Bill Kristol tells GOP to come back to the table.

Greg wrote:

Robear wrote:

Examples? I highly doubt there's any state cutting X% out of every program. Why would you cut useful and well-run programs at all?

You will laugh, but Alabama does this type of budget balancing. I lived through it twice as a state employee. The state government shrank. Within the government, necessary spending was cut. Each department took the same percentage cut, and prioritized the remaining dollars within each department. State mandated programs could not be eliminated, but there was some discretion.

This is the common misconception I see in these discussions. That's not what was proposed in the Budget Control Act of 2011, which was put together with the procedures established in the Graham-Rudman-Hollings Deficit Reduction Act of 1985. That was designed to bring attention to the deficit by cutting every program equally within a department. There were very few exceptions, and certainly no discretion or choice was involved in picking them, as you describe happened in Alabama. So the Fiscal Cliff plan would have cut useful and inefficient programs equally.

Once state funding increased, prioritization of new spending occurred because people were aware that pro ration was a possibility. There was still fraud, waste, and abuse, but there was not gridlock and an inability to deal with deficits.

Alabama has no gridlock because it has a Republican Senate, a Republican House, and a Republican governor. That's, um, a bit different from the Federal situation, don't you agree?

You cut useful and well run programs for two reasons. First, every program can become leaner and more efficient. Second every program is useful and well-run to at least one person that voted for it, and if that person is a Senator, it is really useful and really well-run.

We have different definitions of "useful and well-run", then, especially as regards the possibility of everything being able to be reduced efficiently. The ability of a business unit to function does have a floor below which it's utility and output begin to drop, so your first assumption is not true. You can't keep slashing budgets and expect programs to just keep producing more and more results. (This has been a lesson learned by many US corporations over the last decade as well.)

Further, I'm looking at "useful and well-run" in terms of what it offers citizens as a service, and how much it costs. What the sponsoring Senator thinks of it is immaterial in an audit situation. That's not an accurate judge of whether something is well-run.

An additional advantage to pro-ration is that it was the law and once the Governor declares the budget to be out of balance, the remedy kicks in without needing legislative authorization. Of course, the legislative branch could raise taxes to balance the budget at any time.

When was the last time they did raise taxes? Also, bear in mind the process differences - Alabama is rational about what they cut, sequestration is not.

Ironically, sequestration is very much like the process used to cut the military bases. Every military base was essential to someone so the process had to be created so that all bases were in jeopardy and prevent the protection of individual bases.

Nope. BRAC cuts were based on an extensive review done within the Pentagon, which looked at the utility of each base as well as current and future needs and other factors, and then made recommendations. After that, the horse trading commenced. All bases were not in jeopardy, except inasmuch as all of them were evaluated. If BRAC had been part of sequestration, then every military base would have been told to cut 10% out of every program it operated, like it or not.

Even if one party controlled the government with an iron fist, they couldn't agree on the prioritization. Howard Dean pointed out that Congress decided how the cuts should be enacted, it was sequestration. They actually voted for across the board cuts.

But you said above that the Alabama state legislature didn't have trouble with gridlock, and the prioritization was done by the departments. That's an example of a unitary party system that contradicts your statement.

Also, Congress decided on sequestration as the most painful way to cut, not as part of normal operations. You know this - it was intended by both sides to force action before the end of 2012, under the belief that no one would be so irresponsible as to not give ground to meet in the middle. So I'm unsure why you want to present this as business as usual. It wasn't.

tldr: The system of sequestration was very different from that used by Alabama to make it's across the board cuts, and Alabama benefited from having the same party in control of both legislative branches and the governorship.

Wanted to address two things:

1. Im sorry but a family making combined $100K is far from rich or even upper middle class in HCOL areas. It just usually means that it's a dual income family who are either college educated or have other specialized vocational skills. Hitting them with a five percent tax rate would be as painful as hitting the average middle class family with a $2K increase. Remember these families often have to pay a lot for student loans, childcare, higher property taxes, etc. And since we're on the subject, the $100-250 K familes are by and large the job creators. These are the relatively successful but not obscenely rich business owners who provide the majority of jobs. If you want to go after the super-wealthy be my guest, but keep in mind that they have enormous power to tell us all to sit on a leather studded dildo while they skip off to Switzerland or Costa Rica.

2. What I'm not seeing in this thread (and maybe it deserves to be in a separate thread) is the question of tax reform. The following article really brought home to me just how f'ed our tax system is if we're not going to take a hard look at closing egregious tax holes.

I present to you the top 10 worst tax loopholes of 2012 - from Apple claiming to be based in Ireland to Microsoft billionaire Paul Allen (the guy who now owns the Seahawks) getting a big mortgage deduction on his yacht, to corporations being given tax exemptions for commiting gross negligence like the Gulf Oil Spill or other tax incentives for relocating out of county.

http://www.villagevoice.com/2012-10-...

jdzappa wrote:

Wanted to address two things:

1. Im sorry but a family making combined $100K is far from rich or even upper middle class in HCOL areas. It just usually means that it's a dual income family who are either college educated or have other specialized vocational skills. Hitting them with a five percent tax rate would be as painful as hitting the average middle class family with a $2K increase. Remember these families often have to pay a lot for student loans, childcare, higher property taxes, etc. And since we're on the subject, the $100-250 K familes are by and large the job creators. These are the relatively successful but not obscenely rich business owners who provide the majority of jobs. If you want to go after the super-wealthy be my guest, but keep in mind that they have enormous power to tell us all to sit on a leather studded dildo while they skip off to Switzerland or Costa Rica.

2. What I'm not seeing in this thread (and maybe it deserves to be in a separate thread) is the question of tax reform. The following article really brought home to me just how f'ed our tax system is if we're not going to take a hard look at closing egregious tax holes.

I present to you the top 10 worst tax loopholes of 2012 - from Apple claiming to be based in Ireland to Microsoft billionaire Paul Allen (the guy who now owns the Seahawks) getting a big mortgage deduction on his yacht, to corporations being given tax exemptions for commiting gross negligence like the Gulf Oil Spill or other tax incentives for relocating out of county.

http://www.villagevoice.com/2012-10-...

That's 100K as an individual for wealthy, not for a family; which, living in the highest COL city in the country, I'd be *very* happy to make.

jdzappa wrote:

Wanted to address two things:

1. Im sorry but a family making combined $100K is far from rich or even upper middle class in HCOL areas. It just usually means that it's a dual income family who are either college educated or have other specialized vocational skills. Hitting them with a five percent tax rate would be as painful as hitting the average middle class family with a $2K increase. Remember these families often have to pay a lot for student loans, childcare, higher property taxes, etc. And since we're on the subject, the $100-250 K familes are by and large the job creators. These are the relatively successful but not obscenely rich business owners who provide the majority of jobs. If you want to go after the super-wealthy be my guest, but keep in mind that they have enormous power to tell us all to sit on a leather studded dildo while they skip off to Switzerland or Costa Rica.

2. What I'm not seeing in this thread (and maybe it deserves to be in a separate thread) is the question of tax reform. The following article really brought home to me just how f'ed our tax system is if we're not going to take a hard look at closing egregious tax holes.

I present to you the top 10 worst tax loopholes of 2012 - from Apple claiming to be based in Ireland to Microsoft billionaire Paul Allen (the guy who now owns the Seahawks) getting a big mortgage deduction on his yacht, to corporations being given tax exemptions for commiting gross negligence like the Gulf Oil Spill or other tax incentives for relocating out of county.

http://www.villagevoice.com/2012-10-...

Do you have a cite on the bolded? My experience from within the tech industry doesn't really align with that statement.

jdzappa wrote:

2. What I'm not seeing in this thread (and maybe it deserves to be in a separate thread) is the question of tax reform. The following article really brought home to me just how f'ed our tax system is if we're not going to take a hard look at closing egregious tax holes.

I present to you the top 10 worst tax loopholes of 2012 - from Apple claiming to be based in Ireland to Microsoft billionaire Paul Allen (the guy who now owns the Seahawks) getting a big mortgage deduction on his yacht, to corporations being given tax exemptions for commiting gross negligence like the Gulf Oil Spill or other tax incentives for relocating out of county.

http://www.villagevoice.com/2012-10-...

I thought there was a surprising amount of discussion on tax reform since the election, actually, mostly because Rep. Boehner thinks it is the preferred way to raise federal revenue instead of raising rates. Also surprisingly, there appear to be a couple of pretty easy way to solve the loophole problems. The easiest would be to make a maximum deduction, similar to how there is a standardized deduction instead of itemizing. With a maximum deduction, it doesn't matter whether you pay a lot for your mortgage, have a lot of job-related expenses, or donate most of your income to charity, you could still only exempt x percent of your income. Now, clearly it's not a perfect solution, and has the same predictable microeconomic effects as any other tax policies, but would as a starting point prevent the super rich businesses and individuals from lawyering down their tax obligations to obscenely low levels, at least in theory.

In some areas $100k isn't very wealthy, but we are talking about a national tax code. Unless you want national tax brackets to be based on the median income of the zip code people are filing in we have to keep in mind the nation as a whole.

You have an image of a $100k family struggling to survive. I assure you that the $50k and $30k families living nearby have their own problems.

Yonder wrote:

Unless you want national tax brackets to be based on the median income of the zip code people are filing in we have to keep in mind the nation as a whole.

That would be a great idea if it wasn't so terrible. Mitt Romney would buy a house in Buttcrack, Idaho and use it as his "primary" residence.

Keithustus wrote:
Yonder wrote:

Unless you want national tax brackets to be based on the median income of the zip code people are filing in we have to keep in mind the nation as a whole.

That would be a great idea if it wasn't so terrible. Mitt Romney would buy a house in Buttcrack, Idaho and use it as his "primary" residence.

Yeah, in addition to being easily gamable, the additional complexity and verification needed would dramatically increase the IRS's operating costs.

Yonder wrote:

In some areas $100k isn't very wealthy, but we are talking about a national tax code. Unless you want national tax brackets to be based on the median income of the zip code people are filing in we have to keep in mind the nation as a whole.

You have an image of a $100k family struggling to survive. I assure you that the $50k and $30k families living nearby have their own problems.

Pfft. There aren't any poor people in NYC.

jdzappa wrote:

And since we're on the subject, the $100-250 K familes are by and large the job creators. These are the relatively successful but not obscenely rich business owners who provide the majority of jobs.

I'll echo Kraint's desire for a citation on that claim, especially details about what kind of jobs are created. There's a world of difference between the quality and number of jobs between an entrepreneur opening a Subway franchise and someone starting the next Google.

jdzappa wrote:

2. What I'm not seeing in this thread (and maybe it deserves to be in a separate thread) is the question of tax reform. The following article really brought home to me just how f'ed our tax system is if we're not going to take a hard look at closing egregious tax holes.

We can have that conversation when the GOP eases up on their ideology that taxes can only be eliminated and tax rates can only go down.

Actually, it's more fundamental than that. Over the past couple of years the GOP (well, the Tea Party) has repeatedly demonstrated its willingness to damage the US economy in the name of blind adherence to a political ideology based on severely flawed and largely disproven economic theories. Until the GOP can prove that it's not the political equivalent of an angsty, surly teenager any discussion of tax reform should be tabled. You're not going to have an informed discussion or intelligent reform coming from the party that's effectively run by a group of idiots who think the government should keep its hands off of Medicare.

Survival of the fittest. We can't waste money on the weak, poor, sick, old, different, people we don't like.

FIXED.

OG_slinger wrote:

Actually, it's more fundamental than that. Over the past couple of years the GOP (well, the Tea Party)...

And they'll have to own up to that Congressional Research Service (or was it the Congressional Budget Office?) report linked several pages back that showed no correlation between reducing taxes on the wealthy and economic growth, instead of just having it rescinded.

What new skill was brought to the White House in the '90s and lead to a balanced budget and massive economic growth? "Arithmetic"

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

KingGorilla wrote:

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

Zero.

But there might be a chance in hell of creating a new top tax bracket that everyone could agree was only for the wealthy that we could tax at extremely high rates. Now the discussion always grinds down into how $300,000 in NYC or San Francisco is just barely middle class or how higher taxes would kill small business owners.

It would be a fairly easy proposition to crunch the numbers to figure out where that new tax bracket should kick in.

KingGorilla wrote:

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

The 95% bracket idea intrigues me. Someone making a million dollars a year would effectively earn less that someone making $65,000 a year at a 22% tax rate. I realize there seems to be a great deal of animosity toward wealthy people lately, no matter how their wealth was accumulated, but this seems wrong.

OG_slinger wrote:
KingGorilla wrote:

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

Zero.

But there might be a chance in hell of creating a new top tax bracket that everyone could agree was only for the wealthy that we could tax at extremely high rates. Now the discussion always grinds down into how $300,000 in NYC or San Francisco is just barely middle class or how higher taxes would kill small business owners.

It would be a fairly easy proposition to crunch the numbers to figure out where that new tax bracket should kick in.

O.o

Do the people saying this ever live in NYC? Seriously - $300k, and I'd be beyond well-off, and into pure luxury in the outer boroughs, or super-comfy middle class in Manhattan.

Yonder wrote:

In some areas $100k isn't very wealthy, but we are talking about a national tax code. Unless you want national tax brackets to be based on the median income of the zip code people are filing in we have to keep in mind the nation as a whole.

You have an image of a $100k family struggling to survive. I assure you that the $50k and $30k families living nearby have their own problems.

100k may not be wealthy, but it's a long damn way from struggling. I make just north of 100k, and I live in Seattle, not exactly a cheap place to live. Mortgage, two car payments and retirement savings are cranking along nicely, thanks. When the wife's working, we're feel wealthy. When she's not, we get by amply on my salary with much less disposable income, and lower rate of savings.

Struggling, it ain't.

Yonder wrote:
Nomad wrote:
KingGorilla wrote:

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

The 95% bracket idea intrigues me. Someone making a million dollars a year would effectively earn less that someone making $65,000 a year at a 22% tax rate. I realize there seems to be a great deal of animosity toward wealthy people lately, no matter how their wealth was accumulated, but this seems wrong.

Nonononono that is not how tax brackets work.

Even with the tiered approach, all income at that top level is so drastically reduced that a million in income over the cap becomes 50,000 dollars.

Nomad wrote:
KingGorilla wrote:

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

The 95% bracket idea intrigues me. Someone making a million dollars a year would effectively earn less that someone making $65,000 a year at a 22% tax rate. I realize there seems to be a great deal of animosity toward wealthy people lately, no matter how their wealth was accumulated, but this seems wrong.

No.

Someone making a million dollars a year would have their first 65,000 taxed at 22%, then another, say, 835,000 taxed at, say, 36%, then the final 100,000 taxed at 95%. I made up the brackets, but what you're espousing is false propaganda intentionally devised to confuse people.

Nomad wrote:
KingGorilla wrote:

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

The 95% bracket idea intrigues me. Someone making a million dollars a year would effectively earn less that someone making $65,000 a year at a 22% tax rate. I realize there seems to be a great deal of animosity toward wealthy people lately, no matter how their wealth was accumulated, but this seems wrong.

Nonononono that is not how tax brackets work.

As an example, let's say that for 0 to $500k the tax rate is 22%. Anything above $500k is 95%. That $65k a year guy is taxed 14.3k and keeps $50.7. The millionaire is taxed $585k and keeps $415k. $415k is a lot more than $50.7k.

Am I the only one who is surprised to find out that jdzappa is reading The Village Voice?

It would effectively be a salary cap.

Nomad wrote:
Yonder wrote:
Nomad wrote:
KingGorilla wrote:

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

The 95% bracket idea intrigues me. Someone making a million dollars a year would effectively earn less that someone making $65,000 a year at a 22% tax rate. I realize there seems to be a great deal of animosity toward wealthy people lately, no matter how their wealth was accumulated, but this seems wrong.

Nonononono that is not how tax brackets work.

Even with the tiered approach, all income at that top level is so drastically reduced that a million in income over the cap becomes 50,000 dollars.

That is factually correct, thank you.

Ah, the $100k argument... Let's just say that income disparity extends far beyond fair tax burdens. The truth is muddled.

100K for an individual is doing really well in even the most expensive COL areas in the country. However, 100k household income in these same areas is struggling to a degree dependent on location, number of roommates and family size.

100k household income in 90% of the U.S. is at worst living comfortably for all but the largest family sizes.
100k individual income in these areas is wealthy.

I think 250k is a much more universally accepted barrier of affluence in this current economy. The murkiness falls off a cliff at lower incomes.

Nomad wrote:
Yonder wrote:
Nomad wrote:
KingGorilla wrote:

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

The 95% bracket idea intrigues me. Someone making a million dollars a year would effectively earn less that someone making $65,000 a year at a 22% tax rate. I realize there seems to be a great deal of animosity toward wealthy people lately, no matter how their wealth was accumulated, but this seems wrong.

Nonononono that is not how tax brackets work.

Even with the tiered approach, all income at that top level is so drastically reduced that a million in income over the cap becomes 50,000 dollars.

If the cap is 1,000,000 and they make 2,000,000, then yes, the net income they generate over a million would be minimal, like it was in the 50s.

This would have a whole lot of funny unintended consequences as people try to re-define income, btw.

Thank you again, Seth and Yonder, for keeping me from having a rage-induced stroke.

Nomad wrote:

It would effectively be a salary cap.

That's true, 95% is pretty ridiculously high. I think my wish is anything between 60% to 75% tax on any income over $1 million a year. Capital Gains counts as income, exemptions can't lower your income tax lower than 50%.

Nomad wrote:
KingGorilla wrote:

So back to what really needs to be done. Anyone want to make odds on a return to the 95% top bracket?

The 95% bracket idea intrigues me. Someone making a million dollars a year would effectively earn less that someone making $65,000 a year at a 22% tax rate. I realize there seems to be a great deal of animosity toward wealthy people lately, no matter how their wealth was accumulated, but this seems wrong.

There's no animosity towards wealthy people lately. There's animosity towards tone-deaf and ridiculous arguments against raising taxes on the wealthy. Big difference.

So the American Catholic did a decent write up, some of the numeric magic of translating 1955 dollars into 2010 Dollars to be sure.

But basically, the really big tax brackets would be at 1.3 million and up.

I'll go ahead and back Yonder up regarding a 95% tax bracket. I think you would just se Ted the Millionaire set up a charity for Ted Jr's Awesome Fund or something to skirt around it. Or something like that.

At one point I saw a chart showing how big taxes on corporate profits encouraged self investment, since money used for infrastructure improvements, retaining talent (I.e., paying workers more), etc, wasn't taxed. I know that corporations continually whine about the US's tax policy vs Europe, but I certainly don't think GE paying negative taxes is a good thing.