Tax breaks for the rich create new jobs? How?

Originally posted by Chett
reply to post by thewholepicture

 

As far as I read in this post seems to be a lot of mixing apples and oranges. Tax the rich - but calling over 250,000 a year for couples rich ..well they are not. Maybe if we talked about people over a million.
Yes those tax cuts worked, a lot of jobs were created, the first couple of years. NO just keeping them same now probably won't create any jobs, but it might prevent losing more.
A lot of talk here about record profits and stuff ...that is large corporations mostly, whole different question than personal income tax.

stats to back this up?

reply to post by Chett


I agree with you 100%.

This whole "tax the rich" scheme is really intended for members of the upper middle class and NOT for the elites.

As people have already pointed out, the ultra elites can already get away with not paying taxes through the use of legal loop holes.

It is just another ploy in TPTB arsenal in order to eliminate the middle class leaving only the ultra rich and the poverty stricken slaves.

Don't fall for class warfare BS that is being sensationalized by the TPTB!!!!!

The "upper middle class" is not your enemy, they are being screwed royally just like everyone else!!!

Your real enemies are the billionaire bankers and politicians who have stolen everything from you!!!

So what I gather from all this back and forth is that tax breaks for the wealthy do help to create jobs. But the people and the companies receiving these tax breaks are investing and spending it to create jobs and businesses overseas (most likely because its cheaper), which rarely helps the United States.

Why are companies investing overseas and outsourcing jobs, and what can be done to fix this? Because if the rich want tax breaks, they need to invest and create jobs in the US, not elsewhere. Otherwise it creates a situation where the people do not witness any productive use of those tax breaks. And if the government wants more money, they need to quit wasting it and spending it irresponsibly by giving the already insanely rich even more wealth, and calling it a "bailout."

And officials wonder why the people aren't happy with the government or the wealthy.

Some actual constructive reform needs to be done. But is such a thing actually achievable without the reform being abused? History says no, government reform will ultimately be abused. So what kind of common ground can be met where something is actually achieved? Not just in theory, but in fact and practice.

Let's see if I can explain. However, I would like to precursor this with a disclaimer: I have had a bit too much to drink tonight. So if there are any spelling errors, I apologize. Ok, I also own a business, about 10 separate businesses, but all doing the same thing. I have an entity that covers all those businesses. I prefer not to say what the business is for privacy reasons.

Argument 1: Yes, tax breaks let me hire more people. Just like minimum wage, every time it goes up, I have to decide if I can afford to keep someone hired. I live in Las Vegas, where all my stores are located. We have the worst economic climate in the country and I contribute this to consecutive minimum wage increases in the past few years, even during the downturn. I won't argue that they were needed though.

When taxes go down, I plan my hiring around it. I MUST MAKE A PROFIT, otherwise no one will loan me money to open a store and hire more people. I get paid based on my profit and not on the hours I put in. I work 100+ hours each week and stores can earn $40,000k+ each, each year. In most of my stores, I pay over 200,000k in salaries. This may sound like a crapload of cash, but if I wanted to disclose how much debt I have to open these stores, you would probably drop a load. I do believe you can argue that some people WILL NOT plan to hire someone else based on tax breaks, but I do.

Argument 2:
Only if people want to create new companies. Let me tell you my opinion. --> You should want to create your own company. I started out with NOTHING. ZERO. ZIP. NADA. I work everyday. I work very hard. Most people aren't willing to put in 100+ hour weeks, but if you own a company, that is what you need to do. There is always money for financing, but you have to prove yourself, which is something people don't want to do now. Most people just want the cash in hands and the opportunity to delegate people to tasks, but how do the lenders know if you ever will make money if you don't put in a real effort? I have started 3 companies in my life and the first two were failures... Complete failures. However, my current company which is going strong has ups and downs, left and rights... most of which people do not want to deal with, unless it's the ups and the rights.

Argument 3:
I pay a tax on ALL my profits, and I also match all the taxes that employees have to make. Per store I can pay $50,000+ (times that by 10) for matching alone (some years, these taxes are over my profits; also remember the company has to make a separate profit), before I even get to count my profits. I am even uncertain if a store will make a profit because it depends on YOU, the customer. However, I AM the one who is taking the risks, getting the loans, and spending the money. If my stores fail, I am the one who suffers, not the guy/girl who works for me. I will argue for you and say YOU are talking about the PARIS HILTONs of the world who don't have to pay their fair share.

Sorry, I am a bit drunk tonight and this stuff pisses me off. I would actually write this much better, more formal and with 25 cent words like everyone works so hard in doing on here, but I don't feel like it. Plus I left logic outside and went with emotion (maybe some logic).

EDIT: Removed insanely large quote of OP

This argument, among others is ridiculous.

We're arguing over CRAP that doesn't even put a dent in the national debt whatsoever.

Get smart.

The Federal Reserve is now pumping 600 Billion + into our monetary system.

What does that do to buying power in relation to the US dollar?

It makes the US dollar worth LESS, your salary worth LESS (your recent pay raise is now WORTHLESS), and your buying power is NOW LESS.

Didn't anyone here learn economics?

Cut taxes. It doesn't matter anymore. We're screwed as long as the Federal Reserve can do WHATEVER IT WANTS without approval of US citizens, whom, BTW, are supposed to run this country through voting power. Oh, wait... The ELECTORAL COLLEGE votes, not US Citizens. While the electoral college is SUPPOSED to vote based on the popular vote, they ARE NOT bound by law to do so, and they DON'T.

Do some research.

reply to post by thewholepicture


Haha, love the article headline. I've known they've been lying to us for quite some time since "trickle-down economics," which economists now admit doesn't work, so the fantasy continues to crumble, and I await mid-January 2011 when financial anarchy will likely take place...

reply to post by thewholepicture

The clothes you wear, the car you drive the food you eat, the electricity you burn, the flooring you walk on the, computer you are reading this on.

Almost everything you but comes from a rich person, or corporation, the more you tax them they just pass it along in your cost for goods.

That is unless you are given everything you own including the food in your belly.

reply to post by ACTS 2:38


You forgot subsidies... No, really.

The fact is that China OWNS us because of our politicians; Started by Richard Nixon and carried on by every other president including democrats the electoral college has elected since that time.

There is no argument. Corporations rule this nation. Profit is king, the populous are peasants.

They screw you too, every day.

The only difference between you and your enemies? You like it.

Originally posted by Buckwylds
......
Sorry, I am a bit drunk tonight and this stuff pisses me off. I would actually write this much better, more formal and with 25 cent words like everyone works so hard in doing on here, but I don't feel like it. Plus I left logic outside and went with emotion (maybe some logic).

Maybe you shouldnt have taken on so much debt. How can you preach fiscal responsibility to the government when you yourself are in the same situation regarding credit?

Maybe if you hadnt taken on debt, you would have better profit margins.

Owning one business, much less multiple business, you are better off than most Americans unless you are failing. If owning your own business sucks so bad, go back into the work force.

PS sounds like you need to hire a tax lawyer

reply to post by 46ACE


I just used 90 as an arbitrary number. Could've said 60, or 70 or any other number and the point would have been just as valid.

As to the 5 guys having a beer- totally different scenario. In that scenario all five are getting an equal part to each other, and of course it should cost each of them the same. A much better scenario to explain what I'm saying is this one. Let's say those five guys all decide to split a bottle of tequila, guy 1 drinks 5% of the bottle, guy two drinks 10%, guy 3 drinks 20%, guy 4 drinks 25% and guy 5 drinks 40%. Now let's say the bottle cost $100 at the bar they're at. Shouldn't guy 5 pay his $40 for what he received, instead of claiming guys 1 and 2 should pay more than their meager shares? Since guy 5 drank 40% of the bottle, he should pay for 40% of the cost. That's all I'm saying. Any number can be inserted there, 90 was just the one I chose in my previous post.

Originally posted by ACTS 2:38
reply to post by thewholepicture

 

The clothes you wear, the car you drive the food you eat, the electricity you burn, the flooring you walk on the, computer you are reading this on.

Almost everything you but comes from a rich person, or corporation, the more you tax them they just pass it along in your cost for goods.

That is unless you are given everything you own including the food in your belly.

And where are these products manufactured?

It was never a founding principle of this nation to have anyone dependent on govt. Nor was the intention to ever have those with more support those with less. All that was ever intended was that someone could make as much or as little of their life as they could accomplish.

I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.. --Thomas Jefferson

A wise and frugal government which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government. – Thomas Jefferson

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. --Thomas Jefferson

Government is not reason; it is not eloquence; it is force. Like fire, it is a dangerous servant and a fearful master. – George Washington

To take from one because it is thought that his own industry and that of his father’s has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association—the guarantee to every one of a free exercise of his industry and the fruits acquired by it. --Thomas Jefferson

The problem is that, as time has gone on, dependence on govt has become institutionalized and generational. If there is a problem, much of the country says 'what is govt going to do to help me'. Well it is not the role of govt to ensure everyone is supported. No one has any right to the fruits of labor of anyone else. Logically, yes the wealthy have more ability to pay more to support others, but many of you are missing the point that none of us have a right to their money. The problem is not the wealthy, ladies and gentlemen, but our large federal govt. They spent too much, over promised to everyone, and have incentivized dependence on govt. Don't blame the wealthy. The wealthy in the US donate more to charities than the rest of the world combined. If some or many are greedy, so be it, thats their right. But no one is entitled to their money. No one is entitled to fairness of outcome.

Originally posted by johnny2127
Logically, yes the wealthy have more ability to pay more to support others, but many of you are missing the point that none of us have a right to their money. The problem is not the wealthy, ladies and gentlemen, but our large federal govt. They spent too much, over promised to everyone, and have incentivized dependence on govt. Don't blame the wealthy. The wealthy in the US donate more to charities than the rest of the world combined. If some or many are greedy, so be it, thats their right. But no one is entitled to their money. No one is entitled to fairness of outcome.

I would agree with you, if this were 1776. But its not. The world has changed so much, and been tipped in the bankers favor, to an unreturnable degree. Not only that, alot of people want what they have paid into the system over their life. Plus we have old wars to pay for, the care of those soldiers, interest on our debt, etc. etc.

Everyone likes to was wax poetic about how welfare is stealing all their money, but we spend more money on federal pensions than welfare. We spend more on defense than on welfare, and welfare costs us only 5x more than the department of transportation.

www.usgovernmentspending.com...

The ability to take care of its citizens demonstrates a capable and just government.

If one more person tell me about how lazy welfare thieves steal all their money, Im going to lose it, because that viewpoint, especially when looking at our budget, is callous and frankly, offensive and shows a complete ignorance of facts.

Originally posted by aching_knuckles

Originally posted by johnny2127
Logically, yes the wealthy have more ability to pay more to support others, but many of you are missing the point that none of us have a right to their money. The problem is not the wealthy, ladies and gentlemen, but our large federal govt. They spent too much, over promised to everyone, and have incentivized dependence on govt. Don't blame the wealthy. The wealthy in the US donate more to charities than the rest of the world combined. If some or many are greedy, so be it, thats their right. But no one is entitled to their money. No one is entitled to fairness of outcome.

I would agree with you, if this were 1776. But its not. The world has changed so much, and been tipped in the bankers favor, to an unreturnable degree. Not only that, alot of people want what they have paid into the system over their life. Plus we have old wars to pay for, the care of those soldiers, interest on our debt, etc. etc.

Everyone likes to was wax poetic about how welfare is stealing all their money, but we spend more money on federal pensions than welfare. We spend more on defense than on welfare, and welfare costs us only 5x more than the department of transportation.

www.usgovernmentspending.com...

The ability to take care of its citizens demonstrates a capable and just government.

If one more person tell me about how lazy welfare thieves steal all their money, Im going to lose it, because that viewpoint, especially when looking at our budget, is callous and frankly, offensive and shows a complete ignorance of facts.

60% of the US federal budget is on entitlement spending programs, with that scheduled to soar higher. We borrow 42% of our budget in the bond market right now. Regardless of how you look at the numbers, entitelement programs are out of control and bankrupting this country.

You are right that times are different than 1776, but the same principles of govt should still apply. If they had adhered to those same principles, the banksters wouldn't have gained the power they have. If we had adhered to them, we would have stayed out of many of the useless wars we have been in. Of course we cannot instantly go back to a govt like was intended by the founding fathers and the constitution. But we do have to move dramatically in that direction. Taxes are a fact of life that are not going away. But the attitude that many people have is that they are somehow entitled to the money of the rich. Or that govt is responsible to their lives or making things easier. That just isn't the case. If we do not dramatically re-institute many to the principles intended for our govt, what we are seeing in Europe is a preview of what will come here. Like it our not, cuts to entitlement programs are coming because there will be no other choices. We can either choose to do it on our own and it will be less painful, or it will be forced on us by those lending us money. That would be the most painful thing faced by this nation in a long time. And it was our govt losing sight of its founding principles that lead us to this point.

Originally posted by johnny2127

60% of the US federal budget is on entitlement spending programs, with that scheduled to soar higher. We borrow 42% of our budget in the bond market right now. Regardless of how you look at the numbers, entitelement programs are out of control and bankrupting this country.

How can you blatantly lie like this, when I linked to you the 2010 budget in the last post. If you had even bothered to glance at it, much less study it, you would see that your 60% number of entitlement programs is nowhere to be found.

Please go to the budget page I linked, and explain to me how you see 60% of our tax money paying for entitlements...we spent more on federal pensions alone than we did on welfare. We spent more on military alone than welfare. So right there, welfare is at less than 35% of our spending.

Please explain to me how you got your numbers of 60% of tax money going to entitlements programs.

reply to post by aching_knuckles


Sure no problem. I don't think you understand what constitutes 'entitlements'. Its not just welfare, as you seem to think. Social security, Medicaid, Medicare, pensions, welfare, food stamps, etc all are entitlement programs. Before you flip out about pensions being included, I need to explain. The US govt has a program called the 'Pension Benefit Guarantee Corporation' that basically takes over paying the pension of retirees for companies that cancel their pensions through bankruptcy or going out of business. The US now pays these people their pensions even though they never had a funding source for it. Also, for your website, social security is filed under the 'pensions' section.

So here's how the numbers break down for 2010:

Social Security: $721.5 Billion (19.4%)
Welfare: $557.3 billion (15%)
Medicare: $457.2 billion (12.3%)
Health care vendor payments for Welfare: $335.2 billion (9%)
Health care for veterans: $55.2 billion (1.4%)
Entitlement portion of debt interest: $106.8 billion (2.9%)


With a budget of $3.72 Trillion, that spending listed above equals 60% on the nose. All the numbers are from the same site you gave me. The difference is, you only called 'welfare' entitlement programs.
Source: www.usgovernmentspending.com

Its all moot.

The US has driven down the same dead end as the UK.

Tax the rich, don't tax the rich, meh... doesn't matter. The problem is that the manufacturing has gone. Therefore you cant make money by selling to world.

How can an economy be viable when its based entirely on consumption. It cant. The economy is a corpse animated purely by government borrowing trickling down. Doesnt matter how much you give the rich they are smart enough to invest it overseas. Thats why they are rich.

Originally posted by johnny2127
reply to post by aching_knuckles

 

Before you flip out about pensions being included, I need to explain. The US govt has a program called the 'Pension Benefit Guarantee Corporation' that basically takes over paying the pension of retirees for companies that cancel their pensions through bankruptcy or going out of business. The US now pays these people their pensions even though they never had a funding source for it. Also, for your website, social security is filed under the 'pensions' section.

I don't mean to butt in on your conversation but seeing how I am an X trustee of a multi-employer benefit trust fund with assets in excess of 450 million, I thought I might point out some mistruths in your statement.

The PBGC was created in 1974 under the ERISA act and not all pension plans are covered, only defined benefit plans are covered and they do indeed have a source of funding. Namely, insurance premiums paid by the plans themselves as well as investment income and other sources. The important thing to note is that the PBGC receives no funds from general tax revenues. Kinda the opposite of what you are attempting to get others to believe.

Here is a site where you can verify what I'm saying; www.pbgc.gov...
and here's a little snippet from that site; PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.

You might also want to take note of the fact that multi-employer plans enjoy a much lower insurance premium due to the fact that their pension plans are the result of collective bargaining agreements, managed by joint labor/management trustees and much less likely to fail. It's the single employer pension plans that make up the high risk category. www.pbgc.gov...

How Pension Plans End:
An employer can voluntarily ask to close its single employer pension plan in either a standard or distress termination. In a standard termination, the plan must have enough money to pay all benefits, whether vested or not, before the plan can end. After workers receive promised benefits, in the form of a lump-sum payment or an insurance company annuity, PBGC's guarantee ends. In a distress termination, where the plan does not have enough money to pay all benefits, the employer must prove severe financial distress—for instance, the likelihood that continuing the plan would force the company to shut down. PBGC will pay guaranteed benefits, usually covering a large part of total earned benefits, and make strong efforts to recover funds from the employer.
In addition, PBGC may seek to close a single-employer plan without the employer's consent to protect the interests of workers, the plan, or PBGC's insurance fund. PBGC must act to terminate a plan that cannot pay current benefits.
For multiemployer pension plans that are unable to pay guaranteed benefits when due, PBGC will provide financial assistance to the plan, usually a loan, so that retirees continue receiving their benefits.
Premium Rates:
Pension plans pay PBGC yearly insurance premiums. Since 2007, the flat premium rates are adjusted annually. The rates for 2010 are: $9 per worker or retiree in multiemployer plans and $35 per worker or retiree plus $9 for each $1000 of unfunded vested benefits in single-employer plans. The rates for 2011 are $9 per worker or retiree in multiemployer plans and $35 per worker or retiree in single-employer plans. The variable-rate charge for single-employer plans will not change.

The one other thing that you might notice here is the fact that struggling multi-employer pension plans, (unions) usually get loans when they are in trouble whereas single employer plans get bailed out.

If we're going to paint a picture, let's make it as realistic as possible. What do you say?

reply to post by Flatfish


I know how the PBGC works and it was a very small part of my statement about the costs associated with entitlement programs. In fact its so small I didn't even add a line item for its costs. I was more illustrating the types of pensions included in the entitlement program universe. And again, the PBGC is an exceptionally small part of the entitlement problem. I appreciate your expertise on the subject, but pension plans, their tax benefits, and ERISA law are not part of the the problem. In fact its more off subject.

Regardless, 60% of federal govt spending is on entitlement programs. 42% of our budget is borrowed. Govt is too bloated. No way around that.

reply to post by johnny2127


Well then, now that we've eliminated the PBGT, let's talk a little about the other "entitlement" programs you speak of in your post.

Social Security & Medicare; Call me old fashioned but I always thought that these two programs were supposed to operate on the same principles as an insurance policy or an annuity and that the government involvement was to insure their not for profit status. I mean don't workers and employers pay premiums, in the form of payroll taxes specifically destined for these programs, to insure a benefit later in life? When I pay for an insurance policy, I expect them to pay their claims.

The biggest single problem that plagues these programs is the fact that they have both exceeded their original design limits. That's not to say that both don't have waste, fraud & abuse problems as well but you don't shut down a business for WF&A, but rather you pinpoint the source of the problem and eliminate it.

Both of these programs were initiated at a time in american history when there were 3 people working for every 1 retired and neither program was designed to adapt to the ever increasing life expectancy of the american worker, much less to pay for some of the super expensive medical procedures that help us to live that long. Much like the minimum wage in America, the revenue sources for S.S. and Medicare have stagnated while inflation and longer, more expensive life expectancies have whittled away at their balance sheets. Both are currently underfunded and believe it or not, there is a easy fix. Check out this article on BlueNC regarding the subject, the poster is dead on. www.bluenc.com...

Welfare; I could be wrong on this one but personally, I believe that our welfare dilemma is directly associated with our failing educational system. If we can't produce graduates that are worthy of employment then should we really expect the welfare budget to shrink? It going to take a real investment in education to reverse the trend and when I say "investment," I don't necessarily mean in dollars. We to to look at what's working around the world and make adjustments accordingly. You can't make me believe that Americans are incapable of achieving the same levels success being enjoyed by other nations. Of course our welfare programs have their own share of WF&A as well.

Health care vendor payments; I agree that this expenditure is way too high but we probably disagree on the cause. IMO, a single-payer, not for profit health care plan is the best answer. Fundamental health care "insurance" should be administered on a not for profit basis, period. If you utilize the current profits being taken out of the picture by private insurers, not to mention the money they spend funding entire departments whose sole job is to find a reason "not" to pay claims, and utilize it to provide actual coverage, we can achieve the biggest bang for our tax dollars. Every other industrialized nation does it this way and they spend less per capita on health care than we do and their health statistics are far better than ours. Like education, there are things that we could learn from other nations. I'm not saying that we should copy their plans, just that we should incorporate the best of their ideas into ours creating a sort of hybrid plan.

Health care for vets; This may surprise you but I think that this expenditure is probably too low as I constantly see stories about vets with PTSD and other disorders that are not getting proper attention. We should take care of our vets regardless of the cost, otherwise don't send them to fight in illegal wars.

Anyway, I think that the main reason that these programs are referred to as "entitlement" programs is because we paid for them and we are therefore entitled to receive the benefits we paid for, otherwise we've been robbed. I believe the real elephant in the room is "discretionary" spending which includes spending on unnecessary military hardware in support of the industrialized military complex. Seeing how we spend more on our military than the next largest 27 industrialized nations and 26 of them are our allies, how about if we spend half that much and see if anyone attacks us.