own people.
We have schools teaching kids more about condoms and feelings than about reading, writing, and arithmetic – they can’t pass a basic class, but they know where the welfare office is when the girls get knocked up. They don’t teach history – they indoctrinate into socialistic philosophy. Kids have to go to college to get the high school level of education that I got just 30 years ago. (geez – now I feel old)
It’s not just discretionary vote buying…errr….spending that causes the problem. It’s the conress that doesn’t say “enough is enough” – they always want more.
Obama and McCain are still touting universal health care – and it doesn’t work ! People from all over the world come to the US for medical treatment because they can’t get it in their country. Yet we insist on following their example and pretty soon we’ll be in the same boat except that we won’t have anywhere to go.
"this ball will fit in that fairway"
David Walker Disagrees
The former Comptroller General has stated on numerous occasions that Medicare and Medicaid are growing beyond our means to maintain them. We simply can’t afford to keep them going at this rate. That doesn’t sound like a success to me.
by Double Eagle on Oct 21, 2008 11:55 AM EDT up reply actions
I agree that reform
is required of Medicare/aid, Social Security, and other entitlement programs. Health care costs are estimated to be 20% of our budget in the next 10-15 years. That’s frightening. But, it has been successful to this point. There’s no denying that improving the lives of seniors and giving them health care at a reasonable price is a good idea.
The program isn’t the problem, on a macro level. It has its flaws, certainly. But, as I mentioned in an earlier post, we haven’t addressed the major causes of the huge run up in medical care costs in the last 15-20 years. Until we do that, we shouldn’t be talking about health care access – which, BTW, NO CANDIDATE is proposing and that is a scare tactic buzz word (read the plans, people, and I cannot stress that enough). If you address why costs are so high and actually then reduce costs, then these concepts are sustainable. The government should really not be in the business of providing health care. Rather, it should be working with the private sector to find solutions to root causes of problems that neither can handle on their own.
It frustrates me to no end that proposals to “solve” problems really treat the symptoms, not the diseases of our ills. It’s especially ironic when it comes to health care.
court, I think we’re on the same page on spending and its wastefulness in many areas. I am no fan of NCLB. I was educated in a Catholic school environment where we didn’t have standardized tests, etc. I came out of Catholic high school ready to be a junior in college – literally, by AP credits. We can do better.
For what it’s worth, though, there is bias in everything. There was bias in teaching 30 years ago and 300 years ago. Just more people complain about it and challenge it now.
by Ryan Ballengee on Oct 21, 2008 12:32 PM EDT up reply actions
The problem with reform...
…is that the problem that needs reform is usually one that can be traced back to a governmental cause. We see the same symptom in the economy, in general. When a government tries to artificially manipulate variables in a large-scale economy (interest rates, inflation, etc.) it almost always gets to a point where the pendulum is about to swing through the wall.
People are fearful when we say that the markets will work themselves out, because they feel like they’re not in control. They’d rather have politicians do something. Well, considering the majority of them are lawyers and not economists, that should make us even more fearful. Would you call your Congressman for retirement planning advice, or to find out about a strange rash? No? Then why are they qualified to construct a huge bailout which may or may not even be effective?
by Double Eagle on Oct 21, 2008 12:47 PM EDT up reply actions
I would disagree
That the government is always the problem. You said usually, so I would assume you agree to that end. In this case of this crisis, I think it started with a few things in government: (1) Phil Gramm pushing through de-regulation of investment banks and (2) the mandate from Fannie/Freddie for subprime lending. The private market made it worse by (3) leveraging their money at 40:1 (INSANE!) and (4) creating a Credit Default Swap market that basically assumed that house prices would rise forever (Who would believe that?!). Don’t get me wrong, the government makes mistakes. But, markets often compound them many more times over.
by Ryan Ballengee on Oct 21, 2008 1:02 PM EDT up reply actions
In what way?
When have the markets compounded the problem when not prompted (forced) to do so based on excessive government interference, manipulation, regulation, etc.?
Not saying it’s never happened, but I can’t think of any big examples.
As for Fanny and Freddie, you can see clips on YouTube of Congress grilling a regulator in 2004 or so about that impending crisis, which he was reporting on. One rep actually called it a “public lynching”. That was four years ago and here we are today.
John McCain and Barack Obama like to call out the “greed on Wall Street” as the cause for all this. However, if government stands aside and lets bad businesses wither and die instead of creating a system where this behavior flourishes and ultimately caves the system itself, then we’re in a different spot today.
by Double Eagle on Oct 21, 2008 1:12 PM EDT up reply actions
See above
Credit default swaps were not forced upon these organizations. Let me also mention that a lot of lending was not really “subprime,” but rather exotic mortgages to good customers. Or mortgages for homes that were appraised in a fraudulent fashion to people that were underqualified. And you had approvals for Alt A/no documentation mortgages. None of those were mandated by the government. None. Banks made those decisions all on their own. So there’s your example. Again, go look at the S&L crisis – lack of proper regulation.
I’m not disagreeing with you that Congress made serious mistakes when it comes to Fannie and Freddie. But, if we let banks fail and the credit market collapse (like it almost did three weeks ago), then our society would fail. It’s that simple. The value of debt in the world is so stunning that if it were to all be called at once, economies would fail to exist.
by Ryan Ballengee on Oct 21, 2008 2:10 PM EDT up reply actions
HUGE mistakes
Congress opened the door and told lenders to start marching through. When even “good” customers ask for a loan for a $200K house, and the bank tells them they can ok for a $400K house because of what Congress did – those good customers become “subprime” for what they were being given loans for. (semantics, I know – but the point is valid) The regulations were there from 70 years ago – Carter and Clinton removed the regulations and things started crumbling.
You’re right on the Catch 22 of the situation. Letting these huge businesses collapse could be worse than not bailing them out – but businesses that prove to be poorly run are the ones that need to be weeded out. It’s a tough call.
I’m sure you got the email calling for the government to give those trillions to the citizens instead of the businesses. They had the amount at somewhere around $450 K per person – money that could be used to pay off bills and buy a house and car or whatever (hopefully save some, too), invest in the market or start a business…whatever. The money would be invested where people wanted to invest it, and it would eventually “trickle up” to the institutions people chose to trust.
Granted – most people would blow it in a year’s time or less because they wouldn’t know what to do with a chunk of change that big – but it would be put into play and still working it’s way around the economy.
Too many variables to make America a “success story” overnight – but it was an intriguing idea.
"this ball will fit in that fairway"
correct
I don’t think that the government is ALWAYS the problem – but more often than not….yep. Power does terrible things to people with personal agendas.
markets take advantage of what they are given to work with – unfortunately, they also have some people who don’t always play by the rules. The government has a nasty habit of changing the rules and punishing successful people.
I say that from now on, if someone doesn’t have a golf handicap below 10, they can’t run for public office ! We need the honest people running things. :-)
"this ball will fit in that fairway"
Haha
I have played with plenty of supposed 10s that play like 20s. Maybe those are the guys on Wall St. haha.
In this case, CEOs of banks sold derivatives behind swaths of crappy mortgages mixed in with good ones. They were unregulated and that screwed everyone over. Blame belongs on Congress for Fannie/Freddie, but not on the dumb dumb gambles made by banks and insurance companies.
You or I would never have made those mistakes.
by Ryan Ballengee on Oct 21, 2008 2:12 PM EDT up reply actions
10's that SHOULD be 20's
Too many golfers either don’t know the rules, don’t care about the rules, or just let them slide because they aren’t playing on the PGA Tour – in any case, it’s a lack of respect for the game. Mulligans come from shots that would either be penalty strokes or balls in bad spots that would add shots to a hole. Improper drop ? Penalty stroke. Soling your club in a hazard ? Penalty stroke. Gimme from 3’ ? I’ve 4 putted from 3’ before – you just never know. You start adding those things in and that 10 becomes a 20 in a BIG hurry.
What I like about 99.9% of truly good golfers is that they would rather throw their bags in the lake and never play again than to intentionally do something against the rules of the game. It’s the only game where “if you ain’t cheatin’ – you ain’t tryin’” isn’t a regular mantra among the best players.
"this ball will fit in that fairway"
medical costs and education
Pharmaceutical companies GIVE away more medication than they get credit for. Medicare and medicade are drowning in paperwork and fraud – and there is no end in sight. Until you get people off the government dole – you will never fix the problems we have.
True – there were biases in education 30 years ago. The ones I had to go through was the early stages of these “feel good” kinds of classes where it was more important to feel good about trying than to get something right. Buncha hippies ! :-) They figured we kids were innately smart enough to read and write and do math – we needed to be “taught” how to get along and do everything as a group…hmm…I wonder where that philosophy came from…Karl Marx perhaps ?
"this ball will fit in that fairway"
They have to give it away
Because they charge so much for drugs. $10,000 for a month’s supply of a cancer drug. Are you kidding?
Actually, the government has to get involved to solve health care. HMOs and PPOs are not doing a good job in representing you as the consumer. Actually, an awful job. Tuition for medical school forces doctors to become specialists to pay down their debt in a profitable practice. Medical information systems simply do not exist at a national level. Those are things the government can help with without having to act as a HMO.
The wussification of America is startling to me – that’s a bias all on its own. But, I think the bias in how things are taught (primarily, civics and social studies) has always been around and really can’t be stopped.
by Ryan Ballengee on Oct 21, 2008 1:05 PM EDT up reply actions
how much less..
…would these medications cost if the companies doing the work didn’t have to spend so much time on government red tape ? I know I know – it’s a question that can’t be answered – but the fact remains that government red tape is a huge money pit that costs pharm companies billions every year.
no doubt on the wussfication – good word – I keep getting in trouble using “feminization” – we could start a REAL war in here on that topic. :-)
"this ball will fit in that fairway"
Don't get me started on that topic.
I’ll have to seriously restrain myself.
by Double Eagle on Oct 21, 2008 1:14 PM EDT up reply actions
A lot of the money
that pharmaceutical companies spend is on lobbying to protect their bottom lines. Also on R&D. I think it would be a good move to modify the patent protection laws for medications. They charge so much because they only have 20 years to rake in the cash and have to make back their huge up front investment. Why not let them have residuals on the sale of drugs for years into the future?
Red tape is a really vague word, court. The FDA making sure that drugs get through 3 stages of trials to prove their claims and safety is not red tape. That’s consumer protection.
Wussification is a fun concept to talk about because everyone I know seems to agree about it. So who in the hell are the people that actually do it? Or are they just not friends with me? Haha
by Ryan Ballengee on Oct 21, 2008 2:16 PM EDT up reply actions
what's the record ???
We have 50 comments and replies already on this one… (see how I did that ? pretty sneaking getting in at #50 AND providing a break in the action) :-)
"this ball will fit in that fairway"
I don't really know
I’ll have to check into the admin and see if I can find the story with the most comments. I think we can break this around the Masters next year, though.
by Ryan Ballengee on Oct 21, 2008 12:59 PM EDT up reply actions
really ?
wow. I haven’t been around all that long – but I can’t remember many topics going on past the point where they drop off the first page.
"this ball will fit in that fairway"
Found it
It was actually the LPGA English, Take 2 post with 65. So we are close! The next highest was 35 on John Hawkins’ FedEx Cup 2.0 thoughts.
by Ryan Ballengee on Oct 21, 2008 2:06 PM EDT up reply actions
well what the heck...
…this one makes 66 ! Bring on the champagne !!!
"this ball will fit in that fairway"
#67
by the way – that means you have presided over both of the top threads – do you get a bonus ? :-)
"this ball will fit in that fairway"
Haha, I wish
That would be pretty cool, but I’d “spread the wealth” :)
by Ryan Ballengee on Oct 21, 2008 3:42 PM EDT up reply actions
phhhtt...
…or you could just send it to Washington to voluntarily raise your own taxes ! :-)
"this ball will fit in that fairway"
I always thought that Huckabee's
extra tax fund was a funny idea.
by Ryan Ballengee on Oct 21, 2008 3:50 PM EDT up reply actions
he had a few...
…but he was my choice for the Republican nominee – oh well
"this ball will fit in that fairway"
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