It's the Golden Rule

8/3/2019 It's the Golden Rule

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It's the Golden Rule; the people with the gold make the rules.........Just about

everything you need to know about taxes, the deficit, the rich and the poor.

PAUL KRUGMAN: The Obama administration wants to preserve those parts of

the original tax cuts that mainly benefit the middle class — which is an

expensive proposition in its own right — but to let those provisions benefiting

only people with very high incomes expire on schedule. Republicans, with

support from some conservative Democrats, want to keep the whole thing.

And there’s a real chance that Republicans will get what they want. That’s a

demonstration, if anyone needed one, that our political culture has become

not just dysfunctional but deeply corrupt. What’s at stake here? According to

the nonpartisan Tax Policy Center, making all of the Bush tax cuts

permanent, as opposed to following the Obama proposal, would cost the

federal government $680 billion in revenue over the next 10 years. For thesake of comparison, it took months of hard negotiations to get Congressional

approval for a mere $26 billion in desperately needed aid to state and local

governments. And where would this $680 billion go? Nearly all of it would go

to the richest 1 percent of Americans, people with incomes of more than

$500,000 a year. But that’s the least of it: the policy center’s estimates say

that the majority of the tax cuts would go to the richest one-tenth of 1

percent. Take a group of 1,000 randomly selected Americans, and pick the



one with the highest income; he’s going to get the majority of that group’s

tax break. And the average tax break for those lucky few — the poorest

members of the group have annual incomes of more than $2 million, and the

average member makes more than $7 million a year — would be $3 million

over the course of the next decade. How can this kind of giveaway be

justified at a time when politicians claim to care about budget deficits? Well,history is repeating itself. The original campaign for the Bush tax cuts relied

on deception and dishonesty. In fact, my first suspicions that we were being

misled into invading Iraq were based on the resemblance between the

campaign for war and the campaign for tax cuts the previous year. And sure

enough, that same trademark deception and dishonesty is being deployed on

behalf of tax cuts for the wealthiest Americans

Economist James Kwak who writes at Baseline Scenario with Simon Johnson,

explains why the House should allow the cuts to die with no action. I would

offer that the members should pepper the media with his explanations and

math; they could reduce the arguments to a paragraph. And they should.

Dems need to draw some clear lines between the parties and mean them.

He first addresses the question about conventional thinking that taxes

shouldn’t be raised in such ‘tough economic times’. He argues that there

would be at first be small bit of negative growth, the multiplier of tax breaks

is far smaller than for any type of government spending, especially in state

and local government. And he argues that later impacts would be greatly

beneficial to most Americans and the overall economy .

Additionally, tax breaks for the wealthy offer little positive impact to the

economy, as the rich spend less of their marginal income. And the income tothe Treasury would make the nation’s balance sheets healthier, and perhaps

calm down some of the scare-talk over debt and deficits.

Kwak also believes that if Obama and Congress kick the can down the road

again with a ‘temporary’ two-year extension of the cuts, they will almost

assuredly become permanent. . . .

He runs the numbers obtained from the Congressional Budget OfficeFamilies

in the median income quintile ($36,000-57,700) would pay about about $880

more in taxes; Families in the 80th to 99th percentile would pay an additional

$6094, and those in the fifth quintile (uber-wealthy) would pay about$339,473 more.









4.1% of earners that make over $100,000 annually, do not pay income taxes.



Craig Jennings in OMB Watch in August 2010 reported the following:

During the 1990s, when the top tax rates were at the levels to which theyare slated to return in 2011, small business employment rose by an averageof 2.3 percent — or 756,000 jobs — per year. In contrast, between 2001 and2006, when tax rates were lower as a result of the 2001 tax law, smallbusiness employment rose at only a 1.0 percent annual rate (367,000 jobsper year) — less than half as much.

Arguing that because small businesses are the primary job creators in theeconomy and that many do not incorporate and pay taxes as individuals,those who oppose the expiration of the upper-income tax contend that doingso would cripple job creation through small business investment. Based onthe empirical evidence, however, it appears that higher taxes for the rich arenot incompatible with economic growth or private investment.

He also displayed the following chart:



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It's the Golden Rule