We are approaching more money talks both state and federal, with the state of MN in shut down due to the failure of the GOP to compromise, as they wage their class warfare on behalf of 7,700 people who earn over 1 million a year. While literally taking the bread out of the mouths of disabled people, children, and the elderly, and actively seek to cut jobs instead of growing our economy and using government to help create jobs, the GOP is protecting the richest from sharing in any costs.
Ed Stein beautifully skewers the GOP and adds a nice swipe at the Religious Right in the analogy to the "GOD is my copilot" motto to those flying in their private jets, be the jets corporate, or the expensive ride of politicians like Palin. The position of the right in protecting every last dime of their largest donors personifies their corruption and their dishonesty in the guise of ideology, of politics as a religion of greed. Another cartoon spot on Ed!
IMO, the Dayton Plan featuring roughly 7,700 millionaires (who would most likely get a higher Federal Income Tax offset from paying an additional 3% to Minnesota) is the wrong focus ... instead it should be MN-GOP plan ... they are willing to spend more IF it is from borrowing more monies from the schools and tobacco fund.
ReplyDeleteThe MN-GOP not only kicks the problem down the road causing more havoc for the schools but by agreeing that the monies could be spent are acknowledging that they agree that Minnesota is not spending frivolously. Since school funding is also related to property taxes, businesses will be more focused on locating facilities in wealthier communtities ... causing even more problems for the schools .... and those on fixed-incomes will see property taxes rise to pay for the schools ... in the end, it is more likely that people will leave Minnesota because of the MN-GOP plan than if Dayton's millionaire tax is approved. BTW, how many millionaires will just restructure their wages to defer the income until later years so as to recieve less than a million this year, but get the deferred compensation sent to the "winter retirement home" in Florida ?
Additionally, has it been publicized sufficiently that state payrolls will be reduced by 5000 regardless of which plan is approved?
Ed Stein apparently forgets that the tax break for corporate jets was part of Obama's stimulus plan.
ReplyDeleteSeriously raising taxes without any spending cuts will not help anything. Everytime government revenue has increased for any reason, Congress has increased spending by just as much or more. You could raise the tax rate on the rich to 90% and we would still be in trouble. Last Friday the White House economic council (3 economists picked by Obama) released a report on the stimulus plan. Among other things it found that every job created by the stimulus cost the taxpayers $268,000. If the jobs are permanent and pay well that isn't real bad but what is horrible is that they found for the past 6 months the stimulus has been costing jobs. Right now we would have been better off if the stimulus had not happened, more jobs would have been created without it. That is from the presidents own hand picked economists.
Another statistic you might want to look at is that government revenues generally hover around 18-20% of GDP regardless of the tax rate. Basically the 7700 millionaires know how to move their money where it can't be taxed or to alter their income to reduce their taxes if you raise the rate.
First of all Tuck (good to see you, as always), no one is proposing taxation only as a solution, but rather taxation (preferably a return to the Clinton taxation rates, as modified by the Obama admin) in conjunction with spending cuts.
ReplyDeleteWhat has brought us to this point is that we had 8 years of spending without taxation to pay for it, while reducing revenues, notably the two wars, but far more than that.
Obama has in less than three years brought about double the job creation than Bush accomplished in 8 years, and did so in a bad economy while Bush largely had a thriving economy that crashed due to inadequate regulation and policing.
Our economy is consumer driven; the measures, such as extending unemployment insurance, which most stimulate jobs and good consumption, have been opposed by the right -- and wrongly so.
The opposition to corporate jets is like the opposition to the auto industry execs flying in them to Washington DC for a handout instead of taking commercial transportation. Just as Obama's plans for the auto industry saved a major U.S. industry AND resulted in the government being substantially repaid, I believe that long term you will find the same true of the stimulus, which has been far more successful than is acknowledged on the right.
What we really need is a greater look at underlying economic problems, including in labor, that became more acute in the economic crisis, but which lurked beneath the surface longer, masked by bubbles in the economy.
And we need to put back in place the laws like Glass Steagal which prevented the worst excesses of boom and bust.
Some changes do need to be made. Glass Steagal would be a good start. Mortgage loans are not investments, they are loans that credit unions and banks can make a profit off of. I got a really good rate on my loan and still over the life of the loan the bank will get back about 192% of what I borrowed.
ReplyDeleteRight now I think Marco Rubio has the best idea. He said every bill he looks at he will ask one question, will this create jobs or cost jobs. If we get back to 3-4% unemployment and don't increase spending the current tax rates are fine. The problem is not that we do not have enough taxes it is that we do not have enough taxpayers.
The problem is that we do not have enough taxes, but that will be one of my next posts. Our revenue has declined significantly over the last decade.
ReplyDeleteThe Right doesn't seem to acknowledge what will or will not create jobs. If they did know, they wouldn't have held extending unemployment benefits hostage.
ReplyDeleteWhatever Rubio says, he DOES the party line.
http://washingtonexaminer.com/blogs/beltway-confidential/2011/06/flashback-ap-stimulus-includes-tax-break-promote-private-jet-sale
ReplyDeleteThe Obama stimulus was for a variety of business planes, not only corporate jets. That would include small planes, the Cesnas etc. The auto company presidents had not just a few planes; they had a fleet of planes to fly one person; that was what they were criticized for, as distinct from say airlines buying jets, or small business owners who flew routinely as part of covering their territories in the Cesnas. It is an important and sigificant detail, much like the limo criticism not involving actual limos.
Our revenues declining over the past decade match the unemployment rate going up over the past decade. And just today I was seeing that 64% of small businesses have no plans for hiring anyone, 19% plan to lay off people. Small businesses are where a large part of our economic growth usually comes from. The main reason given was uncertainty. They have no idea what their taxes will be next yr until this budget deal is done. They have no idea what their insurance costs will be as a lot of them have not sorted out how the new health care law will affect them if it goes into effect. Generally hiring a person for a 40k salary will cost a business roughly 55k by the time you add in benefits, office space, equipment, cell phone, and the companies share of Social Security, Medicare, unemployment taxes. Right now that number could be as low as 50k or as high as 65k depending on what happens with taxes and healthcare. So they hold on to their cash and wait for the government to decide. Whether you blame the republicans or the democrats for the stalemate, the indecision is doing more harm than the deal being offered by either side.
ReplyDeleteSorry Tuck, but the numbers, per the economists at the CBO, and any number of other well-respected economists, link those declines in revenue not to unemployment, (which did not track as closely as you assert), but rather they find a direct causal correlation to tax cuts.
ReplyDeleteIf you cut taxes, you lose revenue.
It is that simple.
By your own admission, those tax cuts did NOT stimulate job creation or economic growth. They never have, there is NO factual support for the claim whatsoever.
Most of those who start up a business do so with modest savings but the bulk of their business is based on loans, not on money from tax cuts. That is a fallacy, and a farce.
There is a very positive correlation to higher taxes, higher economic growth, and lower unemployment.
No matter how much the Grover Muppet, er, Grover Cleveland....er, Grover Norquist crowd says is, repitition doesn't make it true that tax cuts produce economic growth or jobs.