will there be a war?

@Merry Andrew,

Quote:

It's unfortunate that the format of this forum doesn't allow us to put entire categories on "ignore."

Let me second your ingenious board reform movement!

@tsarstepan,

i like the political threads, it's like the three stooges

conservatives (moe), liberals (larry) and me (curly)

i especially enjoy spinning around on the floor, while the other two knuckleheads boink each other in the eyes

nyuk, nyuk, nyuk

1 Reply

@Phoenix32890,

Phoenix32890 wrote:

I sometime think about this business of taxing rich people at a higher rate than the rest of us. I wonder how many factories won't be built, how many jobs won't be created. Why the hell should people put their asses on the line to risk starting up a business, when if they succeed they have to give a big chunk of their money to the government?

The answer is basically none. No jobs will not be created because the rich get taxed at a higher rate. They will still put their asses on the line, because in order to get taxed at a higher rate, you have to make lots of money. A struggling new business owner doesn't pay more in tax. You get taxed on profit and everyone wants to make enough profit to get into that high tax bracket.

I'm in a decently high tax bracket and every year when I see what I pay in taxes, my mind spins, but the reality is that I don't even miss it. Paying those taxes in no way even affects my lifestyle or standard of living. If I didn't have to pay all those taxes, I guess my savings would rise faster, but I wouldn't go out and start buying a new car a year. Compare that to the low end of the taxpayer spectrum. Someone who is only paying $1000 annually in federal and state taxes plus a ton of sales tax really feels that bite. When you have almost no discretionary income, $100-$200 a month is a big deal.

1 Reply

@Finn dAbuzz,

Finn dAbuzz wrote:

Would I have liked to see Hoffman win yesterday? Of course. Not because I think he's the right guy for the job (I really have no idea as to whether or not he is, and I have already said he gives me the creeps), but because it would have deprived Democrats of their ability to spin what any rational person will recognize was a major victory for the GOP and a major setback for Obama.

The press loves to overanalyze off year elections, but the Virginia and NJ races are hardly major victories and setbacks, nor is the NY23 race anything but a local anomaly. Nate Silver at 538.com did a pre-election correlation of how gubernatorial races predict presidential races. There was no correlation at all. It goes back to all politics being local. Having a Republican governor in VA is completely expected and Corzine lost, not because he is a Democrat, but because he is a scumbag. Likewise, as you pointed out, Hoffman was not a great candidate either. He made fool out of himself when asked about local issues in a public debate where he was provided the questions ahead of time. The other guy may have been a Democrat, but he had a grasp of what people in NY23 were concerned about.

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@engineer,

Quote:

The answer is basically none. No jobs will not be created because the rich get taxed at a higher rate. They will still put their asses on the line, because in order to get taxed at a higher rate, you have to make lots of money. A struggling new business owner doesn't pay more in tax. You get taxed on profit and everyone wants to make enough profit to get into that high tax bracket.

IMO, what you say is true about the struggling new business owner. The very rich, on the other hand, have many other options to increase their wealth besides creating new businesses. If a person follows the stock, bond and commodities markets, one can readily see how the big investors can make a tidy profit even in a down market. And no new jobs are created.

1 Reply

@Phoenix32890,

Agreed, but the tax rate is not going to drive those decisions. You pay taxes on profits from securities just like you do on profits from a business. Owning a business also provides lots of ways for clever accountants to defer taxes so there are other benefits. I'm not saying that tax policy is never a consideration in the allocation of money, but the idea that rich people won't create jobs for those less wealthy because it will raise their tax bills isn't right. I will not reduce my income by $10,000 to save $3,000 in taxes. If it is cost effective to add an employee (because they will bring in more in revenue than they cost) I'm going to do it. I'll take the extra profit and pay some taxes. There seems to be a belief out there that if you tax the "rich", then adding employees will make their businesses more successful, but will cause their taxes to rise to the point where they will lose money. It's the "Joe the Plumber" syndrone and it clearly not true, but a lot of people buy the argument.

2 Replies

@engineer,

engineer wrote:

Agreed, but the tax rate is not going to drive those decisions. You pay taxes on profits from securities just like you do on profits from a business. Owning a business also provides lots of ways for clever accountants to defer taxes so there are other benefits. I'm not saying that tax policy is never a consideration in the allocation of money, but the idea that rich people won't create jobs for those less wealthy because it will raise their tax bills isn't right.

Taxes on capital gains are much less than taxes on income. The fact that the rich can hire clever accountants who can sniff out loopholes strengthens my argument that the rich are not about to pay any more tax than they can get away with.

I will modify my stand on this issue with this thought. Yes, there ARE jobs that will be created if the tax for the rich goes up the roof. There will be a greater need for accountants and tax lawyers to service those people!

1 Reply

@Phoenix32890,

I'm not talking about taxes through the roof, just taxes at Clinton or Reagan era rates. If the US starts taxing higher than Europe, we can expect money to flee the country, but we have a long way to go before we get there. Taxes on long term capital gains are less than income, but a business owner can make dramatically more on his initial investment than the average investor in securities. The risk/return curve is a lot steeper for the business owner, so it takes a certain type of person to go there compared to someone who is happy investing in securities. That person is not going to be swayed by a few percentage points in the tax rate since he's after the big payoff.

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@dyslexia,

I don't know about "war". But the movements driving the Republican party are as diverse, and their goals as conflicting, as the movements driving the Democratic party. The only thing that held them together in the last 20 years was the Republican party's winning streak. So I'm not surprised at all to see conflicts break out within the Republican party.

What does surprise me is the timing of these conflicts. Why didn't they break out on November 5 2008, after Democrats wiped the floor with them? Why are breaking out now, after the Republicans won two races for governor?

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@engineer,

I've seen instances in which you are wrong. Also economically significant, in my opinion. As a result of the attacks on 9/11, depreciation rules were modified, and most of the equipment types used by my employer was allowed to be expensed at a rate of 40% in the first year, in addition to normal depreciation. The company went on a buying spree with borrowed money, and remember that this was not a good time for either the stock market or insurance rates.

I am not convinced that this was good economic policy, but tax policy surely was responsible for capital expenditures, and growing companies hire more employees.

1 Reply

@dyslexia,

dyslexia wrote:

dyslexia wrote:

chicken or egg, yeah I get that.

sorry, I posted that to you finn, I forgot you have me on ignore.

I thought better of it and didn't add you to my ignore list.

I often find you amusing, and don't want to sacrifice the good for the bad.

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@djjd62,

djjd62 wrote:

i like the political threads, it's like the three stooges

conservatives (moe), liberals (larry) and me (curly)

i especially enjoy spinning around on the floor, while the other two knuckleheads boink each other in the eyes

nyuk, nyuk, nyuk

I guess there is that spectacle if you don't mind the inevitable ulcers induced from the emissions of hate based radiation so ominous in these threads. Embarrassed

0 Replies

@ebrown p,

ebrown p wrote:

Quote:
it would have deprived Democrats of their ability to spin what any rational person will recognize was a major victory for the GOP and a major setback for Obama.

You make me laugh. Virginia was an impressive win for the state GOP. NJ was a great campaign beating a pathetic campaign. All of these being races in a off-year election.

How do wins in statewide races consitute a "major setback for Obama" on a night where the only national impact was a pickup of one congressional seat for the Democrats?

Talk about spin.

1) The Corzine race was Obama's first serious attempt to use his presence and prestige to win an election for a Democrat. (Previously he displayed their anemic nature by stumping in Copenhagen for the city of Chicago).

His ability to advance his grand domestic agenda over the finish line will depend to a great extent on maintaining unity among the Democrats in congress - at least in terms of the casting of votes. If he could drag Corzine to victory, in the face of an ascendant regard for the GOP, the power of his brand would have been reinforced, and worth something to Democrats from Red States and right leaning districts facing tough re-election battles in 2010.

Obviously he couldn't, despite the fact that NJ has been a reliably Blue State for some time and swung heavily for Obama in 2008. If he can't save a Democrat in NJ, one might wonder, how will he manage to do so in states that went for McCain?

He stumped for Corzine by declaring that he needed him as Governor of NJ in order for him to implement his policies of hope and change. That this declaration didn't do the trick is not proof that votes against Corzine were votes against Obama, but it does suggest that placing the success of his agenda in the balance didn't exactly motivate the citizens of NJ to vote Democratic.

2) Whether or not these Republican victories can be dismissed has having no practical impact on federal governance, Blue Dogs who care more about getting re-elected than in driving home a left-wing agenda, assuredly, took notice that independents made a significant move to the GOP, and the presence and prestige of The Expected One didn't slow them down.

If one is a center-right politician to begin with and has obtained a seat in congress because of public support for center-right policies, the fact that the Speaker of The House has stated she is not concerned about losing House seats if she can get her left-wing policies enacted into law, is not likely to inspire strict party loyalty. The Blue Dogs in the House and Senate are coming to crunch time.
If they think opposing the Obama/Pelosi/Reid agenda serves their goal of remaining in power, better than supporting it will, guess which way they'll turn.

If Obama doesn't win on Healthcare it won't necessarily be his Waterloo. Clinton was able to rise from the ashes of left-wing immolation and become quite popular and get re-elected. It will however, be his Waterloo if he intends to attempt to govern from the left through the remainder of his one and only term.

1 Reply

@Merry Andrew,

Merry Andrew wrote:

Wise choice, George. I'm contemplating joining you on the recipe, travel and book threads.

It's unfortunate that the format of this forum doesn't allow us to put entire categories on "ignore."

Like a moth to the flame Merry?

0 Replies

@roger,

But if your company is rational, they bought equipment that they were going to buy anyway and they were taking advantage of a limited time deal. Buying equipment you don't need is not going to be beneficial to the company. If the government had said "as of Jan. 1, we are changing the depreciation rate" your company would have possibly moved up or delay purchases around this date, but otherwise it would have been business as usual.

1 Reply

@Finn dAbuzz,

Three things...

1) Sure. Obama gets a bit of a bloody nose from Corzine-- but this loss was hardly surprising. Voters clearly turned their back on Corzine (not Obama) and the result of this race has nothing to do with health care or any other national issue.

But Major Setback? Hah... this election has no lasting effect on Obama's administration other than the addition of a Democrat congressman.

2) The words "Obama" and "governing from the left" are ridiculous together. Governing from the left would mean.

a) pushing for Single payer healthcare (which he never even put on the table).
b) signing an executive order stopping enforcement (i.e. effectively ending) DADT.
c) stopping immigration enforcement outside of unscrupulous employers.
d) campaigning for same-sex marriage in Maine.
e) a commision to investigate the torture of the last 8 years and strong policy to make sure it never happens again.

There is an argument to be made that Obama is walking the right line by governing from the center.

Let me put it this way; the drop in the approval polls Obama is seeing isn't from the teabaggers (they hated him from the start).

3) You have the Blue Dogs all wrong.

If the Democrats don't accomplish anything (i.e. health care) they will lose seats in congress (you and I agree on this).

However. John Kerry isn't going to lose his seat. Barney Frank isn't going to loose his seat. Nancy Pelosi isn't even going to lose her seat.

Yep... it is in the Blue Dogs best interest to make sure their party is successful... cause if the Democrats go down, they will be the ones left out in the cold.

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@engineer,

To some extent. It's like the clunkers program. Some were going to trade anyway, some accelerated the buying plan, and some were actually motivated. Sure, the owner was constantly replacing equipment, so he got lucky. He was also motivated to expand the company. Being an optimist, he expected the oil and gas well servicing business to do well. Having a tax advantage made the gamble worth taking, and he again got lucky.

I don't believe the industry is as solid as it used to be, but he got a good run out of the new equipment.

0 Replies

will there be a war?

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