Respectfully submitted by Lawrence Rafferty-Guest Blogger
I have a slightly different take on the debt ceiling discussion started by Mike Appleton earlier. The Debt ceiling issue is on every cable and broadcast TV channel and on just about every website and blog including here on Prof. Turley’s blog. The debt limit and its feared default has controlled the airwaves for weeks now, and it isn’t going to end soon if the news reports are to believed. The Democrats want increased revenue and the Republicans want cuts only to spending in order to convince both sides to do something that was done about 19 times during the preceding administration without much fanfare from either side. No matter who you support there is an easy solution to the problem and the majority of Americans agree with it. The Hill
A very easy solution to the U.S. Debt problem is to simply tax the wealthy and corporations at 1960 levels and according to one source, the debt would be erased within a decade. “Some numbers — from an Institute for Policy Studies report released this past spring — can help us better visualize just how monumental this political failure has been. If corporations and households taking in $1 million or more in income each year were now paying taxes at the same annual rates as they did back in 1961, the IPS researchers found, the federal treasury would be collecting an extra $716 billion a year. In other words, if the federal government started taxing the wealthy and their corporations at the same rates in effect a half-century ago, the federal debt to investors would almost totally vanish over the next decade.” Our Future
The Center for American Progress has provided additional evidence that corporations in the United States are taxed at a low rate when compared to other nations. I know we keep hearing about that corporations are over taxed and if we keep taxing them they will move their jobs out of the country. Here is a link to a series of charts that proves that US corporations are paying lower taxes than some would admit to. American Progress.org
‘ “Conservatives like to claim that our budget deficits are purely a “spending problem.” Said Senate Minority Leader Mitch McConnell (R-KY): “We don’t have this problem because we tax too little. We have it because we spent too much.” ‘ It’s a popular talking point, but it simply isn’t true. Deficits do not stem from spending levels alone. They are the product of a mismatch between spending and revenue. And when revenue is as low as ours is, you end up with big deficits.” American Progress
Now, it may sound trite or sarcastic, but the facts are clear that our so-called debt problems would be solved very easily without any draconian cuts to socially important programs important to the Left, and without deep cuts to the military budget that the Right wants to avoid. So why is it so difficult to reach this seemingly obvious solution? Why do the wealthy and Corporations have such a tight wrap on the DC regulars on both sides of the aisle? Could the answer be that both the wealthy and large Corporations have the funds to buy or at least ‘rent” Congress and convince Senators and Representatives to look the other way on tax increases?
It couldn’t be the money, could it? And all this time I thought that Gordon Gecko was a fictional character!
Respectfully submitted by Lawrence Rafferty-Guest Blogger.
kd The fight is over the independents as you say. Obama got them in 2012. The republican tea partyers got them in 2010. Read something this morning about how much independents like compromise. That does not look good for Boehner’s approach.
Kd you are stealing my Thunder. I was just ready to post the ABC Washpo article.
@swarthmore mom, each party has an automatic base of 35%-40%, the fight is the midle 20%-30%. That’s why our suystem works so well, we fight over moderate voters, parliamentary fight for the extremes
@rcampbell, your simplistic analysis ignores the disaster that was the 70s, when all that mal-investment caused by the tax policy you hold so dear caused the economy to come off the rails.
Back to Rafflaw’s point of restructuring tax laws. When corporate taxes were at 1960 levels it was expensive for owners to withdraw money for personal use and investment. They, therefore, kept money inside the company and used it to modernize facilities and equipment, training, wages/benefits. This contributed to stronger retained earnings, tighter debt-equity ratios and provided a cushion for surviving the down business cycles.
Since the 1980’s tax rates at the top end have been dramatically lowered and we’ve had three major bubbles burst (commercial bldgs in the 80’s; dot.come in the 90’s and residential housing in the 00’s) caused in part by too much money chasing paper gains with money that used to stay inside companies’ treasuries.
David Stockman, the guy who “invented” Reagan’s voodoo economics has agreed there’s been very little trickle down effect from the low tax model and calls it a failure.
Anyone suggesting the GOP path of no tax increases on the wealthy is an apprpriate one can only come to that conclusion by accepting that only the middle class should bear the burden of debt restructing. Any American who can accept that absurdity has forgotten completely what the American experiment is about.
Kd Liberal democrats will vote for Obama in the end but not so enthusiastically. I don’t think we will want Rick Perry. I would not wish a Perry presidency on anyone. He is much worse than Bush. There is no viable third party. Hope it does not turn out like Gore v. Bush. Nader was a spoiler. Most people are not happy with politicians period.
Now, comes a new ABC News/Washington Post poll with a whole harvest of revelations, among them, strong indications that Obama’s liberal base is starting to crumble. Among the nuggets:
Despite those hundreds of billions of blown stimulus dollars and almost as many upturn promises from Joe Biden, 82% of Americans still say their job market is struggling. Ninety percent rate the economy negatively, including half who give it the worst rating of “poor.”
Are You Better Off Today Than Jan. 20, 2009?
A slim 15% claim to be “getting ahead financially,” half what it was in 2006. Fully 27% say they’re falling behind financially. That’s up 6 points since February.
A significant majority (54%) says they’ve been forced to change their lifestyle significantly as a result of the economic times — and 60% of them are angry, up from 44%.
To be sure, 30 months after he returned to home cooking, George W. Bush still gets majority blame for the economy.
But here’s the breaking news for hopeful Democrats: George W. Bush isn’t running for anything except exercise.
“More than a third of Americans now believe that President Obama’s policies are hurting the economy, and confidence in his ability to create jobs is sharply eroding among his base,” the Post reports.
Strong support among liberal Democrats for Obama’s jobs record has plummeted 22 points from 53% down below a third. African Americans who believe the president’s measures helped the economy have plunged from 77% to barely half.
Obama’s overall job approval on the economy has slid below 40% for the first time, with 57% disapproving. And strong disapprovers outnumber approvers by better than two-to-one.
(source)
Obama is as Republican as they come in fact he’s Bush jr’s third term the way it worked out. He’s absolutely no progressive and “caving in” is his way of compromise. i can’t believe our next election is going to be an all Republican choice – either Obama or one of the bat-shit crazies.
MOMMIE DEAREST!!!!!!
LOL
Roam,
Both.
The President in his speech seemed t embrace both his original balanced
approach which includes new revinue and Reid’s plan which doesn’t.
When he asked everyone to contact their members of congress, is he counting on that response so that the Reid plan becomes a plan that
includes new revenue? I agree that Obama came off as the winner,
Boehner looked like the wiked stepmother from the Tea Party.
HUH?
Yikes … that was easy?
What did TOTUS say? I missed it.
Rafflaw do you decide this on the makeup on the politicians, or the makeup of the plans?
We need someone like Ron Paul.
OK
AGREE! WISH I KNEW WHO MY HERO WAS!
Sorry folks I meant to say “detailing” how we got into this mess, not derailing.
SwM–Bonehead has proven once again how extreme he and his party are. It is frightening.
I’m calling tomorrow too!
I have to agree that Speaker Boehner lost that unofficial debate. He did win the makeup contest. Way too much!