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Tuesday, August 14. 20122013 Taxes, etc.: I find the entire US Capitol revolting in its grandiosity.Middle-class taxpayers will pay a mere 50 percent of their income in taxes next year! Meanwhile, Auto Bailout Cost Taxpayers $25,000,000,000. I'll say it again: government is a special interest group, and one of the few growth industries left in the US right now. Washington DC is a boom town: people go where the money is.
Taxes are going to rise much further on the middle class. My simple theory is that the Left wants to take the money we all earn in the private sector, take their cut, decide what we need because we are too foolish and feckless to run our own lives, and then expect us to thank them with our votes for the service. They imagine we need care, like sheep, but we just want freedom from them. The Welfare State Industry underestimates the human spirit, and then shackles or cripples people to make their idea come true. Try saving the money to open a corner pizza joint when you're paying a 50% tax rate. Then, try getting a license to sell beer there. Then, consider your employee cost of Obamacare. At some point, people say The Heck With It and you have an empty storefront. That's the way to end up like Euroland, where nobody tries to do anything except to hold on to their safe crappy job, and everybody just waits to retire on the dole to complete their entire safe, spiritless, crappy life while their government betters live it up. Serfdom. It is a mistake for people to ignore the political appeal of the security of serfdom or slavery to the State or the Lord of the Manor, or dependency on the State, as long as those words are not used. Re the photo, I find the entire US Capitol revolting in its grandiosity. What are we - the Roman Empire? Possibly many disagree about that, but, as a New England Yankee with a long pre-revolutionary heritage here, I strongly object to the notion of an imperial city. Those idiots should be meeting in a church basement where they might acquire a little humilty.
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Obama says the auto industry is back and he'd like to do to/for the rest of the economy what he did to/for the car companies. Some of us, with a more jaundiced eye, would say he wants to do for other labor unions what he did for the auto unions while screwing the public. Whatever. Now it is true had GM failed, car sales would probably be less---perhaps even much less---than what they are today. But it should be noted that GM is NOT the real beneficiary of the increase in year-to-year (2011 to 2012) car sales. The largest gains are being made by the foreign car companies. It is Honda that tops the recovery list, followed next by Toyota. The top sellers in the US car market are the Camry, the Accord, the Altima, the Civic, the Corolla, then the Ford Fusion and the Chevrolet Malibu. In all, GM has one car, the Malibu, in the top 10, Ford has two cars, the Fusion and the Focus. Lower on the list, the sales numbers drop off so fast they hardly matter in the scheme of things.
With such anemic sales, can GM long survive as a car company? As a much leaner light truck company, perhaps, but not as the family car company. By the time the GM bailout has played out, we taxpaying shareholders will probably have lost $50 billion or more. That's what you get when the Smartest Guy in the Room takes charge of investing your money (without asking you, of course). Heck, when it comes to managing my money, I'd put more faith in Bernie Madoff. They didn't change the unions, and they didn't change the management, and neither of them had a new thought to change the ways they worked (or failed to work).
Can you say "crony capitalism", boys and girls? Yes, I knew you could. Here's the only issue I have with your analysis (and I think you'll agree): When you state, "but we just want freedom from them", the problem is that "we" are gradually becoming the minority as more and more people acquiesce to becoming government serfs dependent on the lords in Washington to protect them and throw them some table scraps rather than stepping outside the walls of the federal fiefdom and dealing with the sometimes harsh realities of life a a freeman.
Understand your sentiment about grandiosity, and especially humility, but think you neglect context of the time.
We were making an announcement, that we were settled, stabilized, had a true long lasting seat of government (evil in itself I understand). A multitude of church basements wouldn't have had the same effect. An interesting topic/thought you bring up though. I wonder, if every man is a freeman, beholden to none, except his neighbor and fellow church goer, what happens to the outliers. I used to rent from a couple who spent much of their time leading small-scale health projects in Africa. One of their comments was that every tin-pot dictator, as soon as government-to-government aid started coming, spent a huge proportion of it to build a motorway or grand boulevard from the airport to the presidential palace. They desired to show the outside dignitaries that their place was modern and successful, so they copied what impressed them about developed nations.
I used to live in the capital city of a western country a tenth the size of the US. I was friends with several people who worked in the offices of members-of-parliament. One of their issues was that their army had more generals than sergeants. The army's case for this was that they pulled well above their weight in participation in UN peacekeeping missions, and therefore had so many many meetings with general officers of peer forces that they needed that many high-ranking people -- it would be offensive to send junior officers to a meeting attended by higher ranks from other forces. I think the grandeur of D.C. and the various state capitols was a statement that was perhaps necessary at the time. It offends me more, however, that Washington DC is a boom town now. That's all I was saying, statement of the time. We can rue it, only now deal with it.
re "Try saving the money to open a corner pizza joint when you're paying a 50% tax rate. Then, try getting a license to sell beer there. Then, consider your employee cost of Obamacare. At some point, people say The Heck With It and you have an empty storefront. That's the way to end up like Euroland, where nobody tries to do anything except to hold on to their safe crappy job, and everybody just waits to retire on the dole to complete their entire safe, spiritless, crappy life while their government betters live it up. Serfdom.'
Yep. That pretty much nails it. Well said. I would only add that every tax increase reduces disposable income and that in turn reduces economic activity, and that will result in lower tax revenues. As for the Capitol, I think the Barrister is approximately 150 yrs late in his criticism. The marginal tax rate for the middle class might be 50% but for most people the effective tax rate is and will still be much lower than that after deductions. Whether economic decisions are driven by the marginal rate or the effective rate, I don't know. Up to a certain income and tax level, which I have never been privileged in my life to experience, I presume it's the effective rate that matters most. But as income rises and the effective rate climbs due to the growing impact of the high marginal rate, it would not be surprising if people modified their behavior accordingly. Why work so hard if government keeps most of what you earn, then turns around and hands it over to a lot of strangers and freeloaders (by which I include a lot of Obama's rich friends)?
The Barrister: Middle-class taxpayers will pay a mere 50 percent of their income in taxes next year!
How many flaws can you find in this so-called analysis? Anyone? Way back during the New York constitutional debates (1788) Mr. G Livingston was laughed at for this statement regarding the Senate: "What will be their situation in a federal town? Hallowed ground! Nothing so unclean as state laws to enter there, surrounded, as they will be, by an impenetrable wall of adamant and gold, the wealth of the whole country flowing into it. [Here a member, who did not fully understand, called out to know what WALL the gentleman meant; on which he turned, and replied, "A wall of gold — of adamant, which will flow in from all parts of the continent." At which flowing metaphor, a great laugh in the house.]
Would those who laughed then be crying now? The Barrister: Middle-class taxpayers will pay a mere 50 percent of their income in taxes next year!
How many flaws can you find in this so-called analysis? Anyone? If you don't believe that you are paying 50% of your income in tax then you are not doing the math. Not just your federal income tax. Add in your state and local income tax. Then calculate your state sales tax and your property taxes. Then look at the many small fees (taxes) you pay to register a vehicle or boat or license your dog. Don't forget to incluse the 7 1/2% you pay for SS and Medicare. If you are middle class and aren't paying over 50% already in taxes then I would like to know how you did it.
Also if you buy products or rent an apartment you are paying the taxes for the people who make and sell those products or own the apartment or home you rent. Taxes on businesses are passed on to the consumer. You may be correct about doing the math right, but that is not the sort of detailed analysis that was discussed in the linked article. The article mentioned state and federal income taxes, then added Social Security taxes to arrive at a marginal rate of 50%. It never mentioned sales taxes or real estate taxes. IMO, it is wrong to include Social Security taxes in such a calculation. As has been said many times before in this blog, Social Security is a forced savings program. People pay SS "taxes" when they work, but get their withholdings back when they retire. As a savings plan, SS is perhaps not a good one, especially if you die young, but it is a savings plan nonetheless. And while the federal government may have no legal obligation to pay SS benefits if the system runs into serious financial difficulty in the future, it is inconceivable to me it would ever default on its moral obligation to continue paying benefits to retirees.
The title was that taxpayers will pay a mere 50% of their income in taxes. We could nitpick about what part of that is income taxes but the fact remains we pay a LOT of taxes and for many people this tax bill exceeds 50%. Something about that stinks in my opinion. No one should have to give the government 50% of their income. As for SS you could indeed argue that is it forced saving but it is also officially a tax. To disregard the fact that hard working productive people are paying more the 50% of their earnings in tax seems odd to me. Do you pay more then 50% of your income in tax? And if you do not would you stll be so "unconcerned" if they made you pay 50%???
The GM debacle is far worse than we assume. GM has been selling cars with subprime loans. GM is planning to dump the Opel brand in Europe (where it is well-thought-of) and substitute Chevy. Obama's braggadocio about his success at GM is simply false. 20,000 salaried workers at Delphi lost most of their pensions, along with their jobs. The union workers, of course, got their pensions restored. And we've never heard the final story on the dealers— privately owned businesses whose only problem was that they bought their cars from GM and Chrysler. Congressmen rescued some, but many were just shut down.There is an immense scandal there waiting to be told by someone who knows the industry.
Zachriel, you are one of the better trained ones. Smart, nuanced on occasion. But, overall, a commie, of one sort or another. I use 'commie' as a perhaps, ridiculous metaphor, I don't care.
I'd not live in a world you thought just. I'd die fighting hard, first. XRay: I'd not live in a world you thought just. I'd die fighting hard, first.
You mean die fighting facts? We just asked that you view the article with a bit of skepticism to see if it held up. Here's a couple. 28% is the marginal rate. The marginal rate is not the rate you pay, but the rate you pay on income over $34,850, assuming the Bush Tax Cuts expire. As we're talking about a middle class taxpayer, we can use the median household income of about $51,413. Most of that income is not subject to the higher marginal tax rate. The actual rate for a single person taking the standard deduction, is 18%, a little less for a married couple. Another problem is that no one is advocating raising tax rates on the middle class at this point. Advocating for the end of the Bush tax cuts is advocating for raising tax rates on the middle class.
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