Obama's "New" plan to reduce the deficit

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Of course it makes sense for some groups to pay less.

If you are only bringing home $100/wk a 30% effective tax rate is a lot harder to deal with than if you are bringing home $1000/wk.

I say we graph the income distribution on a log scale, and anyone below the crook of the first big elbow pays nothing. Above that elbow, your rate is defined by your income.

Actually, let's look at that issue. In January 2008, there were roughly $165 trillion dollars in traded securities in the world. These securities are the share capital of publicly traded companies, and the bond instruments issued by them.

What are the major sources of investment in publicly traded equities and debt instruments today:

Hedge funds
Insurance funds
Mutual funds
Official reserves
Pension funds
Private equity
Sovereign wealth

By far the 3 biggest areas of investment are Pension funds (#1), Mutual funds (#2) and Insurance companies (#3). The next largest component are official reserves, which hold less than a third of the value that insurance companies do.

Who owns pension funds? The middle class. Who buys mutual funds? The middle class. Only when we get down to insurance companies do we see a significant level of capital contribution made by other interests. (In this case, commercial interests, not wealthy individuals. The middle class contributes vastly more revenue to insurance companies than do the wealth, in aggregate).

Official reserves are #4 and sovereign wealth is #5 (both government money). Wealthy individuals only make a significant presence in the market in the two smallest sectors: hedge funds (#6) and private equity (#7).

The source for all of this is a Morgan Stanley study reported in The Economist.

Now, I will grant you, this is publicly traded investments so it leaves off a couple of major players--like GM, and the enormous small-business sector.

But let's pause again. Who creates small business? Again, it's the middle class. There is wide variation, of course--professionals like physicians, lawyers and dentists tend to make higher incomes than people running a franchise convenience store or restaurant, for example. But by and large, small businesses that create employment are owned by owner-managers who are earning middle class incomes and they are financed not by the capital of wealthy individuals, but rather by debt financing.

If there is class warfare going on here, it is class warfare being waged by the wealthy who are seeking to have all of the privileges that come with living in a secure and prosperous society without paying their fair share of the costs to maintain that society.

It is the Money Tree Illusion. Enterprise businessmen realize that brains and hard work are necessary to create wealth. The Money Tree Chasers think there is a Free Money machine. These folks create very little and get overly paid for manipulating symbols. Unfortunately the capitalistic system is open to both sorts. If laws are passed to prevent symbol manipulation those laws will also squash the entrepreneurs.

What to do?

ruveyn

You are ignoring the fact that your hike the taxes policy isn't going to help anything, but instead will only make things worse.

The problem right now is all the anti-business policies from the Obama Administration. The big thing causing businesses to not hire is Obamacare.

Absolutely false. Completely treasonous. Are you going to burn a flag, next?

Employers don't have to worry about purchasing health insurance in more civilized nations like Canada or Australia.

*shrug* I work for a company that is hiring. There are 4 positions interviewing for the office i work at alone.

But my Evil Corporate Overlords are very careful about opening positions. Like most companies, they don't want to gamble too much with the possibility of a double-dip recession.

The Patient Protection and Affordable Care Act is a very, very small part of that worry.

Congressional gridlock, OTOH, is a big part.

It is lack of predictability that turns off many risk aversive businessmen. What we are experiencing is a rather gross political cluster f*ck and gang war which engenders no confidence in the public. The current political squabble and "culture war" is producing volatility in the markets and making futures difficult to predict. That is definitely not good for business and destroys any incentive to long term planning and thinking. One of the chronic diseases of the American business scene is the fixation on the quarterly profit and loss statement. Grand visions and designs for the Future do not flourish under such circumstances.

ruveyn

It's also worth noting that some businesses - like the bright little star in the diverse galaxy of a company i work for - depend on government spending.

That money doesn't just get thrown into a furnace. It's true that a lot of it is wasteful and I'm against waste, but a senator's job is in large part to find ways to bring the taxes his constituents have paid right back into their district.

I'm in agreement that on the scale of the next 50 years, this needs to be drawn down.

But right now is a really bad time to start.

It's as though a professional gambler is dying of cancer, and his oncologist has decided that we should start by curing him of his gambling addiction.

As long as congressman buy the votes of their constituents by "bringing the bread" to their districts, the problem will never go away and the waste and fraud will never be brought down. There are some habits that can only be cured by going "cold turkey".

Raiding the treasury to continue in power is the Achilles Heel of democracy. One the government gets into the habit it requires complete breakdown to cure it. Everyone is corrupted. The government, business, the public which soon becomes dependent on the goodies and can't/won't give them up. It is sad. Once in a hole it is impossible to get out of it by continuing to dig.

ruveyn

Sorry, I'm not a far left radical like you. I don't run around burning American Flags.

I'll bite.

List your top ten. Be specific.

1. Obamacare

2. The EPA run wild (regulating dust, among other things).

3. The Government takeover of GM and Chryslar where what should have gone to bondholders (whom were retirees (including teacher pensions)) and giving it to Obama's union buddies.

4. HLRB telling Boeing they couldn't have a plant in South Carolina because it is a right to work state.

5. Giving temporary tax incentives to hire people, yet leaving a likely scenario of taxes being hiked and added regulations would make it far more costly to hire people than the incentives are worth.

6. This constant fight over the tax rates where businesses and individuals are worried about being hit with a huge tax hike if the Bush tax rates aren't extrended by the next time they are supposed to expire.

7. Obama Administration's defying two Federal Court orders regarding drilling in the Gulf as well as plagerism (specifically changing what a report said after the scientists had signed the report).

8. Obama's failed Green Jobs program poster child being Solyndra.

9. Spendulous 1, 2, and now 3.

10. The fact Democrats didn't even attempt to create a budget for fiscal years 2010 (which should have been done in 2009), 2011 (which should have been done in 2010), and the Senate not even attempting to come up with one for 2012 (which should be done in 2011) which is entirely the fault of Democrats in the Senate (Republicans in the House passed a budget).

11. The General out of control spending that has racked up more deficit in 3 years than the entire time George W. Bush was in office.

I said to be specific. Chapter and verse please. The patient protection and affordable care act has a whole basket of regulations in it. Which one is your favorite?



You have failed to refer to a specific regulation. I know a thing or two about environmental regulation and from my perspective the current regulatory regime is somewhere between business as usual and weaker.

Be specific. Cite legislation or executive orders.



In what regard is the government operating GM or Chrysler?

Have i mentioned that you are a lousy speller?

Also, you don't understand how the reorganization of a bankrupt company works. And neither do bond holders, who ALWAYS take it up the posterior in that situation. They think they won't, but they always do. They hold out for 100 cents on the dollar until they get no cents on the dollar. This has never not happened. Refer to the collapse of @home, for example.

GM and Chrysler still exist because of federal intervention. Tell me how you would have preferred it to have gone down.

I recall that Obama tried to put UAW on the board of directors of GM and they declined. Something about not wanting to be on both sides of that bargaining table, I suppose.



Hawaii Labor Relations Bureau? Huh? Totally confused here.



So he gave an incentive to hire people but you fear that he might turn around and punish you for the same. OK. your delusional fears are totally the same thing as reality.



I think you are conflating business tax with income tax. Conservatives seem to do that a lot.

But i agree - they should remove the insecurity by abolishing W's upper class tax cuts now rather than later.



Government does not work that way. In much the same way that a cop can't tell a judge how to rule, a federal judge can't tell the president what to do.



This is not a regulaton or law. You seem to be proposing that an unfortunate photo opportunity is causing economic distress.

Investors get fooled by business plans that sound good only in the form of an executive summary all the time. I should point out that Solyndra had the Bush administration's stamp of approval as well, they just didn't get the loan until Obama.

I myself work for an organization that started out as one sketchy businessman's idea to milk the feds for a few hundred thousand dollars and then fail to produce real results. He (and his wife) are currently facing a lot of litigation, both federal and civil. I never met them but i presume that the insane stories i hear about how they used to run the organization were born of a sick mind that had no concept of how to deal with success. The product i help provide to the government has many faults but it produces undeniable and fiscally responsible results that snatched success from the jaws of failure that the former boss tried so hard, so frequently, to make snap.

He ultimately wound up selling it to the company i work for, and what he did (and didn't do) with the proceeds has landed him in a lot of hot water. I expect to hear within a couple years that he has either ended up in club fed or run for the border.

It's embarrassing. Half a billion dollars embarrassing. But i fail to see how it would make a business owner uncertain of the future. Unless they are selling solar panels with lenses on them.



How do they make the future more uncertain?



Whatever dude.

11. The General out of control spending that has racked up more deficit in 3 years than the entire time George W. Bush was in office.[/quote]

I'm talking about the entire piece of legislation.



Don't tell me you already forgot about the three inch long lizard.



You can try their Chevy Volt which is a big failure.



I'm not going to run everything I type through a spellcheck, particularly for a forum post. I can also see you've gotten desperate, because next you'll likely start screaming about my comma usage.



Secure Bondholders are supposed to be paid first, Obama stepped in and said they would only get pennies on the dollar.

Btw, among the groups that got hosed was the State of Indiana's Teacher Retirement fund.



Bankruptcy being dealt with by the courts and the companies are whittled down into something that actually would work.



They already are on both sides of the Negotiating Table.

With the union’s health fund set to own 17.5 percent of G.M.’s shares and 55 percent of Chrysler’s, the U.A.W. will both represent workers and be an owner, a novel dual role.
http://www.nytimes.com/2009/06/02/business/02uaw.html

They choose the board of Directors as stockholders.



Typo, was referring to the National Labor Relations Board.



More like expect him to pull a stunt like that, and his anti-business policies make that scenario highly likely.



He wants to raise capital gains tax as well, and when people are paid dividends, they get taxed twice.



The Bush Tax Rates should be made permanent and the Democrats need to stop pulling Class Warfare shannigans.



Actually, when a President is breaking the law and a Judge calls him on it, the President is supposed to do what the Judge says. I also find it funny that you seem to have no problem with the plagerism.



You also realize the Bush administration refused to loan this company money and models predicted this company would go broke in September of 2011.



Spending money we don't have and driving us even more into the ground.



House Democrats will not pass a budget blueprint in 2010, Majority Leader Steny Hoyer (D-Md.) will confirm in a speech on Tuesday.
http://thehill.com/homenews/house/10463 ... ass-budget

While they go on to try to blame Republicans, they didn't even need a Republican vote to pass a budget in the House and the Budget is one of the few things that I don't think can be fillabustered in the Senate.

[/quote]

Heh something you couldn't come up with a plausible excuse for?

Lets stop quoting Inayasha what he says has no relation to fact.
and it makes for unreadable conversations.