Interesting Article About Obama's Economic Ideology

[Mr. Peabody]

For those of you interested in Obama's economic underpinnings, here is a great article from the New York Times. I have included excerpts and a link to the much longer article.

The article seems to take some of the wind out of the argument that Obama is merely proposing a typical left-wing economic agenda. An interesting read.


Entire Article:http://www.nytimes.com/2008/08/24/magazine/24Obamanomics-t.html?partner=rssnyt&emc=rss&pagewanted=print

Starting in the early 1990s, Obama spent 12 years at the University of Chicago, mostly as a senior lecturer on constitutional law. It was a part-time job that helped him make money while he began to build his political career. But it also happened to place him inside what is arguably the intellectual center of modern American economic conservatism, the home of Milton Friedman and the laissez-faire philosophy known as the Chicago School of economics. By all accounts, Obama didn’t spend much time with Friedman’s disciples at the law school. Instead, he became friendly with another crowd: liberals who had come to think that Friedman was right about a lot, just not everything.

The Chicago School believes that markets — that is, millions of individuals making separate decisions — almost always function better than economies that are managed by governments. In a market system, prices adjust whenever there is a shortage or a glut, and the problem soon resolves itself. Just as important, companies constantly compete with each other, which helps bring down prices, improves the quality of goods and ultimately lifts living standards.

In its more extreme forms, the Chicago School’s ideas have some obvious flaws. History has shown that free markets aren’t so good at, say, preventing pollution or the issuance of fantastically unrealistic mortgages. But over the last few decades, as Europe’s regulated economies have struggled and Asia’s move toward capitalism has spurred its fabulous boom, many liberals have also come to appreciate the virtues of markets.

One of these liberals is Cass Sunstein, a prolific law professor who sometimes ate with Obama in the open, sunlit cafeteria off the lobby of the main building at Chicago’s law school. Over sandwiches in that cafeteria this spring, Sunstein told me that he didn’t think that Obama arrived at the law school as an old-style liberal or departed as anything like a Friedmanite. Yet Sunstein and other former Chicago colleagues I spoke with said they believed that Chicago had helped give Obama an intellectual framework for his instincts, at the least, and probably made him come to appreciate markets more.

Obama, when I asked him, agreed that his years surrounded by Chicago School thinking affected him. He tends to assign his motives to more intimate narratives, though, and he said that his grandmother, a high-school graduate who rose to become the vice president of a bank and was the family’s main breadwinner, had the biggest impact. “She had to think very practically about, How do you make money?” he told me. “How does the system work? That led me to have an orientation to ask hardheaded questions. During my formative years, there was still ideological competition between a social-democratic or even socialist agenda and a free-market, Milton Friedman agenda. I think it was natural for me to ask questions of both sides and maybe try to synthesize approaches.”

There is plenty of evidence that this synthesis isn’t merely a part of a candidate’s inevitable tack to the center for a general election. In Obama’s memoir, “Dreams From My Father,” he sympathetically recounts a conversation he had with a Kenyan farmer, in which the man complains both about rich people who won’t pay their fair share of taxes and about burdensome government regulations on coffee growing. In Obama’s second book, “The Audacity of Hope,” he goes further: “Reagan’s central insight — that the liberal welfare state had grown complacent and overly bureaucratic, with Democratic policy makers more obsessed with slicing the economic pie than with growing that pie — contained a good deal of truth.”

The partial embrace of Reaganomics is a typical bit of Obama’s postpartisan veneer. In a single artful sentence, he dismissed the old liberals, aligned himself with the Bill Clinton centrists and did so by reaching back to a conservative icon who remains widely popular. But the words have significance at face value too. Compared with many other Democrats, Obama simply is more comfortable with the apparent successes of laissez-faire economics.

Sunstein, now on the faculty at Harvard, has a name for this approach: “I like to think of him as a ‘University of Chicago’ Democrat.”

It’s a useful label. Today’s Democratic consensus has moved the party to the left, and on issues like inequality and climate change, Obama appears willing to be even more aggressive than many fellow Democrats. From this standpoint, he’s a true liberal. Yet he also says he believes that there are significant parts of Reaganism worth preserving. So his policies often involve setting up a government program to address a market failure but then trying to harness the power of the market within that program. This, at times, makes him look like a conservative Democrat.

....

As anyone who has spent time with Obama knows, he likes experts, and his choice of advisers stems in part from his interest in empirical research. (James Heckman, a Nobel laureate who critiqued the campaign’s education plan at Goolsbee’s request, said, “I’ve never worked with a campaign that was more interested in what the research shows.”) By surrounding himself with economists, however, Obama was also making a decision with ideological consequences. Far more than many other policy advisers, economists believe in the power of markets. What tends to distinguish Democratic economists is that they set out to uncover imperfections of the market and then come up with incremental, market-based solutions to these imperfections. This helps explain the Obama campaign’s interest in behavioral economics, a relatively new field that has pointed out many ways in which people make irrational, short-term decisions. To deal with one example of such myopia, Obama would require companies to automatically set aside a portion of their workers’ salary in a 401(k) plan. Any worker could override the decision — and save nothing at all or save even more — but the default would be to save.

A more controversial version of Obama’s market friendliness came from his health-care proposal, which, unlike Hillary Clinton’s, would not mandate that people have health insurance. Like other Democrats, he was pushing for a big government program to deal with what he saw as market failures in health care and to bring down the price of insurance. Once the program was in place, though, he trusted a market of individuals to make its own decisions; once the government had subsidized health insurance, he thought the vast majority of the uninsured would sign up.
. . . .
Dating back to Reagan, Republicans have packaged tax cuts on high earners with more modest middle-class tax cuts and then maneuvered the Democrats into an unwinnable choice: are you for tax cuts or against them? Obama, however, argues that this is the moment when the politics of taxes can be changed.

To do this, he is proposing tax cuts for most families that are significantly larger than those McCain is offering, along with major tax increases for families making more than $250,000 a year. “That’s essentially a major part of our economic plan,” Obama said. “But it’s also a political message.” Economically, he is trying to use the tax code to spread the bounty from the market-based American economy to a far wider group of families. Politically, he is trying to drive a wedge through the great Reagan tax gambit.

The Tax Policy Center, a research group run by the Brookings Institution and the Urban Institute, has done the most detailed analysis of the Obama and McCain tax plans, and it has published a series of fascinating tables. For the bottom 80 percent of the population — those households making $118,000 or less — McCain’s various tax cuts would mean a net savings of about $200 a year on average. Obama’s proposals would bring $900 a year in savings. So for most people, Obama is the tax cutter in this campaign.

If there is a theme to the Obama tax philosophy, it’s that the tax code is not quite as progressive as you think it is. Most of the public discussion about taxes tends to focus on the income tax, which taxes the affluent at a considerably higher rate than anyone else. But the income tax doesn’t take the biggest bite out of most families’ annual tax bill. The payroll tax does. And even as the federal government has been reducing income taxes over the last few decades, it has allowed the payroll tax, which finances Social Security and Medicare, to creep up. That’s a big reason that overall tax rates for the bottom 80 percent of earners have not fallen as much as rates for the affluent.

Obama’s second-most-expensive proposal, after his health-care plan, is the equivalent of a $500 cut in the payroll tax for most workers. (It is actually a credit that is applied toward income taxes based on payroll taxes paid.) In a speech this month in Florida, he proposed that the cut take effect immediately, in the form of a rebate, to stimulate the economy. For most workers, it would be the first significant cut in the payroll tax in decades, if not ever.

The other way that he would cut taxes involves a series of technicalities. But since the campaign began, Goolsbee has been arguing that those technicalities offer one of the best glimpses of how Obama thinks about the tax code. Right now, several big tax breaks that sound broad-based — like those for child care and mortgage interest — don’t always benefit middle-income and lower-income families. Another example is the Hope Credit for college tuition, a creation of the Clinton administration. Obama wants to more than double the credit, to $4,000. More to the point, he would make it “fully refundable.” As a result, a family with an income-tax bill of $3,000 wouldn’t merely have that bill eliminated; it would also receive a $1,000 check. Increasingly, the income-tax system becomes a way to transfer money to poor families.

All told, Obama would not only cut taxes for most people more than McCain would. He would cut them more than Bill Clinton did and more than Hillary Clinton proposed doing. These tax cuts are really the essence of his market-oriented redistributionist philosophy (though he made it clear that he doesn’t like the word “redistributionist”). They are an attempt to address the middle-class squeeze by giving people a chunk of money to spend as they see fit.

He would then pay for the cuts, at least in part, by raising taxes on the affluent to a point where they would eventually be slightly higher than they were under Clinton. For these upper-income families, the Tax Policy Center’s comparisons with McCain are even starker. McCain, by continuing the basic thrust of Bush’s tax policies and adding a few new wrinkles, would cut taxes for the top 0.1 percent of earners — those making an average of $9.1 million — by another $190,000 a year, on top of the Bush reductions. Obama would raise taxes on this top 0.1 percent by an average of $800,000 a year.

It’s hard not to look at that figure and be a little stunned. It would represent a huge tax increase on the wealthy families. But it’s also worth putting the number in some context. The bulk of Obama’s tax increases on the wealthy — about $500,000 of that $800,000 — would simply take away Bush’s tax cuts. The remaining $300,000 wouldn’t nearly reverse their pretax income gains in recent years. Since the mid-1990s, their inflation-adjusted pretax income has roughly doubled.

To put it another way, the wealthy have done so well over the past few decades, with their incomes soaring and tax rates plummeting, that Obama’s plan would not come close to erasing their gains. The same would be true of households making a few hundred thousand dollars a year (who have gotten smaller raises than the very rich but would also face smaller tax increases). As ambitious as Obama’s proposals might be, they would still leave the gap between the rich and everyone else far wider than it was 15 or 30 years ago. It just wouldn’t be quite as wide as it is now.

[FromWayDowntown]

No, no, no! Obama is a socialist, nay, a communist! Don't you know anything!?!?!?

[Mr. Peabody]

No, no, no! Obama is a socialist, nay, a communist! Don't you know anything!?!?!?

I know what you mean. I was torn. As I was reading the article I kept thinking "This isn't what Sean Hannity tells me during my drive home during his 'Stop Obama Express.' And how can I doubt the veracity of a program with such a moniker." But it seemed like a good article and I am sure that the newspaper version has a picture or two. I tend to trust things that have pictures. You know like picture books, books with pictures, and articles about Barack Obama with pictures.

[101A]

Take $800,000 from one person and spread it around in $900 parcels to nearly 900 other citizens.

Very enlightened (and, btw, convenient in a Democracy). Those 900 beneficiaries then thank Obama; and NOT the person who actually earned the money they are receiving.

How low DO taxes for most Americans need to be before it is considered "fair"?

After Obama gets elected, sticks it to those evil rich people, and they pay an even bigger share of everybody's burden, THEN what will Dems run on when there are still people with bigger cars, boats and houses than most?

You guessed it, EVEN higher taxes for those bastards. All the while, they take those people's money, and distribute it to the population for favors and votes (and wealth, let's not forget how economically fortunate our legilators become AFTER they get elected).

Cutting payroll taxes on most Americans while SS and Medicare steamroll to bankruptcy - and counting on a handfull of the ultra rich to foot the bill is truly a brilliant idea; it's not like those people have the means and intelligence to figure out a way to shield themselves from that or anything.

[Anti.Hero]

He wants oil companies to give everyone $1k back! And he wants to raise capital gains tax rates!

That's all I need to know to predict what direction he will take the economy. I'll leave the NYT to ease my worries for someone else.


This hate on the wealthy, which in reality is an attack on the middle-class, will eventually backfire on the dems. There will come a point where the actual working get fed up enough that they will start to hate the poor. Just gotta wait till the pendulum swings back that way.

[clambake]

This hate on the wealthy, which in reality is an attack on the middle-class,
is it middle-class or wealthy? what number would you need to be considered middle-class? we already know what number describes the wealthy:lol

whats wrong with raising taxes on capital gains? i don't mind pitching in.

[Anti.Hero]

whats wrong with raising taxes on capital gains? i don't mind pitching in.

If you have to ask, you have already lost the argument. Sorryz


The wealthy don't give a shit about the tax talk. They are smart enough to find the loopholes and get above it (remember, rich guvment guy will always leave those little loopholes in for rich friend down the street). When they look at a 15% increase in capital gains tax, those entrepreneurial investments aren't nearly as enticing...among other things. Not when they can shift their money into less riskier stuff with just as much of a return. That's really going to boost the economy.

And then there's the part of not even increasing tax revenue a lot of the time by increasing capital gains tax. Ask yourself! What reason does my government have on raising capital gains tax if it will not raise tax revenue. Connect the dots!


Capital gains, investments are an amazing tool for a newcomer to quickly build wealth through hard work, intelligence, and luck. Just another example of the libs wanting to keep common man down by telling them they are attacking rich whitey. I believe this 100%.

[clambake]

If you have to ask, you have already lost the argument. Sorryz
you misinterpreted my statement. i don't mind doing my part to help this for shit economy.



The wealthy don't give a shit about the tax talk. They are smart enough to find the loopholes and get above it (remember, rich guvment guy will always leave those little loopholes in for rich friend down the street). When they look at a 15% increase in capital gains tax, those entrepreneurial investments aren't nearly as enticing...among other things. Not when they can shift their money into less riskier stuff with just as much of a return. That's really going to boost the economy.
the loops are beginning to close already. if we reign in the corp. greed we might start getting our dividends and distributions again.



Capital gains, investments are an amazing tool for a newcomer to quickly build wealth through hard work, intelligence, and luck. Just another example of the libs wanting to keep common man down by telling them they are attacking rich whitey. I believe this 100%.

you can still do this without screaming fire.

[101A]

you misinterpreted my statement. i don't mind doing my part to help this for shit economy.

Tax increases DO NOT stimulate an economy, that is why the recent, bipartisan, stimulus package called for the govt. to send US checks, not the other way around.

[RandomGuy]

If you have to ask, you have already lost the argument. Sorryz


The wealthy don't give a shit about the tax talk. They are smart enough to find the loopholes and get above it (remember, rich guvment guy will always leave those little loopholes in for rich friend down the street). When they look at a 15% increase in capital gains tax, those entrepreneurial investments aren't nearly as enticing...among other things. Not when they can shift their money into less riskier stuff with just as much of a return. That's really going to boost the economy.

And then there's the part of not even increasing tax revenue a lot of the time by increasing capital gains tax. Ask yourself! What reason does my government have on raising capital gains tax if it will not raise tax revenue. Connect the dots!


Capital gains, investments are an amazing tool for a newcomer to quickly build wealth through hard work, intelligence, and luck. Just another example of the libs wanting to keep common man down by telling them they are attacking rich whitey. I believe this 100%.

One can earn income either through providing capital to the economy or providing labor to the economy.

If you tax capital at a rate lower than you tax labor then you are essentially telling people who work for a living but don't have enough money to save much that their labor income should be taxed at a rate higher than the capital gains income for billionaires like Warren Buffet.

“The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”--W.B. speaking to a group of large investors in 2007

I respect Mr. Buffet's common sense approach to such things immensely.

[RandomGuy]

Tax increases DO NOT stimulate an economy, that is why the recent, bipartisan, stimulus package called for the govt. to send US checks, not the other way around.

Is government spending a component of GDP?

[101A]

One can earn income either through providing capital to the economy or providing labor to the economy.

If you tax capital at a rate lower than you tax labor then you are essentially telling people who work for a living but don't have enough money to save much that their labor income should be taxed at a rate higher than the capital gains income for billionaires like Warren Buffet.

“The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”--W.B. speaking to a group of large investors in 2007

I respect Mr. Buffet's common sense approach to such things immensely.

I don't consider giving to the govt. "Humanitarian", or noble in ANY way.

I think this is a major difference in the basic beliefs of liberals and conservatives.

EVERYTHING Buffet says should be taken with a grain of salt in this election. HE has a LARGE interest in the inheritance tax going back up.

[RandomGuy]

Take $800,000 from one person and spread it around in $900 parcels to nearly 900 other citizens.

Very enlightened (and, btw, convenient in a Democracy). Those 900 beneficiaries then thank Obama; and NOT the person who actually earned the money they are receiving.

How low DO taxes for most Americans need to be before it is considered "fair"?

After Obama gets elected, sticks it to those evil rich people, and they pay an even bigger share of everybody's burden, THEN what will Dems run on when there are still people with bigger cars, boats and houses than most?

You guessed it, EVEN higher taxes for those bastards. All the while, they take those people's money, and distribute it to the population for favors and votes (and wealth, let's not forget how economically fortunate our legilators become AFTER they get elected).

Cutting payroll taxes on most Americans while SS and Medicare steamroll to bankruptcy - and counting on a handfull of the ultra rich to foot the bill is truly a brilliant idea; it's not like those people have the means and intelligence to figure out a way to shield themselves from that or anything.


To put it another way, the wealthy have done so well over the past few decades, with their incomes soaring and tax rates plummeting, that Obama’s plan would not come close to erasing their gains.

So basically, the people who are going to be taxed most are the people who (gasp) have benefitted most from our economy, and they will STILL be better off than they were a decade ago.

Can you say that about the middle class?

[RandomGuy]

I don't consider giving to the govt. "Humanitarian", or noble in ANY way.

I think this is a major difference in the basic beliefs of liberals and conservatives.

EVERYTHING Buffet says should be taken with a grain of salt in this election. HE has a LARGE interest in the inheritance tax going back up.

No, he doesn't. Remember that he gave away the bulk of his fortune to the Gates Foundation.

[101A]

Also, Buffet is obviously referring to payroll taxes (including the employer match), to come to his conclusion, right?

Whose fucking fault in Medicare and Social Security? Certainly not conservatives!

The fact that those are bloated programs, out of control, requiring VAST sums of money to fund are simply "I told you so's" at this point; now the model in which those funds are collected is being brought into question; it is no longer a plan, paid for by a person during their working lives for retirement; it is rapidly now devolving into a standard govt. program, and is now going to be subject to the same "progressive" scheme the rest of our country is being funded under. Why don't we go ahead and start means testing the people who are going to be funding it right out now, as well?

[RandomGuy]

I don't consider giving to the govt. "Humanitarian", or noble in ANY way.

I think this is a major difference in the basic beliefs of liberals and conservatives.

EVERYTHING Buffet says should be taken with a grain of salt in this election. HE has a LARGE interest in the inheritance tax going back up.

Then move to Somalia. They don't have a government there to pay money to. Go ahead. Let me know how that works out.

Government is where we organize to do things that we can't individually.

Do we or do we not have collective interests as a society?

[Mr. Peabody]

I
The wealthy don't give a shit about the tax talk. They are smart enough to find the loopholes and get above it (remember, rich guvment guy will always leave those little loopholes in for rich friend down the street). When they look at a 15% increase in capital gains tax, those entrepreneurial investments aren't nearly as enticing...among other things. Not when they can shift their money into less riskier stuff with just as much of a return. That's really going to boost the economy.


Maybe you are misinformed about his plan. His plan is a 5% increase in capital gains tax. Basically, it reverts back to what it was pre-2003.


Sen. Barack Obama's campaign on Thursday spelled out the details of the Democratic presidential candidate’s tax plan on his website and in an op-ed piece in the Wall Street Journal.

I just wanted to note the basic proposals for capital gains and dividend tax rates here:

--- Families with incomes below $250,000 would pay current capital gains rates (a maximum tax of 15% on gains on assets held more than one year). Those earning more than $250,000 would face an increase -- a top rate of 20%.

--- The top dividend tax rate would remain the current 15% for those earning less than $250,000, but would rise to 20% for those earning above that threshold.

--- For single people, the tax increases above would apply to those earning more than $200,000.

[101A]

No, he doesn't. Remember that he gave away the bulk of his fortune to the Gates Foundation.

He is an insurance guy, first and foremost; a life insurance guy.

You know why most LARGE life insurance policies are sold?

To pay inheritance taxes.

Buffet didn't get the billions he has by not looking out for number 1, and his own personal interest.

[101A]

Then move to Somalia. They don't have a government there to pay money to. Go ahead. Let me know how that works out.

Government is where we organize to do things that we can't individually.

Do we or do we not have collective interests as a society?

It's a necessary evil; it is not humanitarian, as Buffet, and you in proxy, suggest.

I thought "love it or leave it" was only for conservatives, btw.

[RandomGuy]

Also, Buffet is obviously referring to payroll taxes (including the employer match), to come to his conclusion, right?

Whose fucking fault in Medicare and Social Security? Certainly not conservatives!

The fact that those are bloated programs, out of control, requiring VAST sums of money to fund are simply "I told you so's" at this point; now the model in which those funds are collected is being brought into question; it is no longer a plan, paid for by a person during their working lives for retirement; it is rapidly now devolving into a standard govt. program, and is now going to be subject to the same "progressive" scheme the rest of our country is being funded under. Why don't we go ahead and start means testing the people who are going to be funding it right out now, as well?

I will not make any apologies for Mecidare and Social Security. Both mitigate some of the worst poverty in the most vulnerable parts of society.

One only has to look into our own past and the present of countries that have no such programs to see the human costs of doing nothing. The misery of the disabled in places like India, or our own early 19th century where there was no evil bloated government wealth ditribution shocks the conscience.

I suppose it would also be "conservative" to have kept allowing children to mine coal, or work in unregulated factories (silly OSHA...)...?

http://upload.wikimedia.org/wikipedia/commons/thumb/9/98/Abolish_child_slavery.jpg/800px-Abolish_child_slavery.jpg

[FromWayDowntown]

Maybe you are misinformed about his plan. His plan is a 5% increase in capital gains tax. Basically, it reverts back to what it was pre-2003.

Obviously, you have no idea what a crushing blow even a 5% increase in a tax mechanism applicable only to a fraction of taxpayers can make to a crippled economy!

What we need to stimulate this economy is bigger deficits and more wars!

[Mr. Peabody]

I will not make any apologies for Mecidare and Social Security. Both mitigate some of the worst poverty in the most vulnerable parts of society.

One only has to look into our own past and the present of countries that have no such programs to see the human costs of doing nothing. The misery of the disabled in places like India, or our own early 19th century where there was no evil bloated government wealth ditribution shocks the conscience.

I suppose it would also be "conservative" to have kept allowing children to mine coal, or work in unregulated factories (silly OSHA...)...?

[

We all know that OSHA is just another liberal tool to keep corporations from maximizing profit. If workers want safety, tell them to move to France.

[RandomGuy]

It's a necessary evil; it is not humanitarian, as Buffet, and you in proxy, suggest.

I thought "love it or leave it" was only for conservatives, btw.

Heh, I revel in using it the other way when people start complaining about taxes and "big government".

If one is really that opposed to either, there are plenty of places in the world where both are lacking. For some reason they don't tend to be nice places to live. This indicates to me that government is more necessary than a lot of hyper-individualists seem to think.

[101A]

Heh, I revel in using it the other way when people start complaining about taxes and "big government".

If one is really that opposed to either, there are plenty of places in the world where both are lacking. For some reason they don't tend to be nice places to live. This indicates to me that government is more necessary than a lot of hyper-individualists seem to think.


O.K.; now, since I am pointing out that Social Security and Medicare have become the pigs they are, and that some people of my political leanings said as much and were shouted down years ago, I'm a "radical", wanting everybody starving in the street, sweat shops, etc.....

Typical.

[101A]

Seems like a good thread to ask:

What is a fair percentage for a top marginal tax rate?

[RandomGuy]

O.K.; now, since I am pointing out that Social Security and Medicare have become the pigs they are, and that some people of my political leanings said as much and were shouted down years ago, I'm a "radical", wanting everybody starving in the street, sweat shops, etc.....

Typical.

By all means then, what do we do about SS and Medicare, if they are so bloated?

What difference does it make if the provision for the needy are done through this or some other means?

Pay out $100 in taxes or $100 donation to charity, it is the same out of my pocket.

Quite frankly the US government, despite what you seem to think is a rather efficient way of getting such money to needy people.

Any private non-profit would still have the same overhead rate, if not more.

As mean as the IRS is, it is still cheaper than a "begging division" of telemarketers trying to get you to donate to a charity.

Private charity is a good thing, but is not the panacea that some seem to think it is. There are more than a few studies showing rather shockingly how little money sometimes actually gets to the people it is supposed to help, and how much is taken up in private burocracy.

One thing or another. I can make a fairly decent case that the government offers some pretty good bang for the buck in terms of alleviating some of the worst symptoms of poverty.

[RandomGuy]

Seems like a good thread to ask:

What is a fair percentage for a top marginal tax rate?

Fair? That is a decent question.

I would guess about 30-40%.

[101A]

By all means then, what do we do about SS and Medicare, if they are so bloated?

What difference does it make if the provision for the needy are done through this or some other means?

Pay out $100 in taxes or $100 donation to charity, it is the same out of my pocket.

Quite frankly the US government, despite what you seem to think is a rather efficient way of getting such money to needy people.

Any private non-profit would still have the same overhead rate, if not more.

As mean as the IRS is, it is still cheaper than a "begging division" of telemarketers trying to get you to donate to a charity.

Private charity is a good thing, but is not the panacea that some seem to think it is. There are more than a few studies showing rather shockingly how little money sometimes actually gets to the people it is supposed to help, and how much is taken up in private burocracy.

One thing or another. I can make a fairly decent case that the government offers some pretty good bang for the buck in terms of alleviating some of the worst symptoms of poverty.

The U.S. govt. is efficient?

Want to compare the number of people on Medicare/Medicaid and how much those programs cost vs. what it costs the private sector?

Want to compare what I've put into my retirement account, and what I'm gonna get out of it vs. what I've put into SS and what I'm gonna get out of that?

Want to compare what I pay for a hammer or toilet seat vs. the government?

I never give to charities that call me; I freely give to several others (at least a tithe annually) to others that never call. I check them out on line to make sure, to the best of my ability, that my money is not being wasted:

Charity Navigator (http://www.charitynavigator.org/?gclid=CIjz48_-oZUCFQyxGgodz3hCkg)

And again, the point is moot; I have not argued that the country should be without a safety net; that is a strawman you created. My argument is that, as a society, we ALL should bear that burden. We are not - and it's trending even further away from any type of equilibrium - ultimately to a point where people will receive SS benefits, and never pay a dime into SS.

[101A]

Fair? That is a decent question.

I would guess about 30-40%.

Current top rate = 35%.

Obama wants to repeal the Bush tax cuts (well, only on the top bracket; the cuts were good for every body else).

That makes the top bracket 39.6% - back to 2000 levels.

Then, Obama wants to make SS and Medicare payable for all over 250K - not payable between 100 and 250 - doesn't want to alienate those upper middle class voters, after all.

That would be 14.6 on top of the top rate, bringing the federal total to 54.2%. Now, if you live any but two states in the Union, you ALSO pay a state income tax, and many of those are also, "progressive": the highest being Vermont at 9.5% (California, our most populace state is NEARLY there - 9.3)

SO, under Obama's economic policy, if it is ratified, the highest personal income tax rate for people in this free society of ours will be:

63.7%!!!!!

Under McCain, wanting to keep the rich rich, and stick it to everybody else, that number will be: 44.5% - actually much closer to what you consider "fair", although by your own number, still a little onerous.

You should consider changing allegiances.

[RandomGuy]

The U.S. govt. is efficient?

Want to compare the number of people on Medicare/Medicaid and how much those programs cost vs. what it costs the private sector?

I would love to. Step up and show me the data that proves that medicare/medicaid is "inefficient" compared to similar private charities on an overhead percentage basis.

:corn:

This oughta be good.

[RandomGuy]

I have yet to see a single conservative be able to back up this most basic assertion.

You base your whole ideology on "government is inefficient", yet I have never seen the faintest attempt at providing any data or figures that might support this assertion.

I invariably get the inevitable anecdote or other about such and such, but not one single study, or verifiable figure.

Not.

One.

It is your assertion. The burden of proof is on you.

[RandomGuy]

Current top rate = 35%.

Obama wants to repeal the Bush tax cuts (well, only on the top bracket; the cuts were good for every body else).

That makes the top bracket 39.6% - back to 2000 levels.

Then, Obama wants to make SS and Medicare payable for all over 250K - not payable between 100 and 250 - doesn't want to alienate those upper middle class voters, after all.

That would be 14.6 on top of the top rate, bringing the federal total to 54.2%. Now, if you live any but two states in the Union, you ALSO pay a state income tax, and many of those are also, "progressive": the highest being Vermont at 9.5% (California, our most populace state is NEARLY there - 9.3)

SO, under Obama's economic policy, if it is ratified, the highest personal income tax rate for people in this free society of ours will be:

63.7%!!!!!

Under McCain, wanting to keep the rich rich, and stick it to everybody else, that number will be: 44.5% - actually much closer to what you consider "fair", although by your own number, still a little onerous.

You should consider changing allegiances.

How much federal tax credit does one get to take on a federal tax return for state income taxes paid?

[RandomGuy]

By the by, there are 10 states in the US that have no personal income tax, not two.

[RandomGuy]

How much federal tax credit does one get to take on a federal tax return for state income taxes paid?

I'll answer the question:

If you itemize your deductions, then you get to reduce your AGI on a dollar per dollar basis for each dollar you paid.

This, in essence reduces your federal taxes by the amount you paid in state income taxes multiplied by your marginal tax rate.

If say you paid $5,000 in state income taxes and have a marginal tax rate of 35% then you get to reduce your ultimate federal tax paid by $1750.

So in your calculations, you don't get to take a percentage for percentage addition of state and local income taxes.

So if the state income tax is 9% you have to run that times .65 or roughly 6%

Just to be accurate...

[RandomGuy]

Further, if you really get down to it, let's examine what the capital gains tax does.

Social security and medicare taxes are NOT levied on such income to my knowledge.

Assume 1/2 of your income is from capital gains, and the other half is from work income.

Let's go with your figure of 63.7% of your work income is taxed, and 15% of your capital gains income is taxed at that rate.

(63.7+15)/2= 39% marginal tax rate. Egads. That is well within the region that I consider fair.

Of course if you earn, say 9/10 of your economic/taxable income from capital gains, then let's see how that pans out.

(63.7*1/10) + (15*9/10)= 19.8

So a couple with 1,000,000 of earned work income and 9,000,000 in capital gain income would end up paying a smaller percentage of his overall income than a guy earning $100,000 of work income per year.

We provide a system of laws, protections, and a free-market in order to allow people to reach their potential.

Is it really unreasonable to ask people to support that system if they are successful?

Conservatives call taxes "punishing success".

I call not doing it stealing. If you benefit from something, you are morally and ethically bound to support that system in a reasonable fashion. You benefited from the ability to make and enforce contracts, educated labor, infrastructure of all kinds. Is it fair to not pay back into that system?

[2centsworth]

For those of you interested in Obama's economic underpinnings, here is a great article from the New York Times. I have included excerpts and a link to the much longer article.

The article seems to take some of the wind out of the argument that Obama is merely proposing a typical left-wing economic agenda. An interesting read.

I read the article, it essentially is an opinion piece that contradicts itself. First they try to make the argument that he's not a liberal, but a proponent of free-markets, and then support that argument by discussing two of his policies to redistribute wealth. What I find funny is how the article essentially states that liberals tend to be anti free-markets and try to paint Obama as somewhat the opposite. My question would be, my such a disconnect between what he "supposedly believes" and his proposals. They are obviously trying to put lipstick on a pig and the libs on this board are trying to reach for anything to try to prove their candidate isn't a marxist. The best I could maybe say for Obama is that the people pulling his strings are marxist.

[101A]

Further, if you really get down to it, let's examine what the capital gains tax does.

Social security and medicare taxes are NOT levied on such income to my knowledge.

Assume 1/2 of your income is from capital gains, and the other half is from work income.

Let's go with your figure of 63.7% of your work income is taxed, and 15% of your capital gains income is taxed at that rate.

(63.7+15)/2= 39% marginal tax rate. Egads. That is well within the region that I consider fair.

Of course if you earn, say 9/10 of your economic/taxable income from capital gains, then let's see how that pans out.

(63.7*1/10) + (15*9/10)= 19.8

So a couple with 1,000,000 of earned work income and 9,000,000 in capital gain income would end up paying a smaller percentage of his overall income than a guy earning $100,000 of work income per year.

We provide a system of laws, protections, and a free-market in order to allow people to reach their potential.

Is it really unreasonable to ask people to support that system if they are successful?

Conservatives call taxes "punishing success".

I call not doing it stealing. If you benefit from something, you are morally and ethically bound to support that system in a reasonable fashion. You benefited from the ability to make and enforce contracts, educated labor, infrastructure of all kinds. Is it fair to not pay back into that system?


Sure it's fair; and, fine, I'll use your math: 61% top marginal rate as opposed to 64 - but it's flawed; states don't let you deduct federal insurance; you get to deduct your state taxes from the fed. Therrefore, with the top rate being 9% - well you do the math, it's 63 instead of 64% BFD.

Great.

You said the rate should be 35 - 40. Change your mind?

Capital gains tax, you are correct, is much lower than income; and is not subject to payroll.

It certainly helps those who derive income from investments (my guess would be many of them are SERIOUS donors and friends of all politicians, or politicians themselves). You know who DOESN'T make "half their income" from capital gains? Doctors, Lawyers, Small business owners, mid level executives, etc... Now, eventually, people build nest eggs, portfolios, etc....but with a 55 - 60% chunk being taken out of their incomes, the capital to do that with is SERIOUSLY being curtailed. TOMORROW'S investors get hamstrung by ridiculous taxation today. Except for the people who have already made it, that is.

Do you not realize that by putting onerous taxation on income, but not on investments, you are supporting the status-quo, class stagnation, etc.?

40% was the tops three days ago, but now that you understand Obama wants over 55, your cool with that?

Just so we understand each other.....

[101A]

http://www.nytimes.com/2008/08/26/business/economy/26income.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1219695215-CIn073rMdJ8oZzUGAqHzsg


Average Income Rises Above ’00 Level

By DAVID CAY JOHNSTON (http://topics.nytimes.com/top/reference/timestopics/people/j/david_cay_johnston/index.html?inline=nyt-per)
Published: August 25, 2008

Americans enjoyed higher average income in 2006 for the first time since 2000, when the last economic expansion ended, the latest tax data show.

Adjusted gross income reported on tax returns in 2006 averaged $58,029. In 2006 dollars that was an increase of $739, or 1.2 percent, from the $57,289 average in 2000, analysis of Internal Revenue Service (http://topics.nytimes.com/top/reference/timestopics/organizations/i/internal_revenue_service/index.html?inline=nyt-org) data showed.
Average income fell sharply in 2001 and again in 2002, when it dropped to $51,870, off nearly 10 percent from 2000, tax data show. The average grew slightly in 2003.
Average income grew significantly in 2004, rising $2,291, and again in 2005, when the average increased by $2,210. Income growth continued in 2006, but at a much slower pace, increasing by $1,369 over the 2005 average once inflation is taken into account.
Salaries and wages, by far the largest source of income, nearly returned to the 2000 average in 2006. However, among the highest-paid workers, both total and average wages fell, an indication of how the Internet bubble had concentrated gains among a relatively few workers.
The average wage in 2006 was $46,996, down $101, or a fraction of 1 percent, from $47,097 in 2000. Average wages in this decade hit a low of $45,956 in 2003, the I.R.S. data show.
Among workers with salaries of less than $1 million, the average wage in 2006 was up $170 from 2000.
Salaries fell noticeably, however, among the tiny slice of taxpayers whose total income was $1 million or more, a threshold that the I.R.S. does not adjust for inflation.
The number of wage earners in this high-income group soared over six years, up 42.9 percent, to 285,759 of the 116.4 million taxpayers reporting wages in 2006. A taxpayer can be an individual or a married couple.
Despite this increase in the number of high-wage earners, their total wages declined by $2.4 billion, or almost 1 percent, to $313.3 billion.
The decline in total wages at the top was solely among the narrow segment of wage earners with total income of $5 million or more, the same group that was the big winner from dot-com era stock options, which are reported as wages on tax returns. The average wage of these 33,309 workers fell almost 37 percent, to $3.5 million in 2006 from $5.5 million in 2000, analysis of the tax data showed.



This CAN"T be! The richest are the ones who enjoyed the LEAST income increase. WHAT????

Oh hell, tax 'em at 60% + anyway!!!! THE BASTARDS!!!!

Come on, RG, where'd you go?

[Mr. Body]

101A is cute. The propensity for some poor sclubs to defend the downtrodden rich always makes me laugh. It's a delusional projection: they think they'll be rich some day. Like yipping Chihuahuas thinking they'll get to be big dogs if they bark loud enough.

[Aggie Hoopsfan]

I have yet to see a single conservative be able to back up this most basic assertion.

You base your whole ideology on "government is inefficient", yet I have never seen the faintest attempt at providing any data or figures that might support this assertion.

I invariably get the inevitable anecdote or other about such and such, but not one single study, or verifiable figure.

Not.

One.

It is your assertion. The burden of proof is on you.

So, you're saying our federal government is efficient? :lmao

You want proof of government inefficiency?

This country is going to go bankrupt due to social security, and yet our politicians a) continue to write IOU checks out of the SS fund and b) do nothing to address the looming insolvency.

Yep, model of efficiency right there :tu Keep spending, even if it will bankrupt us and turn us into a third world country!

[2centsworth]

101A is cute. The propensity for some poor sclubs to defend the downtrodden rich always makes me laugh. It's a delusional projection: they think they'll be rich some day. Like yipping Chihuahuas thinking they'll get to be big dogs if they bark loud enough.

this is an adult forum thank you.

[Mr. Body]

this is an adult forum thank you.

:lol

I said it in my adult voice.

Better than 'the world is mean to the poor widdle oligarchs!' loser above. Hey, the rich have been infiltrating the government for long enough to help start wars and bomb our economy to smithereens. Time to pay for it, you mincing nincompoops. I won't have anymore bridges collapsing.

[2centsworth]

:lol

I said it in my adult voice.

Better than 'the world is mean to the poor widdle oligarchs!' loser above. Hey, the rich have been infiltrating the government for long enough to help start wars and bomb our economy to smithereens. Time to pay for it, you mincing nincompoops. I won't have anymore bridges collapsing.

the evil united states, we make terrorize the world. The world without the United States is a freakin hell hole.

[T Park]

You base your whole ideology on "government is inefficient", yet I have never seen the faintest attempt at providing any data or figures that might support this assertion.



Public education and the continuing black hole that it is?

Social Security?


The government is an inefficient cesspool.

[2centsworth]

Public education and the continuing black hole that it is?

Social Security?


The government is an inefficient cesspool.

governments are more efficient, that's why communism works so well.

[balli]

I think it's worth noting too, that we're currently running a $500 billion dollar budget defecit, so don't act like all the revenue this taxation brings in is just going to be handed right back out into the slums of America.

The extremely wealthy have run amok in their earnings and uniformly supported Bush as he's been draining the national coffers at an astronomical rate for the past 8 years. So what, under Obama, these top earners pull down 7.2 million dollars per year as opposed to 8 million? Phhhhh, I could give a fuck less if Obama puts the burden of cleaning up Bush's national bankruptcy on them.

[T Park]

I think it's worth noting too, that we're currently running a $500 billion dollar budget defecit, so don't act like all the revenue this taxation brings in is just going to be handed right back out into the slums of America.

The extremely wealthy have run amok in their earnings and uniformly supported Bush as he's been draining the national coffers at an astronomical rate for the past 8 years. So what, under Obama, these top earners pull down 7.2 million dollars per year as opposed to 8 million? Phhhhh, I could give a fuck less if Obama puts the burden of cleaning up Bush's national bankruptcy on them.


:lol

Typical communistic thinking.

Screw them, they have money, therefore they are evil!

[101A]

101A is cute. The propensity for some poor sclubs to defend the downtrodden rich always makes me laugh. It's a delusional projection: they think they'll be rich some day. Like yipping Chihuahuas thinking they'll get to be big dogs if they bark loud enough.


No.

I THOUGHT I'd be rich one day 15 years ago.

By most standards, now, I do pretty well.

I sign 32 pay checks on the 15th and the last day of the month with my own name.

The SINGLE biggest check I sign each pay cycle is to Uncle Sam.

[101A]

I think it's worth noting too, that we're currently running a $500 billion dollar budget defecit, so don't act like all the revenue this taxation brings in is just going to be handed right back out into the slums of America.

The extremely wealthy have run amok in their earnings and uniformly supported Bush as he's been draining the national coffers at an astronomical rate for the past 8 years. So what, under Obama, these top earners pull down 7.2 million dollars per year as opposed to 8 million? Phhhhh, I could give a fuck less if Obama puts the burden of cleaning up Bush's national bankruptcy on them.

O.K., RG won't play anymore.

What do YOU think is a good, top, tax bracket.

How much of ones own earnings ought one be allowed to keep?

[101A]

:lol

I won't have anymore bridges collapsing.

Hilarious.

A bridge collapses. People die.

The bridge was built by the govt. "maintained" by the govt......and yet; you CANNOT blame the govt!!! Govt = Good in your naive little immature, unable to assimilate knowledge brain, therefore, well, the bridge must have collapsed because of the rich!!!!

Priceless.

[Mr. Body]

Hilarious.

A bridge collapses. People die.

The bridge was built by the govt. "maintained" by the govt......and yet; you CANNOT blame the govt!!! Govt = Good in your naive little immature, unable to assimilate knowledge brain, therefore, well, the bridge must have collapsed because of the rich!!!!

Priceless.

I suggest you learn something, my friend. In Minnesota, due to GOP leadership, the funds were denied to make structural improvements that would have prevented the bridge collapse. In fact, at the time, the idea of giving out the money was ridiculed. Now, even leaving aside the very human sorrows of those who needlessly died, the outward payments the state has to make to the dead and for reconstruction is higher than what maintenance was.

Maintenance of infrastructure is a vital national policy. For security, for commerce, and because it's far more expensive to fix things when they're broken. But the GOP decides to belittle it, going for tax cuts for the top marginal tax brackets (leaving alone high payroll taxes for the little guys), and for discretionary wars we have no moral or security business waging -- that are enormously, vastly expensive, and are laying waste to the dollar.

Most of the rich are sound, wise people, but a good number have grappled the government to evil purpose, all the while destroying one of our national parties -- the Republicans used to be sane, and fiscal conservative philosophies are good ones, but now they are insane, crooked, and compromised to the gills. But Warren Buffett, among others, knows what you're too stupid to understand -- you have to pay for things. And a sound society allows some shifting of burdens. This is not 'communism', this is not 'socialism', although no doubt that's the next thing out of your mouth.

[101A]

I suggest you learn something, my friend. In Minnesota, due to GOP leadership, the funds were denied to make structural improvements that would have prevented the bridge collapse. In fact, at the time, the idea of giving out the money was ridiculed. Now, even leaving aside the very human sorrows of those who needlessly died, the outward payments the state has to make to the dead and for reconstruction is higher than what maintenance was.

Maintenance of infrastructure is a vital national policy. For security, for commerce, and because it's far more expensive to fix things when they're broken. But the GOP decides to belittle it, going for tax cuts for the top marginal tax brackets (leaving alone high payroll taxes for the little guys), and for discretionary wars we have no moral or security business waging -- that are enormously, vastly expensive, and are laying waste to the dollar.

Most of the rich are sound, wise people, but a good number have grappled the government to evil purpose, all the while destroying one of our national parties -- the Republicans used to be sane, and fiscal conservative philosophies are good ones, but now they are insane, crooked, and compromised to the gills. But Warren Buffett, among others, knows what you're too stupid to understand -- you have to pay for things. And a sound society allows some shifting of burdens. This is not 'communism', this is not 'socialism', although no doubt that's the next thing out of your mouth.

I know this:

The Govt. was in charge of the bridge in question.

The govt. failed.

I guess I'm too stupid to understand that giving the govt. MORE responsibility and power will help cure this problem?

Also, where in the world have I stated that the govt. should not be funded?

I simply pointed out that Obama has decided that the wise, responsible thing to do is give a tax cut to 900 people for each single individual who receives a tax increase. I suggested that that is a very convenient position in a democracy. If it is SO important to fund all of this big government, why is Obama ONLY repealing the Bush tax cuts on the most wealthy? ALL people who pay income tax got a tax cut, why shouldn't everybody pay part of this very righteous burden?

[101A]

Also, isn't Warren Buffet EXACTLY the kind of ultra rich dude we ought to be looking out for? You think maybe he's working the govt. AND public opinion to his own ends?

[Wild Cobra]

I'll answer the question:

If you itemize your deductions, then you get to reduce your AGI on a dollar per dollar basis for each dollar you paid.

This, in essence reduces your federal taxes by the amount you paid in state income taxes multiplied by your marginal tax rate.

If say you paid $5,000 in state income taxes and have a marginal tax rate of 35% then you get to reduce your ultimate federal tax paid by $1750.

So in your calculations, you don't get to take a percentage for percentage addition of state and local income taxes.

So if the state income tax is 9% you have to run that times .65 or roughly 6%

Just to be accurate...

This is true, but you leave out the fact that filing that way replaces the standard deduction. I filed that way a few years when it was advantageous for me to. I still would save money filing that way, but I prefer the short form. I actually pay more in taxes than I need to. I don't deduct my charitable contributions either. I am more pissed at the way liberals want us to pay taxes rather than how much I pay. It's a matter of principle.

[PixelPusher]

I know this:

The Govt. was in charge of the bridge in question.

The govt. failed.

I guess I'm too stupid to understand that giving the govt. MORE responsibility and power will help cure this problem?


GOP comes into power. GOP cuts funding. GOP cuts have consequences. GOP blames "guvmit".

Yeah, that not at all cynical.

[Wild Cobra]

Further, if you really get down to it, let's examine what the capital gains tax does.

---snip---


Don't forget how capitol gains and dividends differ from income. When they come from stucks in a company that you are part owner of, you already paid a 35% federal rate on those profits. Now add that 15%, and you now are really paying a 44.75% of the gains on your stock holdings.

Capitol gains are also paid on property investments, and inflation isn't factored in on either stock gains or property value gains. I would advocate a zero capitol gains tax myself. If you sell a house for $400,000, twice what you bought it for 10 years earlier, and reinvested in a smaller house after the children move out that for $300,000, should you pay more than 15,000 in taxes on that trasaction? Aren't you possible behind after ten years of inflation?

[Aggie Hoopsfan]

I think it's worth noting too, that we're currently running a $500 billion dollar budget defecit, so don't act like all the revenue this taxation brings in is just going to be handed right back out into the slums of America.

Come on, Obama's proposing $500 (or is it a $1000 this time?) to every working family, coming out of the pocket of big oil. That wouldn't do shit for the deficit.



The extremely wealthy have run amok in their earnings and uniformly supported Bush as he's been draining the national coffers at an astronomical rate for the past 8 years. So what, under Obama, these top earners pull down 7.2 million dollars per year as opposed to 8 million? Phhhhh, I could give a fuck less if Obama puts the burden of cleaning up Bush's national bankruptcy on them.

Bush was a shitty president. That doesn't mean Obama should have free reign to do an even worse job.

[Wild Cobra]

I suggest you learn something, my friend. In Minnesota, due to GOP leadership, the funds were denied to make structural improvements that would have prevented the bridge collapse. In fact, at the time, the idea of giving out the money was ridiculed. Now, even leaving aside the very human sorrows of those who needlessly died, the outward payments the state has to make to the dead and for reconstruction is higher than what maintenance was.
Do you engage in propaganda purposely, or are you ignorant to the facts?

There are more democrats than republicans in the minnessota state delegation, and that's where such decisions are made. The govorner approves or vetos.

Where are the quotes that a republican govorner killed necessary infrastructure improvements?