Hard to argue with this proof!

[Little Stevie]

The Tea Terrorists are a fickle group. Besides being inherently stupid, they would be calling for Reagan's ouster with the former president's speech below.

With regard to tax loopholes for millionaires, Ronald Reagan's answer was recorded multiple times. See how the following clip compares history with today.

[wellendowed1911]

Liittle Steve God Bless you- that was perfect- What the hell you Republicans have to say now?????

[blue3122]

The tax code today is nothing like the tax code of the 1980s. The biggest tax loophole used to be for energy (E&P (exploration & production)) and real estate investment trusts. It was possible until 1984 (phased out until 1988) for someone with over $1 Million in income to pay little or no taxes by investing in certain tax sheltered entities. As Reagan correctly pointed out, there were specific reasons for those tax benefits (I don't like the term "loopholes" because it indicates that the investor did something wrong rather than just follow the law). The Energy limited partnership tax shelters were created so drillers could easily raise capital required to drill and explore for more energy. It made these investments attractive post WWII and allowed our energy industry to attract capital. The real estate investment trust tax benefits was enacted due to the baby boom. Just like energy, the policy was thought to allow developers an advantage in raising capital so they could build apartments and office buildings for an expanding economy.

These have long been gone so while Reagan and Obama may be using the same words, they are not talking about the same tax code.

As for something that makes sense, reduce the corporate tax to 5% or just eliminate it. Make all income pass through. (or almost all). Notice I said nothing about not getting the tax revenue. One problem with corporate taxes is that the IRS and Corporations spend as much on calculating and collecting as the amount paid in (not quite but about 85-90%) Pass through to dividends and tax dividends at a flat tax of 20-25%. Cap mortgage interest deductions. (Bigger house gets no advantage).

There are a lot of simplifications that could be made that would reduce the cost of calculating, reporting, and collecting taxes . Maybe we could reduce the size of the IRS.

Taxes are not the biggest impediment to job growth. The regulatory environment is crippling job creation right now. I work in energy and between the EPA, DOE, and Obamacare (we just don't know what it will cost), we are spending 4 times more on compliance and reporting than we did in 2006. (I looked yesterday). Our business is only 1.3 times the size but we are and have been on a hiring freeze for the last 18 months.

Restructuring the tax code will probably still bring in about 19% of GDP in revenue. I think that percentage has been fairly stable for a long time. So if that is stable, it would seem the way to get more revenue would be to grow GDP.

[wellendowed1911]

blue3122 nice try but Reagan clearly is talking about the same thing- he basically said their are millionaires who are paying little to nothing and that they need to pay their(rich) fair share. He gives an example of the bus drier asking to pay 10% of the taxes- he than ask the audience should the rich pay more or less taxes- and the audience overwhelming says "More". How in the heck are you going to say that he's talking about something different?
Obama has been saying the exact same thing - rich should pay more taxes and he used the Warren buffet scenario- you are being very dishonest by saying they are talking about two different things.
Honestly if Reagan wouldn't recognize the GOP of today- this is surely not the same GOP party of the Reagan years.

[blue3122]

http://online.wsj.com/article/SB1000...209741952.html

I was pointing out that the tax code today is very, very, very (emphasis on "VERY") different now than it was 30 years ago.
The "question" that I have yet to see anyone (liberal, conservative, libertarian) answer is "What is fair?"

If you believe Adam Smith, the definition of fair depends on whether we are in a zero sum game (stagnant economy), positive sum game (growning economy) or neagtive game (shrinking economy) but as an individual the definition always begins the same way "More for me".

If you can point me to someone who doesn't want more then they have reached their bliss point and more power to them.

What I was pointing out was that the tax shelters of the 1980s do not exist any longer. The biggest differences are that dividends are taxed at a lower rate. That is to encourage capital formation (this is important if you want growth). It has been argued by most economists that taxing dividends represents double taxation. I think a "cleaner" solution is to eliminate corporate taxes and increase the tax on dividends. It would certainly decrease the regulatory/compliance burden.

Largely Hauser and Laffer surmised this and the data bears out, the changes in the tax code do not have any long term effects. We still end up at 19% (give or take a point or two in some years). So the trick is to get 19% of a bigger pie.

One advantage that Reagan had was a tax code that had more glaring inefficiencies. Currently, there are no real tax shelters like what existed 25-30 years ago. There are and probably always will be, some tax deferments but those at best delay payment by a couple of years.
Can we make the code simpler and thereby reduce the burden of compliance? I think so. Can we suddenly collect 25% of GDP without doing damage? The past numbers don't lie.

[Laz]

Originally Posted by wellendowed1911

blue3122 nice try but Reagan clearly is talking about the same thing- he basically said their are millionaires who are paying little to nothing and that they need to pay their(rich) fair share. He gives an example of the bus drier asking to pay 10% of the taxes- he than ask the audience should the rich pay more or less taxes- and the audience overwhelming says "More". How in the heck are you going to say that he's talking about something different?
Obama has been saying the exact same thing - rich should pay more taxes and he used the Warren buffet scenario- you are being very dishonest by saying they are talking about two different things.
Honestly if Reagan wouldn't recognize the GOP of today- this is surely not the same GOP party of the Reagan years.

As was stated same words but different underlying situation. Claiming that they are saying the same thing without recognizing the differences in the tax code is dishonest. Reagan was lowering the tax rate while closing loopholes to prevent people from gaming the system. There were a lot of investments structured to create tax deductions at the time because tax rates were so high that it was profitable to break even or even loose money in an investment that generated tax deductions. Reagan eliminated that situation by lowering the tax rate and eliminating the deductions.

Obama wants to raise taxes and eliminate deductions. He could probably get support for changes that simplified the tax code and eliminated unnecessary deductions.

[Little Stevie]

Blue,

I can't argue with some of the specifics of what you say because you are right on some of the issues you bring up. HOWEVER, I would counter that some of the "loopholes" are put in place by politicians who respond to lobbyists paid for by "corporate persons" that didn't exist in Reagan's day.

Besides that, your dissertation attempts to draw attention away from some of the basic similarities between their taxation concepts.

Nowadays, you are correct about some of the taxes being different but I certainly would be against your industry's influence being any greater than it already is on the EPA or the DOE.

To use similar hyperbole, you could make a case that we would have balsa wood nuclear reactors and oil spills would be promoted as healthy. Example - The tobacco industry once promoted smoking as a treatment that would lessen cold symptoms. I fear that those abuses would return if your industry and other corporate cartels could write those rules.

I WANT my airplanes inspected by the FAA. I WANT seat belts and airbags and side impact airbags and someone trying to keep Clinton's buddy from dumping chicken entrails into the river. I want my four grand children's pajamas to be flame retardant. I want health insurance companies to be prevented from shrinking the amount of coverage per dollar and I want them EXECUTED as corporate persons when they even try using the excuse of a "pre-existing condition". The assholes have the actuarial data to predict those numbers and charge accordingly but they've gotten used to changing the rules by buying legislators.

And YES, they bought the rights to Obama's health care program largely due to the interference they ran through those fake front group "Town Hall Meetings".

I'll agree with gearing down the IRS and OSHA because they are "self-funded" and that makes them potentially vicious and creates doubt about their ability to be fair about fines with their growth and budget on the line.

It is the same backwards capitalistic approach that creates havoc when insurers are rewarded for cheating sick people by earning more money and knowing that tort reform limits make their daily cheating of thousands of clients (claims of less than $25,000-$50,000) too costly to litigate.

Address the bottom line - not making ordinary Americans pay higher rates than corporations or the wealthy. I'm sure you can see that despite using a complex form of "changing" the equation, neither Reagan nor Obama WANTED millionaires paying a lower tax rate than the middle class.

[blue3122]

Probably the biggest difference between Reagan's policy and Obama's is specifics. The Reagan White House sent a specific list of changes to be made but never defined "fair".
The Obama White House makes a lot of statements but never presents a list of specifics and they always want "fair" but cannot seem to define it. Until we get specifics, all I hear is are speeches where Obama wants everyone to dislike the rich guy. Reagan wanted everyone to want to be the rich guy and work for it rather than bitch about it.

[blue3122]

Do you want to eliminate millionaires? Because the majority of people worth more than a million $ actually make less than $150k. There is a difference between someone making $1 million and someone worth $1 million.

The number of people making over $1 million is laughably small. Even if we took 60% of there income it would only be around 40 billion. Or less than 1% of the Obama deficit. My question is "What is fair.".

[wellendowed1911]

Originally Posted by blue3122

Do you want to eliminate millionaires? Because the majority of people worth more than a million $ actually make less than $150k. There is a difference between someone making $1 million and someone worth $1 million.

The number of people making over $1 million is laughably small. Even if we took 60% of there income it would only be around 40 billion. Or less than 1% of the Obama deficit. My question is "What is fair.".

I will tell you what's NOT fair: , the top 1% of households (the upper class) owned 33.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business had 51%, which means that just 20% of the people owned a remarkable 84%, leaving only 16% of the wealth for the bottom 80% (wage and salary workers)

I will tell you whats laughable is when in America the 400 richest people have more combined wealth than the next 150 million combined.
Also, I am tired of this bullshit concept from the right that if you tax the wealthy you are punishing success- that's total bullshit. I am a Pharmacist by profession and I make a good salary of roughly 115k a year- that doesn't mean that I am 5 times more successful than a person making 20k a year or that a person make 10 million worked 100 times harder than me- I would find it very wrong if my technicians were paying a higher tax bracket than me-I have no problems paying taxes and I expect to pay more taxes than someone making considerable less.

[CuteOldGuy]

Reagan's plan was simple, lower tax rates and broaden the tax base by eliminating loopholes. Over the years, thanks to lobbyists and corrupt politicians, the loopholes have returned without the corresponding rate increase. We have one of the highest corporate income tax rates in the world, yet General Electric pays no income taxes. Why? Loopholes.

Don't think this means I support raising tax rates, the rate is irrelevant, because the rich will always find away around the higher rates. It will be this way so long we depend on an income tax system for revenue. The reason Warren Buffett pays a lower rate than his secretary? His income is capital gains, taxed at a much lower rate than ordinary income. Why? Because the rich, and the unions, earn much of their income from capital gains.

Raising the income tax rate on people like Buffett is irrelevant, he doesn't earn income. He realizes capital gains. It's all smoke and mirrors, and designed to be as confusing as hell so the politicians can demagogue for their rich cronies, while making the common guy think that he is looking out for him. The income tax isn't about revenue, it's about control. Argue all you want, but it's not going to matter. If rates go up, so do loopholes.

[CuteOldGuy]

WE, what the hell are you talking about? Do you think there is this finite amount of wealth that everyone is fighting for a piece of? Yes, many of the rich obtained their wealth through manipulating the government. The whole point of government these days is to hold down the common guy and give the wealth to Wall Street and others. President Obama is no different. There's a reason why the auto industry, AIG and others didn't have to go through bankruptcy like ordinary folks. They might lose money! So Obama took money from the taxpayers, and gave it to them.

The income tax is a shell game, and you are never going to pick the right shell. It's time to change the game.

[blue3122]

EXACTLY, WE. You make $115K per year. You are likely (or will be) worth $1 million. If you live reasonably and invest and get dividends and capital gains, eventually you will be a millionaire. This is how most people worth $1 million or more get it. Slowly.
But you never answered my question. What is fair? 50%, 70%, 90%.
Its easy to change the tax code and tax dividends at a higher rate so an investor doesn't get a break. What if a person who makes $80K per year, and is taxed including Social/Medicare about $20,000 year but lives on $25000 per year and invests the other $35000. If this happened for 30 years and he earned an average capital gains of 7% per year, this person would be worth a little over $3.5 million. If he now gets dividends of $80000 per year, should he be taxed at a higher rate than when he was working? It seems that this is exactly the type of people we are attacking. The person who saves and invests and is patient then wants to retire and not work. If you just want to raise the rate on people who have INCOMES over $1 million. go ahead. it will not make a dent in the deficit but it might make someone feel better about themselves for 2 minutes.

[CountryGentleman35]

What about cain's 999 plan? Will it work?

[Little Stevie]

I agree with the obvious "bastardization" of the term "millionaire". His speeches all target taxing people who EARN far more than people taxed at a greater rate.

At various times, Obama and others who see the need for a balanced approach that includes both spending cuts and revenue increases have proposed taxes or surcharges on persons earning above $250K PER YEAR, above $500K PER YEAR and on persons earning above $1M PER YEAR.

Only one Republican has seen fit to acknowledge the wisdom of any of those proposals because the rest work for and have signed pledges to their corporate-paid lobbyist/boss, Grover Norquist. Rest assured that Grover will sell the interests of ordinary Americans out to the highest corporate bidder.