Fiscal Cliff Thread

[coracle]

Looks like I'm right on the money, and not the one with the great depression.

[rb336]

So Energizer, one of the largest manufacturers of disposable batteries FAILS to recognize the shift to new types of batteries, then decides to cut jobs IN SPITE of having RECORD quarterly profits?

So US Cellular FAILS to compete against the big 5 [[I don't think they ever even got to 3G) and drops its home market

So competitors cut into Vestas one-time near monopoly, creating over capacity, and they cut jobs. In Denmark. NOT here.

Ditto Swedish Husqvarna. cuts in Sweden. not here

your "point" is pointless

[oladub]

Here is a list of about 30,000 jobs being eliminated in the first two days after the election. This isn't to say there isn't an even larger list of new hires to offset these job losses. After all, consumer confidence is relatively high right now. Maybe someone can find a list of all the businesses that are going to expand hiring because Obama got re-elected. I did come across one: Tutor Perini just got a couple of NYC subway contract.

http://www.theblaze.com/stories/how-many-businesses-have-announced-closings-or-lay-offs-since-obama-won-a-second-term/

[rb336]

Here is a list of about 30,000 jobs being eliminated in the first two days after the election. This isn't to say there isn't an even larger list of new hires to offset these job losses. After all, consumer confidence is relatively high right now. Maybe someone can find a list of all the businesses that are going to expand hiring because Obama got re-elected. I did come across one: Tutor Perini just got a couple of NYC subway contract.

http://www.theblaze.com/stories/how-many-businesses-have-announced-closings-or-lay-offs-since-obama-won-a-second-term/

Looking at those jobs, it is pretty clear they have NOTHING to do with the elections results. Lead acid battery recycler! oops -- fewer lead acid batteries being made, those that are last longer! Only a fool would view them as such

[Goose]

So Energizer, one of the largest manufacturers of disposable batteries FAILS to recognize the shift to new types of batteries, then decides to cut jobs IN SPITE of having RECORD quarterly profits?

So US Cellular FAILS to compete against the big 5 [[I don't think they ever even got to 3G) and drops its home market

So competitors cut into Vestas one-time near monopoly, creating over capacity, and they cut jobs. In Denmark. NOT here.

Ditto Swedish Husqvarna. cuts in Sweden. not here

your "point" is pointless

so GM fails to market cars that people want or sells cars that are inferior in quality....

oh wait... that doesn't fit your ideology......

[oladub]

Looking at those jobs, it is pretty clear they have NOTHING to do with the elections results. Lead acid battery recycler! oops -- fewer lead acid batteries being made, those that are last longer! Only a fool would view them as such

Yeah, maybe it's just a coincidence that at least 30,000 jobs disappear within 48 hours of Dear Leader's reelection. Except, some of the businesses on the list do defense work and defense contractors were directed to put off layoffs until after the election, oops that should be until after sequestration, to put a shine on obamanomics. The OMB even offered some compensation if sequestration rules were followed. Anyway, some of those contractors just showed up in the after election list having apparently followed the rules.
Obama administration tells contractors again: Don’t issue layoff notices

I was hoping someone would submit a list of 30,000 new jobs offsetting this loss.

[Cincinnati_Kid]

What I don't understand is why the rich won't ante up and pay a little more in taxes, instead of letting most of the tax burden fall in the laps of the middle class? It's quite obvious they can afford to pay more.

[gazhekwe]

And it won't hurt their buying power one iota.

[rb336]

so GM fails to market cars that people want or sells cars that are inferior in quality....

oh wait... that doesn't fit your ideology......

no, it is simply not a fact. even in the dark days of 2006-2009 GM products were increasing in quality, particularly Buick and Cadillac. Their problem was supporting too many brands. Pontiac and Chevy simply cannibalized each other. Now GM is adding workers. Ditto Chrysler. It's amazing how some people still insist something that is and has been a huge success supports their position of failure. My only ideology is pragmatism. Show me verifiable evidence that what I think is wrong and, instead of trying to twist the facts to fit my thinking, i will rethink my position. For 20 years I was a climate change skeptic. I was pro green technology because I enjoy breathing clean air, swimming in clean water and all the diversity and beauty the planet has to offer. I'd also like to eat fish without dioxins and mercury being an issue.

[Cincinnati_Kid]

The GOP believes that it they're taxed too much, it will eliminate job creation, because they are the ones creating the jobs thru small business. But on the other hand, Romney made millions of dollars last year, and he was taxed at 14% which is a lower rate than some upper and middle class households pay. Something is wrong with this picture. They can and should pay more, it's pure greed. And John Boehner says he will fight Obama to the end to ensure that they won't. It's B.S. Some companies owned by the mega-rich have already started to lay off employees, as soon as Obama was re-elected, to show defiance. This gridlock is the reason why this country is going down the tubes.

[JVB]

What I don't understand is why the rich won't ante up and pay a little more in taxes, instead of letting most of the tax burden fall in the laps of the middle class? It's quite obvious they can afford to pay more.

The rich already pay far more than their share. Romney got blasted for his 47% comment, but part of what he was saying is true - most people don't pay any federal income tax. They have no skin in the game, and it's really easy to call for higher taxes when you aren't paying any.

We have a progressive income tax in this country, which means the more money you make, the higher percentage of your income is taxed. Therefore, income is already taxed disproportionately. People always bring up 15% capital gains tax, but that is money that has already been taxed once when it came in as income. You can't compare a 15% capital gains tax, with a 35% income tax because the capital gains is IN ADDITION to any income tax. If you save up $20,000 from your paychecks over the course of a few years and you invest it in something, you've already paid taxes on that income and that $20,000 should now be yours to do with as you please. So if you buy some stocks and they go up in value, or you buy a run down house, fix it up and sell it, or whatever it is you do results in a profit, then that money is taxed again at 15%, even though it was already taxed when you earned it as income. It is disingenuous to compare capital gains tax to income tax because they are two different taxes.

Now if we want to make the argument that capital gains should be taxed higher then that's fine but realize that the more profits from investment that government takes, the less profit there is to reinvest into other things that could result in jobs. To use the $20,000 example, let's say you fixed up a house and sold it for $40,000. You may want to take that $20k profit and go buy another house to fix up. But at 15% capital gain, the government is going to take $3,000 of your profit. Maybe you can still do something with the $17k, maybe you just stick it under your mattress because it's not enough to buy another run down house. Now if they raise capital gains to 35%, the government would take $7,000 leaving you with a lot less money and making the decision not to reinvest a lot easier. $20k can only do so much, $17k can do less and $13k can do a whole let less. So the more money the government takes the fewer options you have as an investor to do something good with your profits.

Government does nothing well, giving them more money to spend inefficiently is never a good idea.

[old guy]

[QUOTE=oladub;349260} I was hoping someone would submit a list of 30,000 new jobs offsetting this loss.[/QUOTE]

On a sad note, I'm reasonably certain there are going to be a lot of new construction jobs in the North Eastern part of the country. A sector of the jobs market that's been a large drag on the economy. True, a number of jobs were also probably lost, but most of those are lower wage jobs in the retail sector.

I realize this isn't going to save our economy and the argument will be that these will only be temporary jobs. Years ago when there was a lack of jobs in this area, my son went down to Florida because they were looking for carpenters a year after one of the large hurricanes swept through the state. He found work the day he arrived and made on average $22.00 - $24.00 an hour and could work as many hours as he could stand. He worked there for over six months, got a job offer in Colorado, couldn't stand being around, as he put it, all the crack heads down there. He left, but said the companies he was working for could have kept him busy for several more years.

In addition, can you imagine how many hot water heaters, furnaces and other appliances will have to be replaced from all the flooding? It looked from the pictures at least, that more than a few vehicles will have to be replaced. How many jobs will be created in construction and manufacturing from this? Who knows? I'll guarantee you that people will be streaming into the area from other depressed parts of the country to become employed and spend money.

I also think that people that can afford to, will be spending money becoming more prepared for what future storms might come their way.

[TKshreve]

Yeah, maybe it's just a coincidence that at least 30,000 jobs disappear within 48 hours of Dear Leader's reelection. Except, some of the businesses on the list do defense work and defense contractors were directed to put off layoffs until after the election, oops that should be until after sequestration, to put a shine on obamanomics. The OMB even offered some compensation if sequestration rules were followed. Anyway, some of those contractors just showed up in the after election list having apparently followed the rules.
Obama administration tells contractors again: Don’t issue layoff notices

I was hoping someone would submit a list of 30,000 new jobs offsetting this loss.

And here is an example of some of those recet layoffs. Outsourcing to China via Bain Capital.

http://www.huffingtonpost.com/2012/1...n_2009025.html

You can say alot about job loss and how to bring jobs back, but we would be doing a tremendous service to ourselves if we closely examined why jobs are disappearing.

Here is another solid piece of reading that covers the outsourcing trend.

http://www.washingtonpost.com/busine...ptV_story.html

So here's how I see it. We have these venture capitalist firms out there that continue to make large sums of money for a few people at the top. They take away jobs from tax-paying middle class families, along with the technology and training that boosts our society in general. Now the people making all this money without adding much [[if any) value to our economy think it is not their responsibility to pay more in taxes as our debt continues to skyrocket. Am I understanding this properly?

[rb336]

The rich already pay far more than their share.

The people who are in the top 5% control 72% of the wealth. They pay around 50% of the taxes. If there are 20 people who regularly eat together, and one of them regularly eats 3/4 of the food, wouldn't the other 19 eventually demand that he pay 3/4 of the bill?

[oladub]

TK, Venture capital companies continue to have a president and congress who accomodates them. I do like the concept of getting past blaming everything on Bush and on to Bain Capital though. The update in blame is overdue. I found a couple of similar articles.

Obama Trade Document Leaked, Revealing New Corporate Powers And Broken Campaign Promises

Substantial elements of wind turbines paid for with federal tax credits, such as towers were made in China.

I'm not sure which is worse, venture capitalists exporting US jobs, allowing venture capitalists to continue exporting jobs, creating new NAFTA like agreements which will make it even harder for US employees to compete, or subsidizing the import of Chinese goods. I do agree with your last couple of sentences though although perhaps in a broader context then you intended.

I'm not sure how this addresses the fiscal cliff however. Maybe you are suggesting that to the extent that US things are manufactured here, taxes are paid, and the federal budget is balanced to that extent. If so, I agree.

[JVB]

The people who are in the top 5% control 72% of the wealth. They pay around 50% of the taxes. If there are 20 people who regularly eat together, and one of them regularly eats 3/4 of the food, wouldn't the other 19 eventually demand that he pay 3/4 of the bill?

OK, and the people in the bottom 47% pay no federal income taxes at all, so what's your point? The only fair system would be a flat rate where everybody pays the same percentage. Set it at 20%, so if you make $1 million you will pay $200k and if you only make $50k you would pay $10k. Sound fair? Or do you just want to confiscate more from people that are better off than you?

[rb336]

OK, and the people in the bottom 47% pay no federal income taxes at all, so what's your point?

Patently untrue, and you make assumptions for things you know not

[oladub]

National Taxpayers Union 2009 data

Top 1% $343,927 pays 36.73% of income taxes
Top 5% $154,643 pays 58.66% of income taxes
Top 10% $112,124 pays 70.47% of income taxes
Top 25% $66,193 pays 87.30% of income taxes
Top 50% $32,396 pays 97.75% of income taxes

Bottom 50% <$32,396 pays 2.25% of income taxes

"“The upper-income cuts return $850 billion over 10 years to the Treasury, simply by reverting to the top rates under Clinton, when the wealthy fared perfectly well, the budget balanced, and growth was much stronger and more broadly shared than in the Bush years,”

wrote Jared Bernstein

, a senior fellow at the Center on Budget and Policy Priorities and the former chief economist and economic adviser to Vice President Joe Biden. “The fact that these upper-income increases hit only the top 2% — and that’s considering both households and small businesses — is also important. They won’t hurt the wobbly recovery, as these folks are not income constrained in the first place.”"

http://www.washingtonpost.com/blogs/...R9aW_blog.html

$85B/year doesn't go very far toward narrowing the $1T/year Obama deficits. I thought that resuming pre-Bush rates on the rich was going to raise something more like $400B/year. Anyone have links showing that renewing previous higher tax rates on the everyone earning over $250K will raise more revenue?

[firstandten]

The rich already pay far more than their share. Romney got blasted for his 47% comment, but part of what he was saying is true - most people don't pay any federal income tax. They have no skin in the game, and it's really easy to call for higher taxes when you aren't paying any.

We have a progressive income tax in this country, which means the more money you make, the higher percentage of your income is taxed. Therefore, income is already taxed disproportionately. People always bring up 15% capital gains tax, but that is money that has already been taxed once when it came in as income. You can't compare a 15% capital gains tax, with a 35% income tax because the capital gains is IN ADDITION to any income tax. If you save up $20,000 from your paychecks over the course of a few years and you invest it in something, you've already paid taxes on that income and that $20,000 should now be yours to do with as you please. So if you buy some stocks and they go up in value, or you buy a run down house, fix it up and sell it, or whatever it is you do results in a profit, then that money is taxed again at 15%, even though it was already taxed when you earned it as income. It is disingenuous to compare capital gains tax to income tax because they are two different taxes.

Now if we want to make the argument that capital gains should be taxed higher then that's fine but realize that the more profits from investment that government takes, the less profit there is to reinvest into other things that could result in jobs. To use the $20,000 example, let's say you fixed up a house and sold it for $40,000. You may want to take that $20k profit and go buy another house to fix up. But at 15% capital gain, the government is going to take $3,000 of your profit. Maybe you can still do something with the $17k, maybe you just stick it under your mattress because it's not enough to buy another run down house. Now if they raise capital gains to 35%, the government would take $7,000 leaving you with a lot less money and making the decision not to reinvest a lot easier. $20k can only do so much, $17k can do less and $13k can do a whole let less. So the more money the government takes the fewer options you have as an investor to do something good with your profits.

Government does nothing well, giving them more money to spend inefficiently is never a good idea.

What you stated is the way capital gains should work and what it was intended to do but Romney and his ilk has gamed the system.

The venture capitalist basically used loopholes that treated the management fees on assets they control as capital gains rather than ordinary income.

And they pay the capital gains rate on portions of the profits earned by the funds they control which is the bulk of their compensation and is, separate from the management fees.

Also to make a blanket statement that government does nothing well is not true. Just look at your military for example.

http://www.nytimes.com/2012/09/06/op...tyle.html?_r=0

[313WX]

Patently untrue, and you make assumptions for things you know not

No, he's right...

http://www.politifact.com/truth-o-me...no-income-tax/

[313WX]

What I don't understand is why the rich won't ante up and pay a little more in taxes, instead of letting most of the tax burden fall in the laps of the middle class? It's quite obvious they can afford to pay more.

Fact of the matter is, long term, everyone will need to pay more taxes AND significant spending cuts will have to be made across the board [[including to Grandma's SS/Medicare and the contracts with Defense companies)

The rate of spending we have now and the historically low tax rates we have now are both unsustainable.

The problem is, Federal Government Spending makes up 25% of the GDP. So there's no question that any real attempt to balance the budget would send us into a recession possibly worse than before [[which we don't want as we never recovered from the last recession).

[JVB]

Patently untrue, and you make assumptions for things you know not

oladub posted the percentages for you. It's a well known fact who is paying all the income taxes.

What you stated is the way capital gains should work and what it was intended to do but Romney and his ilk has gamed the system.

Then there should be rules in place specifically to restrict that type of system gaming. But increasing the capital gains tax rate affects everyone that sells a home, cashes in a 401k, or makes a profit of any amount on just about anything - you do realize that don't you? It won't affect just a handful of billionaires it will affect almost all of us.

Also to make a blanket statement that government does nothing well is not true. Just look at your military for example.

Are you serious? The US military is a perfect example of government bureaucracy and waste.

[firstandten]

Then there should be rules in place specifically to restrict that type of system gaming. But increasing the capital gains tax rate affects everyone that sells a home, cashes in a 401k, or makes a profit of any amount on just about anything - you do realize that don't you? It won't affect just a handful of billionaires it will affect almost all of us.

I think you can make a case for raising the capital gains tax so that most transactions are taxed at ordinary income rates

"It’s also hard to find much evidence that cutting taxes on investment income has led to much economic growth. In the 1980s, for instance, Ronald Reagan actually raised taxes on investment income — and the economy did very, very well. George W. Bush’s capital gains cuts, however, did not lead to such a strong economy"
Quote from Joe Nocera study on Forbes 400. Joe also stated that 40% of that 400 inherited there wealth. So among the investor class you have trust fund babies and the like rather than the job creators that you would hope for.

The article also states that any kind of significant tax reform will have to addresss capital gains since that rate is one of the leading causes of inequality in this society.

http://www.washingtonpost.com/blogs/...capital-gains/

Are you serious? The US military is a perfect example of government bureaucracy and waste.

They get results, they win wars for the most part which is there function. Would you rather have a bunch of government contractors or mercenaries fight the battles, could they do it cheaper and bring the results people want.
I seriously doubt it.

[oladub]

firstandten, One way to possibly move the capital gains tax closer to income rates, or make them the same, would be to factor a cost of living adjustment into capital gains. For instance, if someone has property that appreciates in value over thirty years from $50,000 to $250,000 and $100,000 of that increase in value was due to cost of living increases over that time as measured by the government, then only the remaining $100,000 should be taxed. Otherwise, government created inflation is being taxed at [[presently) 15%. This adjustment might also encourage long range capital investments. Presently, only investments held for less than a year are taxed at a higher rate and certain "collectibles" the federal government discourages are taxed at 28%.

[JVB]

I think you can make a case for raising the capital gains tax so that most transactions are taxed at ordinary income rates

But capital gains have already been taxed once when they were income - now you want to tax them again just because someone is smart enough to buy something that went up in value?

Joe also stated that 40% of that 400 inherited there wealth. So among the investor class you have trust fund babies and the like rather than the job creators that you would hope for.

OK...but 60% earned it themselves and you want to punish them too? And as easy as it is to resent trust fund babies, shouldn't you be allowed to leave your stuff to your kids when you die? Do you think the government should be able to take that and redistribute it to other people instead?

They get results, they win wars for the most part which is there function. Would you rather have a bunch of government contractors or mercenaries fight the battles, could they do it cheaper and bring the results people want.
I seriously doubt it.

They win wars? We just withdrew from Iraq after wasting hundreds of billion of dollars for what? And we've lost in Afghanistan to a loose band of nomadic "warriors" - the same ones we armed and trained to beat the Soviets 20 years earlier. We lost in Vietnam. And all that for trillions of debt? How in the world is that efficient? If anything, the wasted lives and resources of our military should be Exhibit A of everything that is wrong with government waste and inefficiency.