dagblog - Comments for "Should We Raise Taxes On The Middle Class?"

think JFK's tax reductions

EmmaZahn — Fri, 22 Jun 2012 00:49:48 +0000

In reply to Why do you feel there is a

think JFK's tax reductions were the start of the downfall of the country

Yes, but not for the reasons you may think. More or less coincident with those tax reductions, the Fed set up its Open Market Committee and Primary Dealer system. The rationale for a Primary Dealer system was and is to create a sure market for government debt. For certain market maker privileges they are obligated to bid at auctions. Basically they are government debt salesmen.

Whether planned or not, that system would be able make up any shortfalls in government spending that resulted from the tax cuts effectively masking them from the general public. And who better to sell our debt to than the extremely wealthy who just came into a windfall? Imagine their joy. They not only get their tax break but a nice safe income on it as well.

It wasn't a bad plan. Certainly it was worth trying and we did learn a lot about how money works but like all such schemes, people got greedy, there were unintended consequences and things eventually got out of hand. So here we are.

Everybody who owns a

Dan Kervick — Fri, 22 Jun 2012 00:14:09 +0000

In reply to Anyone who works for any part

Everybody who owns a financial asset that is gaining value has unearned income - or at least a claim on unearned income to be delivered in the future. You have some money; you buy the asset; you wait a bit and do no work connected with the operations in which the funds are invested, and - voila! - you have more money. Amazing!

We're almost all capitalists now. That is, most us possess some partial ownership stake in the work product of other people. Maybe that means most of us are at least a little stained with the mark of the slavemaster.

So, sure, let's begin to go after that unearned income. As Robert Frost put it in another context, "Who's to say where the harvest will stop?"

I was thinking about this. I

Richard Day — Thu, 21 Jun 2012 23:54:24 +0000

In reply to Should We Raise Taxes On The Middle Class?

I was thinking about this.

I suppose the plan would go like this:

The taxpayer's first mortgage payment shall be deducted as 1/2 of the interest payment.

The second third and fourth mortgage payment shall be deducted as 95% of the interest payment.

The fifth mortgage payment shall be enhanced by 500% as far as the deduction for interest payment.

WHAT'S FAIR IS FAIR!

Off-on-a-tangent-thought: Do

MrSmith1 — Thu, 21 Jun 2012 21:59:55 +0000

In reply to Should We Raise Taxes On The Middle Class?

Off-on-a-tangent-thought: Do you think, as New York City residents, that we could cut our taxes in half if we get the City to secede from the state? Let me know, because I could sure use the extra money.

I think your idea here is

Michael Maiello — Thu, 21 Jun 2012 21:55:34 +0000

In reply to Anyone who works for any part

I think your idea here is spot on.

Now you're talking

jollyroger — Thu, 21 Jun 2012 21:45:35 +0000

In reply to Anyone who works for any part

Now you're talking

First, a reminder that destor

artappraiser — Thu, 21 Jun 2012 21:41:24 +0000

In reply to leaving aside for the moment

First, a reminder that destor is talking about increasing the take from the above $200K per year crowd and not the $60K per hour hedge fund manager, so this here is a different conversation. (And I believe it is the case that you could get a lot more bucks for Congress to spend targeting the six-figure crowd, much more than if you started doing an Ike on the billionaires.)

Second, the Ike recipe nonetheless sounds to me like a great growth stimulator for the Tea Party. And I sense that Krugman is not arguing that it would be politically wise, only factuals. It was tolerated by the American public during the Ike years because we had a post-war boom going on, the only country left standing, lots of money to be made (not to mention lots of suburban housing to be built) regardless of the tax rates. But I don't see a USA founded the way it was going for European level federal tax rates for long. Too many prefer where the major power is with the local tax man, where they can pick and chose their tax rates and the services that come with it by moving to/from localities.

Anyone who works for any part

EmmaZahn — Thu, 21 Jun 2012 21:32:43 +0000

In reply to Should We Raise Taxes On The Middle Class?

Anyone who works for any part of their living is not rich. Oh, they may technically work but they do it for other reasons. Avocations really but the very high incomes 'earned' add to their overall wealth. It is the excessive accumulations of wealth and the unearned incomes from it that should be taxed at higher rates. That is something progressive tax proponents never really make clear. Why? Because unfortunately we swallowed the kool-aid the wealthy served. Without that wealth they cannot create jobs so we, too, if we work hard and play by their rules can one day be wealthy, too. But they will always be wealthier. Oh, a few here and there may squander it, but overall they will always aim to stay at the head of the pack because at that level, their wealth defines their status. It is how they keep score.

Basic point, you will have a better chance of success if you will just make a clear case for marginally higher taxes on unearned incomes and wealth accumulations. And you do not have to start from scratach, wealth taxes are not exactly unheard of in the developed world.

Of course, you may not find this appealing if you are a trust funder yourself.

Speaking as a tax planning

jollyroger — Thu, 21 Jun 2012 21:31:50 +0000

In reply to Why do you feel there is a

Speaking as a tax planning genius (I have the audit to prove it) in recovery, the preference for capital gains and leveraged dwelling costs are two profoundly deforming aspects of the code. Both operate to turn bad investment policy into good tax planning strategy.

leaving aside for the moment

jollyroger — Thu, 21 Jun 2012 21:22:12 +0000

In reply to Why do you feel there is a

leaving aside for the moment the adverse political impact that you apprehend, and bearing in mind that I have been influenced by the memory (no doubt the result of a carelessly scripted neuralizer session) of buttons extolling the likability of Ike, on simple utility grounds, Krugman says 70%