Obama: "This is not class warfare -- It's math"

[Teatownclown]

http://www.cbsnews.com/8301-503544_162-20108238-503544.html

About time. See Conan....

[Conan71]

"In response, Mr. Obama said, "I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or teacher is class warfare. I think it's just the right thing to do."'

Curious how George Soros feels about that?

Let's say this was sound financial and economic logic, how do you enforce such an increase?  What's to keep investors from holding and refusing to sell any appreciated assets or other investments to avoid paying higher tax rates if they think a friendlier tax environment awaits them a few years down the road after an administration change?  That or simply move their assets off-shore.  I could also see this tanking the stock market all over again with pensioneers left holding the bag on much de-valued stock because all the largest individual holders wanted to take their gains at a lower tax rate and sold off prior to taxes going up.

The plan also includes about $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare. However, in a nod to his liberal base, the president made clear he would veto any plan to cut Medicare benefits that isn't paired with tax increases on upper-income people.

Nah, no class warfare to see here, folks.

If it's Repugnicans trying to cut Medicare, they are throwing Granny under the bus.

[Teatownclown]

Let's say this was sound financial and economic logic, how do you enforce such an increase?  What's to keep investors from holding and refusing to sell any appreciated assets or other investments to avoid paying higher tax rates if they think a friendlier tax environment awaits them a few years down the road after an administration change?  That or simply move their assets off-shore.  I could also see this tanking the stock market all over again with pensioneers left holding the bag on much de-valued stock because all the largest individual holders wanted to take their gains at a lower tax rate and sold off prior to taxes going up.


If it's Repugnicans trying to cut Medicare, they are throwing Granny under the bus.

How did we ever enforce higher rates? Investors currently are sitting on cash for the most part. If Congress had any leadership smarts, they might just create incentive clauses into the tax code as in the past with deductions for investing and lower rates for cap gains. Seems like your suggestions are fear based.

Looks like you understand about poor Granny and the GOP...

[Conan71]

How did we ever enforce higher rates? Investors currently are sitting on cash for the most part. If Congress had any leadership smarts, they might just create incentive clauses into the tax code as in the past with deductions for investing and lower rates for cap gains. Seems like your suggestions are fear based.

But that's exactly what they are NOT offering if I'm reading his plan correctly.  The logic is that many people making over $1 mil a year are making that off of cap gains and dividends.  What you propose sounds like yet one more layer to an already complex tax code.  Maybe if you could explain in depth the mechanism for how that would work it would begin to make sense.

I'm just seeing that as the rates go up, it becomes even more feasible for people to invest in tax avoidance, especially if dividend and cap gains went to 35% right now.

[Gaspar]

Curious how George Soros feels about that?

Let's say this was sound financial and economic logic, how do you enforce such an increase?  What's to keep investors from holding and refusing to sell any appreciated assets or other investments to avoid paying higher tax rates if they think a friendlier tax environment awaits them a few years down the road after an administration change?  That or simply move their assets off-shore.  I could also see this tanking the stock market all over again with pensioneers left holding the bag on much de-valued stock because all the largest individual holders wanted to take their gains at a lower tax rate and sold off prior to taxes going up.

Nah, no class warfare to see here, folks.

If it's Repugnicans trying to cut Medicare, they are throwing Granny under the bus.

His appointed bipartisan committee is holding a hearing on Thursday about the deficit.  The president's plan was simply an opportunity for a campaign speech to shore up his dwindling and angry base by reiterating the exact same things he promised back in 2008.   He has to get in front of the message this time before the committee proposes something logical (like what happened before with the last committee).  

He knows none of this would ever pass.  There are increased taxes on all energy sectors including many green energy initiatives such as geothermal, and massive tax increases on energy lease properties.  If passed this would drastically increase energy prices in a market where many businesses are teetering on collapse due to energy prices.  The increase in taxes on small businesses would be enough to shut down many and downsize most.  

The plan is simply a promise of wealth redistribution, unfortunately if it was implemented there would be far less wealth to redistribute.  A cut in payroll taxes for working people is only important if people are working. Duh!

Beyond the nonsense of this speech, the thing that makes me mad is that he is now using the presidential pulpit in a time of crisis to campaign to his base.  There was nothing workable, thoughtful, or sustainable in his address.  He is simply using tax payer money to campaign.  What a waste.

Now when the deficit reduction committee comes back with any recommendations he has a basis to demonize them against and fuel continued campaigning from the White House.  This time it won't look like he's blatantly ignoring their recommendations, it will look like they are ignoring his.

[Townsend]

"Class warfare" has apparently become quite the buzzword to throw about.

Not quite "9/11" but it's getting picked up all over the place.

[Teatownclown]

But that's exactly what they are NOT offering if I'm reading his plan correctly.  The logic is that many people making over $1 mil a year are making that off of cap gains and dividends.  What you propose sounds like yet one more layer to an already complex tax code.  Maybe if you could explain in depth the mechanism for how that would work it would begin to make sense.

I'm just seeing that as the rates go up, it becomes even more feasible for people to invest in tax avoidance, especially if dividend and cap gains went to 35% right now.

I avoid taxes at every turn...but if i see I have a gain that needs to be recognized I will take it rather than lose value. So your theory is mistaken.

Congress controls the code. Quit jumping Potus Obama for trying to nudge their dumb a$$e$ forward.

Please, quit playing the fear card. Cap Gains rates will never be at %35 again....unless the gain is over 10 mil per individual...then it should be.

[Cats Cats Cats]

"Class warfare" has apparently become quite the buzzword to throw about.

Not quite "9/11" but it's getting picked up all over the place.

One is a political catchphrase you use to get votes, the other is about taxes.  I don't know what "class warfare" is anymore.  I hear any tax rate prior to 2000 is class warfare somehow.  Which probably means you are full of smile.

[Teatownclown]

"Class warfare" has apparently become quite the buzzword to throw about.

Not quite "9/11" but it's getting picked up all over the place.

YES! It is one entire chapter long in the GOP playbook....right before the chapter on lowering taxes and the one on cutting social security and medicare. Bookend philosophy written by the deep pocket puppeteers controlling the congressional strings.

[Townsend]

One is a political catchphrase you use to get votes, the other is about taxes.  I don't know what "class warfare" is anymore.  I hear any tax rate prior to 2000 is class warfare somehow.  Which probably means you are full of smile.

Is that an attempt to class warfare me Smithers?

[Conan71]

I avoid taxes at every turn...but if i see I have a gain that needs to be recognized I will take it rather than lose value. So your theory is mistaken.

Congress controls the code. Quit jumping Potus Obama for trying to nudge their dumb a$$e$ forward.

Please, quit playing the fear card. Cap Gains rates will never be at %35 again....unless the gain is over 10 mil per individual...then it should be.

I'm not the one playing the fear card, I'm merely going off what the article you posted is saying:

T

he president is also putting forward a measure he's calling the "Buffett Rule" -- named for billionaire investor Warren Buffett -- to compel those making $1 million or more a year to pay the same overall rate as other taxpayers. Taxpayers making $1 million or more often make their fortune through investment income, which is taxed at 15 percent; the top income tax rate is 35 percent.

The plan isn't delineating between dividends or cap gains which is where most investors make their income.

[Teatownclown]

Top tax rate and top cap gains rate are in separate tax columns...dividends are ordinary tax rates...

Using the class warfare excuse/argument as opposed to simple math is the issue....

[Gaspar]

I don't think President Obama is engaging in "Class Warfare."   That would mean he's pitting one class against another in order to benefit from the fog of war.

He's waging a very direct battle though. . .against:

Production of wealth
Production of energy
Private production of goods & services
Innovation as a means of production of wealth
Investment as a means of production of wealth


Basically, when you boil it down, production of any kind is the target.  He is operating on the false premise that there is a finite amount of wealth that can simply be shifted around without loss or gain. He thinks that if you deplete the millionaire, you fortify the poor.  Unfortunatly wealth is only created by those willing to innovate and take risks.  Destroy those people, or their incentive to innovate, and you deplete the quality of life for everyone.  The ship builder will not benefit from the destruction of the ship owner.

[cannon_fodder]

Probably a shock to all, but I largely agree with obamas idea.

Cold hard fact:  democrats won't really cut entitlements to the lower class, republicans won't cut defense or corporate tax loopholes, and neither will really cut medicare/caid or social security.  So the myth of smaller government will remain elusive (persoanlly id love to see a budget freeze, then every year decide what's important and fight over the resources until the deficit is 20% gdp).

So we really do need more revenue.  I'm in favor of doing all we can to tax everyone the same.  Its nuts that my effective tax rate is 40+% while George Kaiser is at 15% (if that). Most capital gain activity is not producing jobs/gdp anyway (I buy stock on a secondary market, I hold, I sell stock).  I don't want that money making activity punished, but why is it better thqn working for a dollar?

If we are both taxed at 25% will he stop making money to spite Uncle Sam?  No, of course not - no moreso than I would stop making money when I hit the next bracket.  Could someone come along and majipulate the code again in the future... yeah.  But since washington is too cowardly to do anything meaningful a bandaid is all we get.

[Conan71]

Probably a shock to all, but I largely agree with obamas idea.

Cold hard fact:  democrats won't really cut entitlements to the lower class, republicans won't cut defense or corporate tax loopholes, and neither will really cut medicare/caid or social security.  So the myth of smaller government will remain elusive (persoanlly id love to see a budget freeze, then every year decide what's important and fight over the resources until the deficit is 20% gdp).

So we really do need more revenue.  I'm in favor of doing all we can to tax everyone the same.  Its nuts that my effective tax rate is 40+% while George Kaiser is at 15% (if that). Most capital gain activity is not producing jobs/gdp anyway (I buy stock on a secondary market, I hold, I sell stock).  I don't want that money making activity punished, but why is it better thqn working for a dollar?

If we are both taxed at 25% will he stop making money to spite Uncle Sam?  No, of course not - no moreso than I would stop making money when I hit the next bracket.  Could someone come along and majipulate the code again in the future... yeah.  But since washington is too cowardly to do anything meaningful a bandaid is all we get.

Unfortunately, Obama isn't proposing such a simplification of the tax code where a billionaire's rate would go to 25% and your's would drop to 25%.  The earlier point I was trying to make is I don't find the tax increase to be meaningful.  Using GK as an example, how much does he really need to pay himself in dividends?  He can just avoid taxes by funneling income through his charitable foundation (not a bad use of it until it winds up in bad investments like Solyndra), so therefore the government collects about the same net amount in tax revenue from GK.

-or-

He could make capital investments in his business empire rather than taking dividends.  That's where you could argue that higher tax rates amongst the rich could help the economy if instead of letting the government tax more of their dividend income, they simply decide to be paid less dividends from their business and plow that money back into the business which might create more jobs either there or elsewhere in the economy.

I know TTC mentioned some time back that when the marginal rate was astronomical, there were many loopholes which encouraged the wealthy to ease their tax burden by hiring and re-investing in the business...am I right TTC or did I take something out of context?