White House Largely Right On Tax Increases Republicans Should Offer Support (Part One

Discussion in 'Current Events' started by JimofPennsylvan, Feb 5, 2010.

  1. JimofPennsylvan
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    JimofPennsylvan VIP Member

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    President Obama is largely right on his revenue raising tax initiatives outlined in his 2011 budget. America is in extreme financial crisis she is projected to run a budget deficit this year exceeding one trillion dollars and over the next ten years never to be below a $700 billion dollars. These deficits are egregiously wrong it borders on the criminal to future generations of Americans who will be left with the heavy burden of paying off the debts created to finance these deficits. Budget cuts alone aren't going to close these budget gaps because they are too large, the U.S. government has to raise revenue! Many of President Obama's tax initiates are fair and responsible and will help with this deficit problem. The Republican party has to stop playing politics on these tax code issues, America desperately needs this revenue at issue here. Republicans are allowing a financial disaster to occur here for America and they have the power to meaningfully mitigate it.

    The Republican party has to recognize its culpability in America's financial crisis and atone for it. It should have enacted revenue raising mechanisms or budget cuts to pay for the Medicare Drug Benefit Program when it enacted this program during the Bush Administration, it should have done the same to pay for the Wars in Iraq and Afghanistan and it should have done the same to pay for the 2003 tax cuts (considering the government projection for the 2003 budget deficit was hundreds of billions of dollars and the actual deficit for that year was $370 billion). The Republican party is up to their chins in responsibility on this deficit issue and they need to accept responsibility and help fix the problem by supporting Obama's legitimate tax inititiatives.

    Not continuing the Bush tax cuts for couples making over $250,000 per year is fair and appropriate, these taxpayers can afford to help the country with its financial problems. Allowing the top individual tax rates to reset to 36% and 39.6% is high but still in the realm of fair. Allowing the capital income and dividend income tax rates to reset to 20% is fair and will still offer a strong incentive for these taxpayers to make capital investments considering their earned income tax rate will be almost double that. Reducing the tax benefit for some itemized deductions for these upper tax bracket individuals so that the tax benefit of their deductions equals the tax benefit middle class Americans would get if they had these deductions (28%) is likewise fair, in these dark financial times the country needs to try to save every nickel as long as it is done fairly and parity of treatment is fair; moreover, this was the law during most of the Reagan Administration. This last point touches on an important point which is that the Obama administration here on this tax rollback on individual taxes for the highest wage earners is not making the tax burden on these wealthier Americans any worse than what existed in the country's modern past.

    The Whitehouse's initiative to tax certain income of investment managers as ordinary income subject to individual tax rates as opposed to capital income subject to the capital income tax rate is likewise fully fair. Apparently, what is at issue is that when investment managers get compensated for their investment management service they sometimes receive their compensation in the form of a certain percentage of the value of the assets left with them to manage and a certain percentage of the profits they make from investing these assets and this has been taxed at capital income tax rates up to now. Common sense and fairness calls for this income to be taxed as ordinary income - it is received as compensation for a service the taxpayer is providing. It is just like a trial lawyer that takes a case a for both a fixed fee and a contingency fee if that lawyer wins the case and then gets a portion of the judgment awarded in the case (the contingency fee) both the contingency and the fixed fee are taxed as ordinary income. Statements made by these taxpayers about the consequences of taxing this income at ordinary income tax rates does not change the nature of how this taxpayer comes to get this income which clearly calls for this income to be classified as ordinary income and this nature should be the controlling factor on this matter.




    President Obama's initiative to reinstate the estate tax at 45% with the proviso that a couple can shelter $3.5 million of their assets from this tax is fair and the right thing to do. The country with the highest priority needs to raise revenue and this manner is a widely accepted means of doing so for a sovereign country. However, the Obama administration should come up with some system that will allow Americans to pass family farms and family businesses to their heirs without crippling, destructive and the like tax bills. America is a country that has the highest regard for principles and it would be good for America to adopt the principle that we want families to be able to pass family farms and family businesses intact from one generation to the next without incurring onerous financial costs, costs that significantly impair this succession of a family legacy from one generation to the next. Maybe make a whole new category of estate tax for these family assets where these family assets are excluded from the outright 45% estate tax but the income from these assets to the heirs for twenty years after the asset passes to the heirs is subject to a forty-five percent tax rate with a $250,000 exclusion. Further, if the plan doesn't already call for it this $3.5 million estate exclusion should be put on an inflation index because it is fair and it will spare the country a lot of political fighting later on as it would have to periodically pass legislation lifting this ceiling based on the inflation rate if it is not put on an inflation index.

    Many of the White House's tax initiatives are truly fair and should absolutely be enacted. Requiring companies to use First In First out as opposed to Last In First Out for inventory accounting to determine taxable income which is usually higher with FIFO because older inventory cost less to produce (manufacturing costs generally increase over time) is absolutely fair. Inventory usually has a time variant to it, it degrades over time or becomes outdated, so business owners naturally would sell older inventory first so that manufacturing costs for the older inventory should be used first. The tax break for companies with international operations should absolutely be eliminated that being the tax break that allows companies to deduct the interest expenses related to the debt used to finance these foreign operations when the income from these foreign operations is not subject to U.S. taxes as long as it is kept off-shore. To do otherwise is allowing these companies to have their cake and eat it too they are treating the American people like fools, the American people are foregoing tax receipts because the business taxpayer is claiming they are an expense connected with a business and the taxpayer expects the U.S. government to refrain from taxing the income from that business, these businesses position is ludicrous and nonsensical.





    See Part Two
     
  2. blastoff
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    blastoff Undocumented Reg. User

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    Do some homework on static vs. dynamic tax revenue forecasting and get back to us.
     
  3. Liability
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    The same president who now wants to raise taxes is the one who has pushed so hard for MASSIVE increases in Federal deficit spending.

    So, what exactly is he "right" about? That we are in a terrible fiscal mess? Yes. That's true, but it is one largely of his own design and making.

    Don't come, hat in hand, now, to get the money to fund the credit card debt you've accumulated in our name, Mr. President, by pointing to the obvious results of what YOU have been doing -- as a justification.

    STOP the spending, you imbecile.

    Stop the utterly reckless borrowing AND spending.

    And now, to get us out of the mess he's largely responsible for (because of his complete lack of buidget discipline) he thinks that one of the "viable" solutions is to TAX THE LIVING SNOT OUT OF EVERYTHING THAT MOVES.

    It's called killing the Golden Goose.

    No.

    No more fucking taxes. CUT the taxes. Cut them here there and everywhere in between. Stimulate the economy in that way. Stop your insane efforts to ruin the economy by strangling it.

    Corporations are NOT "the enemy" you class warfare hyperbole machine.
     
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    Last edited: Feb 5, 2010

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