Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (587643)	9/27/2010 2:05:46 PM
From: Bill	5 Recommendations Read Replies (1) \| Respond to of 1574478

WANT to give affluent households a present worth $700 billion over the next decade? I It's already their money.

To: tejek who wrote (587643)	9/27/2010 7:35:41 PM
From: TimF	Read Replies (1) \| Respond to of 1574478

If the temporary law is allowed to expire as planned, does that represent a return to normal, or a tax increase? A tax increase. Year X people pay Y% tax, year X+1, people pay Y+Z% tax. That's an increase. Conversely, if some parts of the current rates are extended, should those count as a tax cut? No. People will be paying the same rate, not a lower rate. The first is that it is folly to raise taxes in a weak economy. There is some merit to this argument Not just "some". A lot. And if the primary goal is stimulating the economy Which it shouldn't be at this point. Stimulus doesn't improve the long run or even mid term performance of the economy. It might (in the rate cases when its done right and timed right) reduce the depth of the downturn, but we've already hit the depth and started to move out of it. Times are still bad, but stimulus or any other short term gimmick, isn't the way to deal with that fact. tax breaks to the rich are simply not cost-effective. Numerous studies have shown that the poor spend nearly all of their income, while the rich save a significant amount of theirs. If they don't spend it they invest it, or they save it (making it available for the spending or investment of others). They don't burn it or put it under a mattress. A short term, government debt funded spike in consumer spending, isn't going to get us anywhere useful. We need investment in areas that fit the new business realities. The administration points out that only 3 percent of all businesses earn enough to have to pay any additional tax. But Republicans reply that those 3 percent of businesses earn 47 percent of the income from this entire sector, meaning that the higher taxes would apply to the bulk of small-business income. Which is the most relevant number? The latter, by far. The person who has gets business income from their sales on e-bay isn't going to be the driver of economic growth and hiring. The larger small businesses are. And not just small businesses, medium sized and large businesses as well, but the bigger you get the less likely the income tax is paid on a personal return, and the more likely you have corporate tax instead. Which brings us to the third argument. Conservatives say that to do anything other than extending tax cuts to everyone would amount to “class warfare.” And there right, if perhaps in a fairly weak way. Opposing cuts, and supporting increases for the wealthy is slow class warfare against the wealthy. Each cut or increase might be pretty small as class warfare, but if the arguments and policies of those who are against the lower tax rates are continued, than the burden of taxes on the wealthy ratchets up, as they are excluded from cuts, and other groups are excluded from increases. The best response to that notion comes from Warren E. Buffett: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” Which is of course utter nonsense in terms of tax policy. The burden of federal taxes, whether you just consider federal income taxes, or whether you consider all federal taxes, has been shifting to the wealthy over time. Yes the wealthy have been generating wealth and benefiting from it, but that isn't "warfare", even even the widest, least literal, meaning of the term.