Posted by Ray on July 15, 2010 under Main | 
Mark Haines: “Higher taxes creates more jobs.” No, I am not making this up, he really said this and he is basing this on 18 years of history from the Clinton years to the Bush years. I am not exactly sure when Mark went off his rocker, but he definitely hit his head, hard, when he landed. I have never heard such stuff in my entire life and it makes no sense. Let me explain.
Did Clinton raise taxes? Yes, he did. Did jobs increase? Yes they did. However, when did jobs increase? Not until after 1994, the Republican Revolution and some of Clinton’s tax policies were reversed, like his huge tax hike on the retired, the largest in history I might add. It is also important to note that this is when the internet came into everyday life and altered the business model of U.S. corporations and created a “new economy” which turned out to be horse poop, there is never a new or old economy, and there is merely an economy. However, the internet did improve efficiency, pricing and competition which create growth. All of this combined with dirt cheap oil led to the greatest economic expansion we have ever had, there is no question about that.
However, comparing the 1990’s to the 2000’s is crazy. It is the same thing as comparing the roaring 1920’s to the 1930’s, there is just no way you can make the comparison in an honest fashion and say there is any correlation. In fact, taxes were low in the 1920’s and we had a similar expansion as the 1990’s and taxes were higher in the 1930’s and unemployment was through the roof, so according to Haines the opposite should have happened. Also, according to Haines, the 1970’s should have been boom years as well as taxes were way up, but if memory serves me correctly the 1970’s, besides the Bee Gee’s, ABBA and Marvin Gay, sucked.
I guess the mandate from corporate, GE, to make the current administration look awesome and push their policies, no matter what, really went to Mark Haines’s head and he took it literally. I guess if we can prove Stalin had economic growth through killing 20M of his fellow citizens that too would be a good enough policy to enact here as well? I am just wondering how far he would go with his whacky correlations since he is clearly left of center. Higher taxes means people will spend less in order to save for the future tax bill, I save more when I know I have taxes coming up, I mean, this is economics 101. Hell, this might be business law high school style it is so basic, but not in bizzaro world. In fact, I am wondering if the market would not shoot up 1,000 points, with no circuit breakers of course because it is an up day, on the news of a VAT and a marginal income tax rate of 95%.
I get it, everyone hates Bush, I don’t blame them, and everyone wants to blame a policy for our problems, but making stuff up isn’t the answer. Pulling correlations from two uncorrelated periods is not the answer. Personal ideology being interjected into what is supposed to be unbiased reporting is not the answer. Is there any wonder why NBC as a whole is in decline? Businesses will not higher if they do not know if their effective tax rate is going to be 15% or 50% next year or how much health care per employee will cost them. They will not hire if they think end demand will not be there because people, like me, are saving to pay those higher tax bills that are coming. This is basic business sense which is clearly lost on the, what is their motto, “The #1 Business Network?”
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Posted by Ray on March 18, 2010 under Main |
Those are words you will never hear in Washington because, from what I gather, they have no idea how a calculator actually works. I just started reviewing this new bill, you know, the one so popular that the phone lines to Congress were jammed all week long, and it does not add up. I shouldn’t say that it does not add up, I should say that the assumptions are ridiculous.
They decided the best way to go was to raise the Medicare tax “only” on individuals making over $200,000 a year and couples making over $250,000 a year. The income tax increase is .9% for the Medicare tax, this will be in addition to the other coming tax hikes coming at the end of this year, and there is now an unearned income Medicare tax. So, if you make a lot of money and have dividends or interest you will have to pay an additional 3.8% tax on those investments, so much for investors buying dividends stocks.
Here is the problem, the Democrats claim this tax hike will raise $210B paying for roughly 20% of this bill. Are these people for real? Why would investors hold income producing investments if they will lose 3.8% on the interest earned? They will not because they will buy a variable annuity or growth stocks that pay nothing in dividends. That blows that $210B figure right out of the water, but the Medicare income tax hike is hard to get around. Unless you can control how much you are getting paid you will have to pay that tax, but it will surely have repercussions.
For the first time ever we have an administration who is going to impose one of the largest tax increases on Americans during a recession. I take that back, this did happen twice before, the 1930’s and the 1970’s and both decades were terrible. I can hear many of you now, it is only on the rich! Well, I got news for you first, there has never been one estimate from Congress on taxation, revenue generated and cost that has ever been right. Second, there is no way that only people making over $299K a year can pay for this program, it is impossible. That $200K number will trickle down to, my guess at least, to the sweet spot of $150K for individuals and $175K for couples which is a lot of people I might add.
Insanity does not begin to describe what is happening right now. I mean, sure the President signed an $18b jobs bill today and is about to urge the passing of a trillion dollar spending bill, do you see something wrong with that? It is a bit disproportionate and, frankly, right now the country needs jobs. At this point I just hope we have a real up or down vote on this bill so we know where our Congressional member stands and we do not go through with this sneaky backdoor deemed to pass vote.
I cannot wait to read the full bill, but, unfortunately, I will not have time until well after it is passed. I do know that ultimately this is bad news for all of the country because it was not put together properly. All the people wanted was for Congress to start over and do this the right way, no one is in the “do nothing camp.” Unfortunately, that is not to be and we are on the verge of expanding upon already existing failed programs. Essentially, it is like taking Medicare, which is almost broke, and giving it to everyone, good idea! Actually, that is Alan Greyson’s idea right now, Medicare for all is what he says, but, as most lawyers are, he is illiterate to just how ugly the balance sheet of the government or Medicare really is. Good luck!
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Tags: congress, democrats, dividends, health care reform, income producing investments, income tax, medicare, medicare tax, recession, repercussions, tax hike, tax increases, taxation, unearned income
