T Nation

Obama's Going to Do What?

I’m still clinging to hope that the sources have their facts wrong.

It’s being widely reported that Obama will announce in his speech to congress tomorrow that he’s imposing an increase in the captial gains tax.

Let me understand this: Even the most liberal economists oppose this because it will actually result in LESS tax revenue. Clinton reduced it, tax receipts rose. Bush reduced it further, tax receipts rose again. The trend is simple: Lower taxes = MORE investment = MORE tax $ for the fed.

By raising the tax we’ll see LESS investment and LESS revenue for the federal government.

The market is headed under 7,000. People are losing their savings, 401Ks, etc. Don’t we WANT more investment? Don’t we WANT people to EARN? Doesn’t the fed WANT more tax dollars?

Someone help me out here. What am I missing? WHY would a president do something that is bad for government, bad for citizens? Perhaps someone can give us an opinion as why this is actually a GOOD thing?

Charlie Gibson asked him this during the campaign, posing the question specifically as it being the case that increasing the tax rate would decrease revenues, therefore why does Obama want to do it?

Obama didn’t disagree it would decrease revenues. He said it should be done because it would be “more fair,” that there were people making too much money in capital gains and that was not right, they should pay a higher rate.

So that is why it is a good thing. It is “more fair,” taking money away from those who are earning too much in capital gains, never mind that no one is benefited from the process. Not any individual, nor the country as a whole.

Except I suppose all those feeling warm and toasty knowing that more money was taken from others earning “too much,” by making them feel warm and toasty. Never mind that it hurts the economy and thus hurts everyone. That’s not as important.

Everyone loses. But it’s ‘more fair’. God help us if that’s his reasoning.

I recall him mentioning ‘fat cats’ in many of his speeches. I assumed that this was just the typical election year class warefare stuff. Maybe not.

THIS is change I can’t believe. Everyone loses…but it’s fair? Fair to WHOM?

A person might have thought that the psychology, decisions, and arguments of the leftists in Atlas Shrugged were over the top, but that psychology in fact does exist.

[quote]Bill Roberts wrote:
A person might have thought that the psychology, decisions, and arguments of the leftists in Atlas Shrugged were over the top, but that psychology in fact does exist.[/quote]

Ja, and that is really scary.

People say that her novels are close to unreadable and that nobody acts that way in real life and then you turn on your tv and there they fucking are.

This mentality has been painfully obvious to me for some time now. Nobody cares about their own quality of life except in comparison to others. It’s quite disturbing.

I told this story in another thread awhile back, but I think it is relavent to this thread.

For christmas, my grandmother still gives all the grandchildren and their spouses a check for not much money. I think it was $20. She does have 20 or 30 grandchildren. My sister asked me how much we got. I told her $20 each.

Now, she spends quite a bit of time talking with my grandmother and visting with her when she is in town. I spend virtually no time with my grandmother.

Her comment was priceless. She admitted to hoping that I would have received less than her, becuase I don’t pay much attention to my grandmother. She was perfectly happy with her $20 until she found out that I had also received $20.

If $20 registers on give-shit-meter, can you imagine how insane some people get when others are making millions more?

There are policies that will absolutly raise the standard of living for virtually all americans, but these policies are not politically correct becuase someone may be proportionally better off.

Like somehow my neighbor making more money than me effects my quality of life in any negative way. Quite the opposite. He’ll probably be more likely to pick up the bar tab.

[quote]dhickey wrote:
This mentality has been painfully obvious to me for some time now. Nobody cares about their own quality of life except in comparison to others. It’s quite disturbing.

I told this story in another thread awhile back, but I think it is relavent to this thread.

For christmas, my grandmother still gives all the grandchildren and their spouses a check for not much money. I think it was $20. She does have 20 or 30 grandchildren. My sister asked me how much we got. I told her $20 each.

Now, she spends quite a bit of time talking with my grandmother and visting with her when she is in town. I spend virtually no time with my grandmother.

Her comment was priceless. She admitted to hoping that I would have received less than her, becuase I don’t pay much attention to my grandmother. She was perfectly happy with her $20 until she found out that I had also received $20.

If $20 registers on give-shit-meter, can you imagine how insane some people get when others are making millions more?

There are policies that will absolutly raise the standard of living for virtually all americans, but these policies are not politically correct becuase someone may be proportionally better off.

Like somehow my neighbor making more money than me effects my quality of life in any negative way. Quite the opposite. He’ll probably be more likely to pick up the bar tab.[/quote]

Good post. I find it hard to admit it but we live in a time that the greater good - if it happens to mean that some folks get rich, stay rich, etc. - takes a back seat to what some perceive as ‘fair’. Even though fair does not work for or benefit anyone.

I used to say that I resented democrats for playing class warfare every four years. “Every four years, everyone hates ‘the rich’”, I’d say. “The other three, everyone wants to BE rich.” It’s not like that anymore, especially in Obama’s America. I think we are entering a time when wealth is punished. We’ll see less investment, less innovation, less risk-taking, less profit, less prosperity, and fewer people becoming ‘rich’. Fewer small businesses, fewer employers, fewer jobs.

One thing you can say: It’s a month in and it’s already apparent that Obama was being honest when he said we ‘gotta spread that wealth around’.

I think raising the capital gains tax is one of the dumbest things government could do and will have a contrary effect on investments and revenue. Therefore I am sure Obama will ask for it.

I’m still waiting for one person who can defend this decision. Can anyone at least try to make the argument that this is a good thing? Doesn’t anyone ‘Got Hope’?

It’s little more than a month in. I get that. But this is shaping up to be the most disastrous presidency imaginable. Wrong guy. Wrong time. It’s almost like common sense has been tossed out the window! They loved to talk about how Bush was not ‘intellectually curious’. Well…is that fact that Obama is steering the nation toward bankruptcy mitigated by the fact that he’s ‘nuanced’.

[quote]ProwlCat wrote:
I’m still clinging to hope that the sources have their facts wrong.

It’s being widely reported that Obama will announce in his speech to congress tomorrow that he’s imposing an increase in the captial gains tax.

Let me understand this: Even the most liberal economists oppose this because it will actually result in LESS tax revenue. Clinton reduced it, tax receipts rose. Bush reduced it further, tax receipts rose again. The trend is simple: Lower taxes = MORE investment = MORE tax $ for the fed.

By raising the tax we’ll see LESS investment and LESS revenue for the federal government.

The market is headed under 7,000. People are losing their savings, 401Ks, etc. Don’t we WANT more investment? Don’t we WANT people to EARN? Doesn’t the fed WANT more tax dollars?

Someone help me out here. What am I missing? WHY would a president do something that is bad for government, bad for citizens? Perhaps someone can give us an opinion as why this is actually a GOOD thing? [/quote]
He’s not imposing. He’s letting the tax cuts expire on the wealthy. That’s the way republicans wrote them into law, with expiration dates in 2010, so they could , you know, hide the long-term costs, as in these things don’t pay for themselves.

(The below is in reference to income tax, for which I have the figures – the same principle would apply to capital gains tax.)

Ah, I see.

Those small businesses – most of which file their profits as personal 1040 income – that have been paying at a 33% rate, thus having 67 dollars out of every 100 of profit left to them, and will under Obama be taxed at a 39% rate (I read in some major media source within the last couple of days it will be over 39% though) and therefore have only 61 or fewer dollars left to them, will not see this as having only 61/67ths or less of their profits remaining, and thus less left for anything that might grow their business or hire more people.

Nope, they will see it as taxes just going back to what they {“really have been all along” and thus no change, no increase! And therefore no adverse effect on the economy.

It is only those double-speaking right wingers that would call going from 33% to 39% or more a “tax increase.” You are right.

Christina Romer has an interesting study on the effects of tax raises and cuts.

[quote]100meters wrote:
ProwlCat wrote:
I’m still clinging to hope that the sources have their facts wrong.

It’s being widely reported that Obama will announce in his speech to congress tomorrow that he’s imposing an increase in the captial gains tax.

Let me understand this: Even the most liberal economists oppose this because it will actually result in LESS tax revenue. Clinton reduced it, tax receipts rose. Bush reduced it further, tax receipts rose again. The trend is simple: Lower taxes = MORE investment = MORE tax $ for the fed.

By raising the tax we’ll see LESS investment and LESS revenue for the federal government.

The market is headed under 7,000. People are losing their savings, 401Ks, etc. Don’t we WANT more investment? Don’t we WANT people to EARN? Doesn’t the fed WANT more tax dollars?

Someone help me out here. What am I missing? WHY would a president do something that is bad for government, bad for citizens? Perhaps someone can give us an opinion as why this is actually a GOOD thing?
He’s not imposing. He’s letting the tax cuts expire on the wealthy. That’s the way republicans wrote them into law, with expiration dates in 2010, so they could , you know, hide the long-term costs, as in these things don’t pay for themselves.
[/quote]

End result is the same: He’s raising taxes in a recession. I’m waiting for someone to tell me why this is a good idea. I’m also willing to let you explain how increasing the CG tax to 20% (from 15%) will spur investment, growth, and all the other good things that happen when you move OUT of a recession.

So, increasing taxation by 1% of GDP reduces GDP by 3%?

Well worth it to reduce the country’s total production, therefore total wealth produced, if it means those fat cats will have less! I will feel better then! And that is well worth me being poorer as a result too!

My guess is that tomorrow night, after Obama’s speech, there will be plenty of folks around to tell us why this is all a brilliant idea…Just as soon as His Majesty issues the talking points. Until then…silence.

[quote]ProwlCat wrote:
My guess is that tomorrow night, after Obama’s speech, there will be plenty of folks around to tell us why this is all a brilliant idea…Just as soon as His Majesty issues the talking points. Until then…silence. [/quote]

It’s proof that it’s the wrong direction for capitalism when anyone from the administration opens their piehole…the DOW crashes with each word that spews from their mouths.

[quote]Bill Roberts wrote:
So, increasing taxation by 1% of GDP reduces GDP by 3%?

Well worth it to reduce the country’s total production, therefore total wealth produced, if it means those fat cats will have less! I will feel better then! And that is well worth me being poorer as a result too![/quote]

You’ve really hit the nail on the head with this line of thought. There are those who would accept the nation as a whole being worse off, as long as those dastardly rich folks were hurt in the process.

[quote]Rockscar wrote:
ProwlCat wrote:
My guess is that tomorrow night, after Obama’s speech, there will be plenty of folks around to tell us why this is all a brilliant idea…Just as soon as His Majesty issues the talking points. Until then…silence.

It’s proof that it’s the wrong direction for capitalism when anyone from the administration opens their piehole…the DOW crashes with each word that spews from their mouths.[/quote]

I don’t think that they could do a better job of wrecking this whole thing if they did it on purpose. Everytime anyone from the administration says ANYTHING it’s prefaced by something along the lines of “things are going to get worse before they get better” or ad nauseum comparions to the Great Depression. It seems they are so concerned with setting the bar low that they sap all investor and consumer confidence by constantly telling people how awful it’s going to be. Someone from the administration recently said, “If you think it’s bad this year, wait until next year!” Meanwhile the markets are in free-fall and layoffs are increasing in scope and frequency. People are preparing for the carnage this administration seems to believe is on the way.

Roosevelt said “we have nothing to fear but fear itself”. Which was his way of saying that fear was one of the elements that helped to deepen the depression. Reagan talked about ‘morning in America’. Obama keeps spewing about the Great Depression and worsening unemployment and sacrifices and pain and suffering. There comes a time when perception, especially when painted by the president, becomes reality. The reality is a 2,000 point drop in the market since he was elected. Either he knows that his plan will trash what’s left of the economy and do irreversible harm and he wants the bar set very, very low OR he knows that it’s going to turn around mid-this year and really start rolling early next year (as economists are not saying) - and he wants the credit. I hope it’s the latter.

[quote]ProwlCat wrote:
100meters wrote:
ProwlCat wrote:
I’m still clinging to hope that the sources have their facts wrong.

It’s being widely reported that Obama will announce in his speech to congress tomorrow that he’s imposing an increase in the captial gains tax.

Let me understand this: Even the most liberal economists oppose this because it will actually result in LESS tax revenue. Clinton reduced it, tax receipts rose. Bush reduced it further, tax receipts rose again. The trend is simple: Lower taxes = MORE investment = MORE tax $ for the fed.

By raising the tax we’ll see LESS investment and LESS revenue for the federal government.

The market is headed under 7,000. People are losing their savings, 401Ks, etc. Don’t we WANT more investment? Don’t we WANT people to EARN? Doesn’t the fed WANT more tax dollars?

Someone help me out here. What am I missing? WHY would a president do something that is bad for government, bad for citizens? Perhaps someone can give us an opinion as why this is actually a GOOD thing?
He’s not imposing. He’s letting the tax cuts expire on the wealthy. That’s the way republicans wrote them into law, with expiration dates in 2010, so they could , you know, hide the long-term costs, as in these things don’t pay for themselves.

End result is the same: He’s raising taxes in a recession. I’m waiting for someone to tell me why this is a good idea. I’m also willing to let you explain how increasing the CG tax to 20% (from 15%) will spur investment, growth, and all the other good things that happen when you move OUT of a recession.
[/quote]

It’s a good idea, because we have to lower the deficit. So likely we’ll be cutting spending and letting taxes return to their “communist” but still historically very low levels of 2000.

[quote]Sloth wrote:
Bill Roberts wrote:
So, increasing taxation by 1% of GDP reduces GDP by 3%?

Well worth it to reduce the country’s total production, therefore total wealth produced, if it means those fat cats will have less! I will feel better then! And that is well worth me being poorer as a result too!

You’ve really hit the nail on the head with this line of thought. There are those who would accept the nation as a whole being worse off, as long as those dastardly rich folks were hurt in the process. [/quote]

Just how bad were they hurting in the year 2000?