http://trail.motionbased.com/trail/player/7705808

Taxes on who, and how much. History teaches much about swinging pendulums. Except recently.

Excerpt from recent nytimes article on the budget from President Obama. The bolded section is true and not due to the 1% working harder than the other 99%.

“…That agenda starts with taxes. Over the last three decades, the pretax incomes of the wealthiest households have risen far more than they have for other households, while the tax rates for top earners have fallen more than they have for others, according to the Congressional Budget Office.

As a result, the average post-tax income of the top 1 percent of households has jumped by roughly $1 million since 1979, adjusted for inflation, to $1.4 million. Pay for most families has risen only slightly faster than inflation….”

Another point about the rich getting richer model.. there is no correlation to the rich getting richer and any of them working harder, smarter than those in the middle class. Below is an excerpt from the most recent article about a report done on the 1%ers and everybody else… and by everybody else i really mean everybody else. 1% of 390 million people is 3.9 million people. That’s about half the population of NYC. Or exactly the population of the West Bank and Gaza. Also 3.9 million acres of land in Alaska set aside for drilling…in July just before Sarah Palin was picked to be VP. Serious 3.9 million people make most of the money, but actually pay the least amount in tax… that is actually the hard reality relative to income growth.

What the hell is wrong with people…27.6% nearly a 3rd of all federal tax is paid by 3.9 million people. Not correlating to working or anything just taxing. While 386,100,000 or so paid the other 75% or so in federal taxes. SO what would be fair… take away percentage points from the 1%, reduce their tax and plop it on the 75%, whose income and ability to pay is much less…but whose additional share would be small. How much would you take off– 1% so the top one percentage could pay 1% less and we’d make it up by taking the amount that represented and dividing it up among the 386,100,000 people? Problem is those people have had their healthcare go up by 10% or more every year for almost 10 years…

“…

On average, incomes for the top 1 percent of households rose by $465,700 each, or 42.6 percent after adjusting for inflation. The incomes of the poorest fifth rose by $200, or 1.3 percent, and the middle fifth increased by $2,400 or 4.3 percent.

The share of all federal taxes paid by the top 1 percent grew, but only slightly more than half the rate of their growth in incomes because of the tax rate cuts. The top 1 percent paid 27.6 percent of all federal taxes in 2005, up from 22.9 percent in 2003, while the share paid by the middle fifth of taxpayers declined to 9.3 percent from 10 percent in 2003.

…”

Ok what is wrong with the paragraph above? If you say nothing close your browser. I’m not suggesting there is anything inherently unfair, the 1% of hard working successful people deserve to make more than everyone else…not a question…the problem is the relative differentials. Seems inconsistent that historically this seems more of an anomaly than simply, 1% worked harder and were more successful.  Clearly there is a fundamental sense of fairness, common sense that would tell you that say 20% more than everyone else is really good but when difference seems like night and day there is something wrong with the system we all operate under… Capitalism wasn’t intended to do this to an operating society, was it? Here, look at it like this(mostly cause I’m an idiot, forgive me):

• you make 100 dollars
• you pay 31.9% tax on it in 2003 so $31.90 cents
• so you kept $68.10 cents to buy, save or invest (to make more money-presumably tax sheltered)
• you make 142.6 dollars in 2008
• you pay 31.90% tax on in 2009 so $45.49 cents
• so you kept $97.11 cents to buy, save or invest

Anyway, I am not sure what point i wanted to make when i started writing this post… My gut tells me something doesn’t add up. Yes, the 1% pay alot of taxes but relative to the income growth it seems reasonable…and they’re rich. Yes the cost of everything has gone up while the same middle class has not had a over 40% increase in income and yet they pay nearly 20% of all taxes paid. What’s odd to me is that the increases in taxes and potential tax code rewrites would allow most of the rich to take advantage of additional benefits and opportunities to shelter money and lower taxable income in many ways not available to the middle or lower income. Besides that the wealthy tend to ‘live off the interest’ and have been able to get past the hand to mouth stage most of the middle class is trapped in. Not because they are lazy, dumb or not hard  working just the burden should be relative, if income is not increasing than tax shouldn’t increase non-relatively…or in other words if the economics screw the middle then we’re all screwed..

Article from ‘04 on bush tax cuts

Article on the CBO report

Article on the Obama Budget

One man’s opinion, I could be completely wrong.

“But when FASB 157, a statement from the Federal Accounting Standards Board, went into effect in 2007, reintroducing mark-to-market accounting, look what happened.”

This is the crap… that undermines progress in unclenching the choked market full of poopy assets that no one will buy.

“This complicates the marking process. In the absence of market information, an entity is allowed to use its own assumptions, but the objective is still the same: what would be the current value in a sale to a willing buyer. In developing its own assumptions, the entity can not ignore any available market data, such as interest rates, default rates, prepayment speeds, etc.”

What’s fascinating is that the pain is caused by the very financial wizards who lobby’d and committed all this mess.

You can’t teach a fox to guard the hen house. Good news:
9% unemployment = 91% of people are employed, PS 30% unemployment during the depression…

GM, FORD, Chrysler going under = There are new ops for others and consolidation

Stop watching the news and just get to work

9 million mortgages are underwater. = 67 million are not

lost 2 trillion in consumption from the economy = We have a 14 trillion dollar economy – 2

Watch this vid this guy has it right.

He always speaks his mind and is a common sense advocate for the duh! Reality.

http://www.cnbc.com/id/15840232?video=1039849853

Rick Santelli…

Your tax dollars hard at work… or not.

This is not good, I hate (R) and (D), read this when you have free time or not… but understand this is not awesome… for regular people…

Man… our government needs a high-colonic..its a slug-fest.. this is of there own making… M’er F’ers

Do study history, and know our fearless senate/house morons made this mess, sponsored by lobbyists. Glass Steagall… and Gram-Leach

http://www.investopedia.com/articles/03/071603.asp

Glass-Steagall

“Consequently, to the delight of many in the banking industry (not everyone, however, was happy), in November of 1999 Congress repealed the GSA with the establishment of the Gramm-Leach-Bliley Act, which eliminated the GSA restrictions against affiliations between commercial and investment banks. Furthermore, the Gramm-Leach-Bliley Act allows banking institutions to provide a broader range of services, including underwriting and other dealing activities.”  Democratic Action

Check this  out. Painful to read. But enlightening

H.R.1–Title: Making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for fiscal year ending September 30, 2009, and for other purposes.

“2/13/2009 12:01am:

Rules Committee Resolution H. Res. 168 Reported to House. Rule provides for consideration of the conference report to H.R. 1. The resolution provides 90 minutes of debate on the conference report. The resolution waives all points of order against consideration of the conference report except those arising under clause 9 of rule XXI and provides that the conference report be considered as read. The resolution waives all points of order against the conference report. The waiver does not affect the point of order available under clause 9 of rule XXI. Finally, the resolution provides one motion to recommit, if applicable.”

Just so you know what clause 9 is for in the rule XXI.

“Point of Order against Congressional Earmarks

9.(a) It shall not be in order to consider-

(1) a bill or joint resolution reported by a committee unless the report includes a list of congressional earmarks, limited tax benefits, and limited tariff benefits in the bill or in the report (and the name of any Member, Delegate, or Resident Commissioner who submitted a request to the committee for each respective item included in such list) or a statement that the proposition contains no congressional earmarks, limited tax benefits, or limited tariff benefits;

(2) a bill or joint resolution not reported by a committee unless the chairman of each committee of initial referral has caused a list of congressional earmarks, limited tax benefits, and limited tariff benefits in the bill (and the name of any Member, Delegate, or Resident Commissioner who submitted a request to the committee for each respective item included in such list) or a statement that the proposition contains no congressional earmarks, limited tax benefits, or limited tariff benefits to be printed in the Congressional Record prior to its consideration;

(3) an amendment to a bill or joint resolution to be offered at the outset of its consideration for amendment by a member of a committee of initial referral as designated in a report of the Committee on Rules to accompany a resolution prescribing a special order of business unless the proponent has caused a list of congressional earmarks, limited tax benefits, and limited tariff benefits in the amendment (and the name of any Member, Delegate, or Resident Commissioner who submitted a request to the proponent for each respectiveitem included in such list) or a staement that the proposition contains no congressional earmarks, limited tax benefits, or limited tariff benefits to be printed in the Congressional Record prior to its consideration; or

(4) a conference report to accompany a bill or joint resolution unless the joint explanatory statement prepared by the managers on the part of the House and amanagers on the part of the Senate includes a list of congressional earmarks, limited tax benefits, and limited tariff benefits in the conference report or joint statement (and the name of any Member, Delegate, Resident Commissioner, or Senator who submitted a request to the House or Senate committees of jurisdiction for each respective item included in such list) or a statement that the proposition contains no congressional earmarks, limited tax benefits, or limited tariff benefits.

(b) It shall not be in order to consider a rule or order that waives the application of paragraph (a). As disposition of a point of order under this paragraph, the Chair shall put the question of consideration with respect to the rule or order that waives the application of paragraph (a). The question of consideration shall be debatable for 10 minutes by the Member initiating the point of order and for 10 minutes by an opponent, but shall otherwise be decided without intervening motion except one that the House adjourn.

(c) In order to be cognizable by the Chair, a point of order raised under paragraph (a) may be based only on the failure of a report, submission to the Congressional Record, or joint explanatory statement to include a list required by paragraph (a) or a statement that the proposition contains no congressional earmarks, limited tax benefits, or limited tariff benefits.

(d) For the purpose of this clause, the term ‘congressional earmark’ means a provision or report language included primarily at the request of a Member, Delegate, Resident Commissioner, or Senator providing, authorizing or recommending a specific amount of discretionary budget authority, credit authority, or other spending authority for a contract, loan, loan guarantee, grant, loan authority, or other expenditure with or to any entity, or targeted to a specific State, locality or Congressional district, other than through a statutory or administrative formula-driven or competitive process.

(e) For the purpose of this clause, the term ‘limited tax benefit’ means-

(1) any revenue-losing provision that-

(A) provides a Federal tax deduction, credit, exclusion, or preference to 10 or fewer beneficiaries under the Internal Revenue Code of 1986, and

(B) contains eligibility criteria that are not uniform in application with respect to potential beneficiaries of such provision; or

(2)any Federal tax provision which provides one beneficiary temporary or permanent transition relief from a change to the Internal Revenue Code of 1986.

(f) For the purposes of this clause, the term ‘limited tariff benefit’ means a provision modifying the Harmonized Tariff Schedule of the United States in a manner that benefits 10 or fewer entities.”

I was reading an article on recession and noted that Says Law was mentioned a few times, obscurely, but mentioned.

“…A central element of Say’s Law is that recession does not occur because of failure in demand or lack of money. The more goods (for which there is demand) that are produced, the more those goods (supply) can constitute a demand for other goods. For this reason, prosperity should be increased by stimulating production, not consumption. In Say’s view, creation of more money simply results in inflation; more money demanding the same quantity of goods does not represent an increase in real demand….”

The nature of our current econonmy… the making of or production of goods and services, is most likely the answer to the problem… not running a business on credit also mandatory… Money in vs Money out.

A stimulus program may not make much sense based on current business and credit conditions… stimulation of production may be the long term way out… lending for increasing production rather than borrowing for consumption sake seems clearer the answer.