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Democrats' latest tax proposal

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  • Are you sure you want to delete this post?
        
    I have a question about the Democrats’ latest tax proposal:

    http://www.washingtonpost.com/business/economy/democrats-in-a-stark-shift-in-messaging-to-make-big-tax-break-pitch-for-middle-class/2015/01/11/d4438468-9999-11e4-a7ee-526210d665b4_story.html

    The proposal seems to reflect the middle-out (rather than top-down) approach to economic growth as articulated by Robert Reich and others.

    It raises taxes on top earners and corporations and transfers that money into the hands of middle-class consumers. Increased consumer spending supposedly leads to job creation.

    The difficulty is predicting how the top earners and corporations will react. It seems to me they can respond to the increased demand by: (a) creating jobs , (b) raising prices, or (c) shrinking in size due to the new tax burden.

    If (b) or (c), the middle-out approach benefits no one.

    Any insights?
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Tax cuts for the middle class and poor have more of a stimulative effect on the economy than tax cuts for the rich or corporations. Middle class workers are certainly more likely to spend their extra income, which translates into more dollars in circulation. The rich and corporations are less likely to spend the extra income on consumer goods and services. Those are no brainer concepts that have been pushed by Reich and others for a long time.

    Democrats and Obama have been pushing for a massive spending program on our declining infrastructure for a long time. It makes good sense with the cost of borrowing very low, a supply of skilled labor waiting to go back to work, and the deficits in good shape. CBO analyses also show that would have a stimulative effect on the economy.

    There is also bipartisan support in the Senate for raising the gasoline tax to pay for highway infrastructure improvements.

    Unfortunately though nothing will be passed in the House...nothing. They are so consumed by their hatred for Obama that anything that will help the economy and jobs that might make "Obama look good" is off the table. Republicans in the House especially would rather sink the economy to spite Obama rather than help ordinary folk. They might talk a good game, but watch what they do...NOTHING.

    So the Democrats tax proposal will never be considered. It might have mileage in the 2016 election, but that's all. My opinion.
  • Independent
    Ft.myers, FL
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    Schmidt Wrote: Tax cuts for the middle class and poor have more of a stimulative effect on the economy than tax cuts for the rich or corporations. Middle class workers are certainly more likely to spend their extra income, which translates into more dollars in circulation. The rich and corporations are less likely to spend the extra income on consumer goods and services. Those are no brainer concepts that have been pushed by Reich and others for a long time.

    Democrats and Obama have been pushing for a massive spending program on our declining infrastructure for a long time. It makes good sense with the cost of borrowing very low, a supply of skilled labor waiting to go back to work, and the deficits in good shape. CBO analyses also show that would have a stimulative effect on the economy.

    There is also bipartisan support in the Senate for raising the gasoline tax to pay for highway infrastructure improvements.

    Unfortunately though nothing will be passed in the House...nothing. They are so consumed by their hatred for Obama that anything that will help the economy and jobs that might make "Obama look good" is off the table. Republicans in the House especially would rather sink the economy to spite Obama rather than help ordinary folk. They might talk a good game, but watch what they do...NOTHING.

    So the Democrats tax proposal will never be considered. It might have mileage in the 2016 election, but that's all. My opinion.
    I saw on CNBC that the CEO of Disney got a reward of 46 million for running this company the past year. Do I have to say anything more.
  • Democrat
    Philadelphia, PA
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    I am so sick of the catchword "infrastructure", here in Pa. in just the last year we have had taxes raised for the infrastructure , turnpike tolls raised, proposed extraction taxes, a new proposal for raising gas taxes at the pump, for guess what "infrastructure". if not that then it's the schools, just where in hell does this money really go because the roads remain in disrepair, most bridges aren't fixed and don't get me started on the education system, where so many kids come out dumber than when they went in.. If they want this money to go to where it's intended then dedicate it for that purpose and that purpose only, no legal interpretation of what particular word(s) mean, hold bidders to their bids and if their costs rise so be it,let them eat the raising costs and not the over taxed citizens. Lets say for an example a million dollars is allocated for a certain road project but the end result is that out of the that million dollars only less than half gets spent on actual roadwork, the rest is spent on equipment, materials , labor costs , all of these should have been figured into the actual bid, many of which are not,hence the term "cost over runs" or better yet "unforeseen expenses". Sometimes I think the US Government thinks that the American taxpayer is nothing more than a cornucopia of a endless stream of money.
  • Independent
    Ft.myers, FL
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    johnnycee Wrote: I am so sick of the catchword "infrastructure", here in Pa. in just the last year we have had taxes raised for the infrastructure , turnpike tolls raised, proposed extraction taxes, a new proposal for raising gas taxes at the pump, for guess what "infrastructure". if not that then it's the schools, just where in hell does this money really go because the roads remain in disrepair, most bridges aren't fixed and don't get me started on the education system, where so many kids come out dumber than when they went in.. If they want this money to go to where it's intended then dedicate it for that purpose and that purpose only, no legal interpretation of what particular word(s) mean, hold bidders to their bids and if their costs rise so be it,let them eat the raising costs and not the over taxed citizens. Lets say for an example a million dollars is allocated for a certain road project but the end result is that out of the that million dollars only less than half gets spent on actual roadwork, the rest is spent on equipment, materials , labor costs , all of these should have been figured into the actual bid, many of which are not,hence the term "cost over runs" or better yet "unforeseen expenses". Sometimes I think the US Government thinks that the American taxpayer is nothing more than a cornucopia of a endless stream of money.
    J.C. you've got the picture; "book-keeping with double pen is a national hobby; I guess the first thing they learn in this country: How can I be an expert in ripping off people. Even in our community they are experts in duplicating cost or having "fake" costs. Most of that money disappears into certain pockets for sure. Also they are very educated in covering any trace of where the money went; they are experts in it. The Pentagon is an exellent example ; "X" billion disappeared in Iraq; a plane which barely can fly cost 400 million a piece; our bombing in Iraq cost so much a day; try to verify these numbers. Success!! Sorry J.C. if you did not know that: this is an super educated country in making money disappear; they have Phd's for that.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Just to clarify any misconceptions about infrastructure. The federal government does not grant contracts for infrastructure (highways, bridges, etc.). That's what the states do. The states and counties grant the contracts based on their needs, but they do, however, rely on handouts from the federal government Highway Trust fund to partially pay for these projects. A state like Montana may receive up to maybe 60 percent of the infrastructure funding for their highway projects while at the other end of the scale, New York may receive only 15 percent.

    The money for these projects comes from gasoline taxes (federal and state) and in some cases tolls. The federal Highway Trust Fund gets it's money from an 18.4 cents per gallon tax on gasoline sales. That tax has not changed since 1993 and with inflation has not kept up with needs. Hence since 2008, Congress has shifted some $55 billion in funds from the general fund to the Highway Trust Fund to help make up the shortfall. A much easier solution would be to bump up the gasoline tax by maybe 50 cent a gallon or more, especially now with gasoline prices so low.

    Democrats in Congress have asked to raise the gasoline tax to help pay for much needed projects, but Republicans keep saying no. NO NEW TAXES! So the infrastructure needs of every state are severely curtailed. Our infrastructure is crumbling before our eyes, but Republicans in Congress so hate Obama that they will never seek a solution. If Mitt Romney or Rand Paul or any of the Republicans are elected to the Prrsidency in 2016, their first order of business will be to raise the gasoline tax and start funding infrastructure in a big way. They can't do that now because that would help the Obama presidency which they sabotage at every opportunity.

    USA Today: Federal fund goes broke, forcing states to hit brakes on road projects
  • Democrat
    Philadelphia, PA
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    I appreciate what you are saying Schmidt, but the fact remains that all of Congress is to blame, whether or not Sen. Reid would not allow certain Bills to come up for debate let alone a vote. You had the Houses playing similar games as well, both sides seemed to have forgotten what they were elected to do and that was to govern thru legislation, personal agenda's took precedent over the voters wishes. Term Limits is the answer,and that can only be achieved by the Ballot Box.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Yes Johnnycee, all of Congress does share some of the blame and also President Obama for not pushing for a gasoline tax increase. Quoting Obama: "The gas tax hasn’t been increased for 20 years. There’s a reason for that."

    The reason, of course, is that any proposals to increase the tax by either Democrats or Republicans is considered toxic. Americans hate to pay for gasoline as they watch the meter ding up the dollars while they pump the gas themselves. Add to that an increase in taxes and they hate it even more. Prior attempts to increase the tax are seen as political suicide for those proposing the increase. I point the finger more at Republicans because they are the ones on the "No New Taxes" crusade, so even when they see the need, their hands are tied by their own prior rhetoric. And that's why Obama doesn't waste political capital on raising gasoline taxes either.

    So lately it has become easier to just allocate funds a little at a time from the general fund to the Highway Trust Fund, but never enough. As a result our infrastructure keeps declining. The American Society of Civil Engineers estimates that $3.6 trillion will need to be spent by 2020 to just catch up. Now Congress might happily find those those kind of funds for war, but infrastructure...hell no.
  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    Schmidt Wrote: So lately it has become easier to just allocate funds a little at a time from the general fund to the Highway Trust Fund, but never enough. As a result our infrastructure keeps declining. The American Society of Civil Engineers estimates that $3.6 trillion will need to be spent by 2020 to just catch up. Now Congress might happily find those those kind of funds for war, but infrastructure...hell no.
    Your last sentence pretty much sums up my frustration with how our federal government spends our money. Hundreds of billions of dollars a year on weapons of war? Sure thing! No questions asked. Repairing our crumbling bridges, highways, and investing in light rail? Hell no! Make sure our children in the ghetto receive as quality an education as those in the suburbs do? Absolutely not! Who do those kids think they are? We can't afford to give them a quality education because then we wouldn't have anyone to go fight the wars we are waging.

    As you can tell--I'm rather jaded about things. So many people in this country have absolutely zero problem spending trillions on war and weapons of war, but recoil at the thought of investing on our infrastructure and education.