FLASHBACK: Obama Says You Don't Raise Taxes In A Recession
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Former Reagan and HW Bush advisor says Low Federal Tax Rate Means Hundreds Of Billions Of Dollars Lost Annually
source: New York Times
Are Taxes in the U.S. High or Low?
<ADDRESS class="byline author vcard">By BRUCE BARTLETT</ADDRESS><ADDRESS class="byline author vcard"></ADDRESS><ADDRESS class="byline author vcard"></ADDRESS><ADDRESS class="byline author vcard">Bruce Bartlett has served as an economic adviser in the White House, the Treasury Department and Congress.
Historically, the term “tax rate” has meant the average or effective tax rate — that is, taxes as a share of income. The broadest measure of the tax rate is total federal revenues divided by the gross domestic product.
By this measure, federal taxes are at their lowest level in more than 60 years. The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower was 1950, according to the Office of Management and Budget.
The postwar annual average is about 18.5 percent of G.D.P. Revenues averaged 18.2 percent of G.D.P. during Ronald Reagan’s administration; the lowest percentage during that administration was 17.3 percent of G.D.P. in 1984.
In short, by the broadest measure of the tax rate, the current level is unusually low and has been for some time. Revenues were 14.9 percent of G.D.P. in both 2009 and 2010.
Yet if one listens to Republicans, one would think that taxes have never been higher, that an excessive tax burden is the most important constraint holding back economic growth and that a big tax cut is exactly what the economy needs to get growing again.
Just last week, House Republicans released a new plan to reduce unemployment. Its principal provision would reduce the top statutory income tax rate on businesses and individuals to 25 percent from 35 percent. No evidence was offered for the Republican argument that cutting taxes for the well-to-do and big corporations would reduce unemployment; it was simply asserted as self-evident.
One would not know from the Republican document that corporate taxes are expected to raise just 1.3 percent of G.D.P. in revenue this year, about a third of what it was in the 1950s.
The G.O.P. says global competitiveness requires the United States to reduce its corporate tax rate. But the United States actually has the lowest corporate tax burden of any of the member nations of the Organization for Economic Cooperation and Development.
Revenue Statistics of O.E.C.D. Member Countries, 2010
If taxes are low historically and in comparison with our global competitors, how are Republicans able to maintain that taxes are excessively high? They do so by ignoring the effective tax rate and concentrating solely on the statutory tax rate, which is often manipulated to make it appear that rates are much higher than they really are.
For example, Stephen Moore of The Wall Street Journal recently asserted that Democrats were trying to raise the top income tax rate to 62 percent from 35 percent. But most of the difference between these two rates is the payroll tax and state taxes that are already in existence. The rest consists largely of assuming tax increases that no one has formally proposed and that would be politically impossible to enact at the present time.
Ryan Chittum, in Columbia Journalism Review, responded with a commentary that called the Moore analysis “deeply disingenuous.”
Nevertheless, one routinely hears variations of the Moore argument from conservative commentators. By contrast, one almost never hears that total revenues are at their lowest level in two or three generations as a share of G.D.P. or that corporate tax revenues as a share of G.D.P. are the lowest among all major countries. One hears only that the statutory corporate tax rate in the United States is high compared with other countries, which is true but not necessarily relevant.
The economic importance of statutory tax rates is blown far out of proportion by Republicans looking for ways to make taxes look high when they are quite low. And they almost never note that the statutory tax rate applies only to the last dollar earned or that the effective tax rate is substantially lower even for the richest taxpayers and largest corporations because of tax exclusions, deductions, credits and the 15 percent top rate on dividends and capital gains.
The many adjustments to income permitted by the tax code, plus alternative tax rates on the largest sources of income of the wealthy, explain why the average federal income tax rate on the 400 richest people in America was 18.11 percent in 2008, according to the Internal Revenue Service, down from 26.38 percent when these data were first calculated in 1992. Among the top 400, 7.5 percent had an average tax rate of less than 10 percent, 25 percent paid between 10 and 15 percent, and 28 percent paid between 15 and 20 percent.
The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.
</ADDRESS><ADDRESS class="byline author vcard"></ADDRESS>
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source: New York Times
Are Taxes in the U.S. High or Low?
<ADDRESS class="byline author vcard">By BRUCE BARTLETT</ADDRESS><ADDRESS class="byline author vcard"></ADDRESS><ADDRESS class="byline author vcard"></ADDRESS><ADDRESS class="byline author vcard">Bruce Bartlett has served as an economic adviser in the White House, the Treasury Department and Congress.
Historically, the term “tax rate” has meant the average or effective tax rate — that is, taxes as a share of income. The broadest measure of the tax rate is total federal revenues divided by the gross domestic product.
By this measure, federal taxes are at their lowest level in more than 60 years. The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower was 1950, according to the Office of Management and Budget.
The postwar annual average is about 18.5 percent of G.D.P. Revenues averaged 18.2 percent of G.D.P. during Ronald Reagan’s administration; the lowest percentage during that administration was 17.3 percent of G.D.P. in 1984.
In short, by the broadest measure of the tax rate, the current level is unusually low and has been for some time. Revenues were 14.9 percent of G.D.P. in both 2009 and 2010.
Yet if one listens to Republicans, one would think that taxes have never been higher, that an excessive tax burden is the most important constraint holding back economic growth and that a big tax cut is exactly what the economy needs to get growing again.
Just last week, House Republicans released a new plan to reduce unemployment. Its principal provision would reduce the top statutory income tax rate on businesses and individuals to 25 percent from 35 percent. No evidence was offered for the Republican argument that cutting taxes for the well-to-do and big corporations would reduce unemployment; it was simply asserted as self-evident.
One would not know from the Republican document that corporate taxes are expected to raise just 1.3 percent of G.D.P. in revenue this year, about a third of what it was in the 1950s.
The G.O.P. says global competitiveness requires the United States to reduce its corporate tax rate. But the United States actually has the lowest corporate tax burden of any of the member nations of the Organization for Economic Cooperation and Development.
If taxes are low historically and in comparison with our global competitors, how are Republicans able to maintain that taxes are excessively high? They do so by ignoring the effective tax rate and concentrating solely on the statutory tax rate, which is often manipulated to make it appear that rates are much higher than they really are.
For example, Stephen Moore of The Wall Street Journal recently asserted that Democrats were trying to raise the top income tax rate to 62 percent from 35 percent. But most of the difference between these two rates is the payroll tax and state taxes that are already in existence. The rest consists largely of assuming tax increases that no one has formally proposed and that would be politically impossible to enact at the present time.
Ryan Chittum, in Columbia Journalism Review, responded with a commentary that called the Moore analysis “deeply disingenuous.”
Nevertheless, one routinely hears variations of the Moore argument from conservative commentators. By contrast, one almost never hears that total revenues are at their lowest level in two or three generations as a share of G.D.P. or that corporate tax revenues as a share of G.D.P. are the lowest among all major countries. One hears only that the statutory corporate tax rate in the United States is high compared with other countries, which is true but not necessarily relevant.
The economic importance of statutory tax rates is blown far out of proportion by Republicans looking for ways to make taxes look high when they are quite low. And they almost never note that the statutory tax rate applies only to the last dollar earned or that the effective tax rate is substantially lower even for the richest taxpayers and largest corporations because of tax exclusions, deductions, credits and the 15 percent top rate on dividends and capital gains.
The many adjustments to income permitted by the tax code, plus alternative tax rates on the largest sources of income of the wealthy, explain why the average federal income tax rate on the 400 richest people in America was 18.11 percent in 2008, according to the Internal Revenue Service, down from 26.38 percent when these data were first calculated in 1992. Among the top 400, 7.5 percent had an average tax rate of less than 10 percent, 25 percent paid between 10 and 15 percent, and 28 percent paid between 15 and 20 percent.
The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.
</ADDRESS><ADDRESS class="byline author vcard"></ADDRESS>
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Did you even watch the video?
First, as the President said, they didn't raise taxes during the recession, they cut them...again.
Second, the recession is over and has been over for months, we're in the recovery stage. Did the video say we don't raise taxes during recovery too?
Now, if that is not the answer of a government stooge, then what is?
he's making a very technical argument.
finally, the richest in this country have not had a recession - it's been like the roaring 20s all over again. they can afford it. they've received all sorts of tax breaks but you don't see companies/individuals using that money to create jobs.
finally, the richest in this country have not had a recession - it's been like the roaring 20s all over again. they can afford it. they've received all sorts of tax breaks but you don't see companies/individuals using that money to create jobs.
What he said!
The oligarchs have now fully captured the governments —State, Local & Federal of the United States of America. The SCOTUS, Citizens United ruling, which the RepubliKlans gleefully put on steroids by prohibiting the public disclosure of whose funding political candidates to the tune of Billions, possibly snuffs out the United States’ brief 235 year history as a Democratic Republic. Citizens United could be overturned by a future SCOTUS, but that will only happen if a democratic president selects a replacement supreme court justice when one of the fascist five republiklan justices retires or dies.
As of today July 12, 2011, we watch as the RepubliKlans punk President Obama during the bogus wrangling over raising the credit card limit of the United States. RepubliKlan faux saint Ronald Reagan raised taxes 12 times during his eight years in office. Obama responsibly proposes that taxes for the super-rich (the top three-tenths of one percent) which are at a fifty year low, be increased, and the republiklans portray this sound idea as treasonous.
Low information US citizens are unaware of the fact that the grand RepubliKlan strategy for the United States is to return the US back to the McKinley era. No Social Security, No income tax, No regulation of business, No labor unions, No Medicare/ Medicaid, No civil rights law, No EPA, etc. And of course, the RepubliKlans want to rename the Department of Defense back to it’s original name The Department of WAR which was it’s original name up to 1949.
The article below highlights the lunacy of the RepubliKlan position on raising taxes on the super-rich. <SPAN STYLE="background-color:YELLOW"><b>As super-rich US citizen Warren Buffett points out, the tax rate on the super-rich has dropped more than 11% over the last 15 years even as the super-rich’s income has gone up an incredible 900 percent (900%). </b></span>
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<SPAN STYLE="background-color:YELLOW"><b>What has been the growth in wages for 99% of US workers in the last 15 years?? One percent – that’s right 1%.</b></span> The RepubliKlan obstinacy toward raising taxes on the super-rich is just a case of them being slave-bitches for their oligarch masters. It has nothing to do with facts.
Steve Schwarzman, head of the private equity firm Blackstone Group, who earns $1,000,000 per day 365 days a year, verbally scathingly ripped President Obama's suggestion that his taxes be raised. <SPAN STYLE="background-color:YELLOW"><b>He said that "raising the taxes on his hedge fund earnings from 15% to 35% is like Hitler invading Poland." </b></span> Schwarzman's Blackstone Group has been a principal beneficiary of the Wall Street bailout including lucrative contracts with the Treasury Department to manage numerous new financial rescue programs.
In other words for this mother fucker Schwarzman it all about him, greed is good - the virtue of selfishness is paramount.
When does the greed stop??
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Taxes and Billionaires
by Nicholas D. Kristof
July 6, 2011
http://www.nytimes.com/2011/07/07/opinion/07kristof.html
The House speaker, John Boehner, suggests that the Republican threat of letting the United States default on its debts is driven by concern for jobs for ordinary Americans.
“We cannot miss this opportunity,” he told Fox News. “If we want jobs to come to America, we’ve got to give American businesspeople the confidence to invest in our economy.”
So take a look at one of the tax loopholes that Congressional Republicans are refusing to close — even if the cost is that America’s credit rating blows up. This loophole has nothing to do with creating jobs and everything to do with protecting some of America’s wealthiest financiers.
If there were an award for Most Unconscionable Tax Loophole, this one would win grand prize.
<SPAN STYLE="background-color:YELLOW"><b>
Wait, wake up! I know that “tax policy” makes one’s eyes glaze over, but that’s how financiers have gotten away with paying a lower tax rate than their chauffeurs or personal trainers. Tycoons have bet for years that the public is too stupid or distracted to note that in many cases they’re paying just a 15 percent tax rate.</b></span>
What’s at stake is the “carried interest” loophole, and President Obama is pushing to close it. The White House estimates that this would raise $20 billion over a decade. But Congressional Republicans walked out of budget talks rather than discuss raising revenues from measures such as this one.
The biggest threat to the United States this summer probably doesn’t come from Iran or Libya but from the home-grown risk that the nation will default on its debts. We don’t know the economic consequences for America or the world, and some of the hand-wringing may be overblown — or maybe not — but it’s reckless of Republicans even to toy with such a threat.
This carried interest loophole benefits managers of financial partnerships such as hedge funds, private equity funds, venture capital funds and real estate funds — who are among the highest-paid people in the world. <SPAN STYLE="background-color:YELLOW"><b>John Paulson, a hedge fund manager in New York City, made $4.9 billion last year, top of the chart for hedge fund managers, according to AR Magazine,</b></span> which follows hedge funds. That’s equivalent to the average per capita income of 184,000 Americans, according to my back-of-envelope calculations based on Census Bureau figures.
<SPAN STYLE="background-color:YELLOW"><b>
Mr. Paulson declined to comment on this tax break, but here’s how it works. These fund managers are compensated mostly with a performance bonus of 20 percent or more of the profits they make. Under this carried interest loophole, that 20 percent is eligible to be taxed at the long-term capital gains rate (if the fund’s underlying assets are held long enough) of just 15 percent rather than the regular personal income rate of 35 percent.</b></span>
This tax loophole is also intellectually vacuous. The performance fee is a return on the manager’s labor, not his or her capital, so there’s no reason to give it preferential capital gains treatment.
“The carried interest loophole represents everyone’s worst fear about the tax system — that the rich and powerful get away with murder,” says Victor Fleischer, a law professor at the University of Colorado, Boulder, who has written about the issue. “Closing the loophole won’t fix the budget by itself, but it gets us one step closer to justice.”
<SPAN STYLE="background-color:YELLOW"><b>
At a time when the richest 1 percent of Americans have a greater collective net worth than the entire bottom 90 percent, there are other ways we could raise money while also making tax policy more equitable. The White House is backing some of them in its negotiations with Congress, but others aren’t even in play.</b></span>
One important proposal has to do with founder’s stock, the shares people own in companies they found. Professor Fleischer has written an interesting paper persuasively arguing that founder’s stock is hugely undertaxed. It, too, is essentially a return on labor, not capital, and shouldn’t benefit from the low capital gains rate.
Likewise, Europe is moving toward a financial transactions tax on trades made in financial markets. That is something long championed by some economists — especially James Tobin, who won a Nobel Prize for his work — and it would also raise tens of billions of dollars at a time when it is desperately needed. It makes sense.
The larger question is this: Do we try to balance budget deficits just by cutting antipoverty initiatives, college scholarships and other investments in young people and our future? Or do we also seek tax increases from those best able to afford them?
And when Congressional Republicans claim that the reason for their recalcitrance in budget negotiations is concern for the welfare of ordinary Americans, look more closely. Do we really want to close down the American government and risk another global financial crisis to protect the tax bills of billionaires?
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Your ignorance is astounding.
Tellingly, you only highlighted those words instead of just quoting the whole post. Clearly you didn't understand what I was saying so you stuck with what you thought you address and in that, you failed.
Exactly.
How did they even come up with a tax break for corporate jets?
Nothing to see here. Just a bunch of free loaders trying to muscle in on someone else's earnings. I see no reason to argue here as you can't argue against greed. You just defeat it.
Yep. Big Oil and corporations need their greed and freeloading at the expense of the people stopped. I agree fully.
Your ignorance is astounding.
Tellingly, you only highlighted those words instead of just quoting the whole post. Clearly you didn't understand what I was saying so you stuck with what you thought you address and in that, you failed.
Exactly.
How did they even come up with a tax break for corporate jets?
they wanted to encourage companies to buy more jets
im sure netjets has some good lobbyists in dc
they wanted to encourage companies to buy more jets
im sure netjets has some good lobbyists in dc
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