Owl 69/70/75 Wrote:No, Obama's plan (according to his website) is just for carbon, not for all pollutants and not for all pollutants. In typical Obamaese fashion, he states clearly at the top of the section that it applies only to carbon, then talks about "all polluters" later in the secion. Once again, he keeps things so imprecise that he's allowing himself wiggle room to do whatever if he gets elected. And that's what scares me about him.

Here is the cap-and-trade system section verbatim:

Quote:Cap and Trade: Obama supports implementation of a market-based cap-and-trade system to reduce carbon emissions by the amount scientists say is necessary: 80 percent below 1990 levels by 2050. Obama's cap-and-trade system will require all pollution credits to be auctioned. A 100 percent auction ensures that all polluters pay for every ton of emissions they release, rather than giving these emission rights away to coal and oil companies. Some of the revenue generated by auctioning allowances will be used to support the development of clean energy, to invest in energy efficiency improvements, and to address transition costs, including helping American workers affected by this economic transition.

Is it possible that the first statement was an example and the second statement is his plan? I suppose it's entirely possible that he just meant carbon dioxide and it's all just a ploy for wiggle room.

Quote:The employment credit intented to prevent or minimize the extent to which the system will have some tendency to drive enterprises (and the jobs they create) offshore. The "bigger companies are the worst polluters" and all that follows that in your post is the kind of rhetoric that fits a lot beter in a socialist rant than in a rational discussion of how to accomplish objectives. If it makes you feel good to say it, go ahead, but unless you want to drive even more jobs overseas, put the balance of trade further under water, and ultimately collapse the dollar, I think you need to be careful about how you try to apply that.

There is always the risk of losing industry overseas when you force them to do something. But to be honest, it's not like the EU has lost any industrial force by enacting a cap-and-trade system.

How is acknowledging that bigger companies are the worst polluters socialist? I'm not saying the government should take over the industries because the big, bad corporations are out to steal our livelihoods. I'm saying that big companies like GM, Halliburton, UPS, Wal-Mart, ExxonMobil, etc. are going to pollute more because they are bigger. They are international global juggernauts and are, understandably, going to pollute more than small to medium-sized businesses. They have more things to move. They have more factories. They have more things, in general. That's common sense.

Those international juggernauts are already able to purchase more of these emissions credits than small and medium-sized businesses, why should they be even further removed from this process? I'm not advocating forcing them out of the country and watching our economy collapse when we have no more industry, but they don't need to be coddled.

I'm not talking about coddling them.

Actually your argument that large companies are able to purchase more credits would argue for the employment credit, if you bother to think it through instead of just spouting rhetoric. Small business employs more people than big business, and that should be encouraged.

Your comment about the big, bad corporations out to steal our livelihoods (and I realize you are not adopting that position yourself but quoting others) highlights the fundamental difference I have with Obama. He wants to raise taxes and cut off corporate incentives (he calls them loopholes, but the difference between an incentive and a loophole is whether I'm getting it or you are), and use the proceeds to generate jobs. We have the second highest corporate tax rate in the developed world, and the US companies that are getting the loopholes and corporate welfare are needing them to stay competitive with foreign competitors from jurisdictions with lower tax rates. I believe we'd ultimately create far more jobs by lowering our corporate tax rate to a competitive number (or better yet, a number at or near the lower end of the peer range), and using that to attract private sector jobs. If we did that, we wouldn't need the loopholes and other corporate welfare items, because US companies could compete without them. Ireland dropped their corporate tax rate from 49% to 12.5% (in one fell swoop) in 2003, and now has the fastest-growing economy in Europe. I truly believe a similar change (I've suggested 15%) here would have a comparable result.

To his credit, Obama has a feature on his web site where you can make policy suggestions to him. I had a long post on one of these threads outlining some of my ideas, and I sent that to his site yesterday. I'll post if I get a response. I'm not holding my breath. I imagine they'll start hitting me up for money (since they require an address and phone and email in order to submit), but maybe they'll actually read what I sent and decide that I'm not likely to be sending them a bunch of money.

Owl 69/70/75 Wrote:

WMD Owl Wrote:Why should the US enact anything like this since China and India WON'T??

The 400 kg "gorilla polluters" are these guys. The Olympics this summer will be interesting to watch-- I bet the ChiCom censors won't allow NBC to show any footage of the smog or say anything about it.

Why? Because the system we have now is worse.
And I didn't mention, perhaps it wasn't as obvious to a casual reader as it is to me, in exchange for implementing this system we get rid of a lot of what we do now.

A second reason. Because a lot of the nations that we would like as trading partners are doing something similar, and to keep our trade ties we may need to do something similar. And we want to keep those trade ties. We just want a tax and regulatory scheme that facilitates our role in those trade partnerships including more exports than now.

As it stands today the ChiComs do not respect ANY Intellectual Property laws and counterfit/bootleg/infringe/duplicate tons of music, video, patents/copyrights and nations in the EU/US/Berne Convention can't do a thing about it...

Why do you expect they would abide by any international environmental laws?

perunapower Wrote:

Quote:Cap and Trade: Obama supports implementation of a market-based cap-and-trade system to reduce carbon emissions by the amount scientists say is necessary: 80 percent below 1990 levels by 2050. Obama's cap-and-trade system will require all pollution credits to be auctioned. A 100 percent auction ensures that all polluters pay for every ton of emissions they release, rather than giving these emission rights away to coal and oil companies. Some of the revenue generated by auctioning allowances will be used to support the development of clean energy, to invest in energy efficiency improvements, and to address transition costs, including helping American workers affected by this economic transition.

Is it possible that the first statement was an example and the second statement is his plan? I suppose it's entirely possible that he just meant carbon dioxide and it's all just a ploy for wiggle room.

I think EVERYTHING Obama does is a ploy for wiggle room. That's one reason (of several) why I don't trust him enough to vote for him.

I don't think he's talking about anything but carbon because he has never mentioned anything more comprehensive in anything I've seen or heard from him or his camp. That's not just him, nobody is so far as I know; they all seem content to go with the current permitting model (which incorporates all sorts of draconian powers that are seldom if ever used and so nothing really gets done). I think the switch to "pollution" and "polluters" in the rest of the paragraph is just good old liberal demoagoguery. If he phrased it, "We're going to tax your employer for pollution, and he just might decide to cut your job to save money to pay the taxes, or move to India so he won't have to pay them at all," I doubt it would have the same curb appeal.

Kind of like "tax the rich." Get a clue. You aren't going to tax the rich. Other than increasing the capital gains tax (which will put us further behind in attracting investment and creating private sector jobs) Obama's proposed increases won't really hit the rich. They live off their investments. Who will be hit by the Obama tax increases (okay, call them the termination of the Bush tax cuts) are the people who are upwardly mobile, the people who are actually realizing the American Dream. But I'll bet that "tax the rich" gets you a lot more votes than "tax the upwardly mobile" or "tax the people who are making it" or "tax the people who are living the American dream." By the way, if you tax the rich too much, they can take their money (and their investment, and the jobs that investment creates) overseas. That's already happening now.

As far as the Bush tax cuts. The one thing that I definitely think could be reversed is the reduction in the top marginal rate for personal income taxes. I think it would have been far better to have actually fixed the "marriage penalty" instead of the half-@$$ approach which they took there. I can assure you that if I were making millions, the fact that I was paying 39% instead of 35% on the marginal income really wouldn't matter to me, nor would it affect my economic decisions.

The capital gains tax is another matter, as it does affect investment decisions. And like the corporate income tax, we actually tax capital gains more than a number of our peers among developed countires, several of which do not tax capital gains at all, and several others of which combine dividends and capital gains in a separate category that receives a much lower tax rate than earned income. Just like we are competing with those countries for factories and the jobs they create, we are competing with them for investment and the jobs it creates. Shooting ouselves in the foot tax-wise is not an intelligent strategy.

As for the estate/inheritance/death tax (depending on your political persuasion), most of the damage is already done. It probably did more to cause the replacement of family farms (who had to sell out to pay the estate taxes) with large agribusinesses than any other single factor. I know first hand, it happened to us. Same thing for small family businesses. The reason Warren Buffett opposes cutting the inheritance tax is that Berkshire Hathaway has made a fortune buying family businesses for 50 cents on the dollar because the family had no other way to raise the cash to pay the estate taxes. I would exclude fully from inheritance taxes the value of any family farm or business that family members continue to operate for some period (say, 5 years); if they sell before them, the proceeds become part of the taxable esate. I would allow a significant exclusion (say, $1 mil) on investments in job-creating businesses, since those investments support the jobs I want to create, and a smaller deductible on non-productive assets, and tax the rest.

WMD Owl Wrote:

Owl 69/70/75 Wrote:

WMD Owl Wrote:Why should the US enact anything like this since China and India WON'T??

The 400 kg "gorilla polluters" are these guys. The Olympics this summer will be interesting to watch-- I bet the ChiCom censors won't allow NBC to show any footage of the smog or say anything about it.

Why? Because the system we have now is worse.
And I didn't mention, perhaps it wasn't as obvious to a casual reader as it is to me, in exchange for implementing this system we get rid of a lot of what we do now.

A second reason. Because a lot of the nations that we would like as trading partners are doing something similar, and to keep our trade ties we may need to do something similar. And we want to keep those trade ties. We just want a tax and regulatory scheme that facilitates our role in those trade partnerships including more exports than now.

As it stands today the ChiComs do not respect ANY Intellectual Property laws and counterfit/bootleg/infringe/duplicate tons of music, video, patents/copyrights and nations in the EU/US/Berne Convention can't do a thing about it...

Why do you expect they would abide by any international environmental laws?

I said a lot of the nations, not every one, with which we have trading relationships. The ChiComs are definitely NOT one of those nations.

Of course, they now hold so much of our debt that they could crater the dollar, and with it our economy, any time they decide it's worth taking the beating they'd incur by dumping that debt.

One thing about that debt, and it's a bit of a problem with some of Obama's discussion. The federal budget deficit is a reason, but hardly the only reason, and not even the main reason, why we are so far in debt. Our balance of trade deficit is twice as big as our federal budget deficit, and that has to be debt financed as well. If we balance the federal budget but stay $800 billion upside down on the trade balance, we'll just keep sliding deeper and deeper into debt.

Owl 69/70/75 Wrote:I'm not talking about coddling them.

Actually your argument that large companies are able to purchase more credits would argue for the employment credit, if you bother to think it through instead of just spouting rhetoric. Small business employs more people than big business, and that should be encouraged.

Wow, you got defensive quickly. I'm not spouting "rhetoric", as you call it. I just don't think a company should get a reprieve based solely on their number of employees. It overcomplicates the system, in my opinion. I'm entitled to my opinion, just like you are your's.

Quote:Your comment about the big, bad corporations out to steal our livelihoods (and I realize you are not adopting that position yourself but quoting others) highlights the fundamental difference I have with Obama. He wants to raise taxes and cut off corporate incentives (he calls them loopholes, but the difference between an incentive and a loophole is whether I'm getting it or you are), and use the proceeds to generate jobs. We have the second highest corporate tax rate in the developed world, and the US companies that are getting the loopholes and corporate welfare are needing them to stay competitive with foreign competitors from jurisdictions with lower tax rates. I believe we'd ultimately create far more jobs by lowering our corporate tax rate to a competitive number (or better yet, a number at or near the lower end of the peer range), and using that to attract private sector jobs. If we did that, we wouldn't need the loopholes and other corporate welfare items, because US companies could compete without them. Ireland dropped their corporate tax rate from 49% to 12.5% (in one fell swoop) in 2003, and now has the fastest-growing economy in Europe. I truly believe a similar change (I've suggested 15%) here would have a comparable result.

A loophole is defined as a means of escape or evasion; a means or opportunity of evading a rule, law, etc. (according to dictionary.com). An incentive is defined as something that incites or tends to incite to action or greater effort, as a reward offered for increased productivity. (also according to dictionary.com). These words are hardly synonyms, nor are they dependent on the recipient. A loophole is used by a party to evade something by playing with legalese and twisting legal intent. An incentive is created to entice an action.

If the corporate tax is lowered by ~20%, how is the government going to make up the deficit we have? You use Ireland as an example of lowering corporate taxes, but did you look up the individual income taxes for Ireland? In the US the most you can pay in income taxes is 35% (for a single with no deductions) if you make over $357,700 a year. In Ireland, you pay 41% if you make more than 34,000 euro (which is about $52,800).

To be honest, this is a highly complex problem that needs moderation. We are trillions of dollars in debt, we have a slowly evaporating middle class that is only being strained by a weak dollar and high oil prices, and we have an uneasy market worried about the credit, housing, and banking markets. Cutting corporate taxes by 20% only to tax the crap out of the middle class isn't exactly going to stimulate the economy like you say. It would eliminate consumer spending, crippling sectors of the economy causing probably hundreds of businesses to fail, particularly the ones involved with luxuries and amenities.

Quote:To his credit, Obama has a feature on his web site where you can make policy suggestions to him. I had a long post on one of these threads outlining some of my ideas, and I sent that to his site yesterday. I'll post if I get a response. I'm not holding my breath. I imagine they'll start hitting me up for money (since they require an address and phone and email in order to submit), but maybe they'll actually read what I sent and decide that I'm not likely to be sending them a bunch of money.

I'm glad he has that feature. I hope he wisely uses it and it isn't some ploy to gain confidence. I'm glad you used it. I hope a lot of people who have ideas use it. Perhaps it'll spawn a great solution to one of the looming problems we have.

Not defensive, frustrated would be a better word. Let's make a deal, let's keep this on the issues, I won't make personal comments about you and you don't do it about me.

Do you understand the point I was making that by allowing some pollution credits to be earned by employing people, instead of just selling the right to pollute, you actually give small businesses that can't just throw money at the problem a break? Do you also understand that I'm talking about a much broader based cap-and-trade approach that would include all discharges currently regarded as pollutants? I think the market would do a much better job of reducing pollution than a regulatory system that ends up in seemingly endless court challenges to every proposal.

Your dictionary definitions are technically correct, but that isn't how the terms get used. It actual usage, I repeat, it's an "incentive" if I'm gettting it, and a "loophole" if you're getting it, and if we have more "loopholes" than "incentives," then it's not "fair." Actually, the vast majority of what are now being called "loopholes" were enacted as incentives, and most still function that way. Take for example the tax deductions unique to the oil and gas industry. These were intially enacted because of a policy decision to keep energy relatively cheap in the US (to stimulate the economy). As long as every company in an industry is eligible for the same tax breaks, competition forces those tax benefits to be passed along to the consumer. Even at today's prices we still pay only half as much for a gallon of gasoline as Western Europe, and that difference is essentially attributable entirely to the difference in taxes. The cheap energy fueled significant growth in our economy, but those chickens are coming home to roost now. We can solve the energy problem, but the solutions aren't cheap, and certainly are going to require us to pay more in the future. Understand this, any attempt to roll back the tax breaks enjoyed by US oil companies cannot possibly have any result other than to raise the price at the pump further and to decrease the supply volume. Bear in mind, I don't think raising the price is necessarily a bad thing, just not politically attractive. I'm guessing that the market will start to bring real alternatives online about the time the price of gasoline hits $5/gallon.

What has happened in a number of cases is that we've got industries that can't compete worldwide because we've laid a higher tax burden on them than, say, France has on competing French companies. So we enact tax incentives or trade protections or other financial incentives to close the gap and make them competitive. The good news is that in most cases, if we reduced the tax burden to a level that didn't penalize US companies, we wouldn't need the incentives and we could kill a big bunch of corporate welfare.

Keep in mind that corporations don't pay corporate income taxes, they collect them from their customers and pass them on to the government. They treat taxes as a cost to be recoverd from sales, and adjust their prices to include them. As long as it's a cost to every competitor, they will all do that. So Starbuck's doesn't pay corporate taxes, you and I do when we shop there.

A true "loophole" is the kind of provision that favors one player in an industry but not all of them, such as a provision that "chicken farmers in Dubuque County, Iowa, get a 25% tax credit for all purchases of feed grown locally in the county." There are provisions in the Internal Revenue Code like that, believe me. Those are a form of pork. They benefit chicken farmers and chicken feed growers in Dubuque County, Iowa--and nobody else. They generate true windfall profits for the recipients; since their competitors don't get that cost break, they can't drop their prices, so the chicken farmers work out some deal with the chicken feed growers in Dubuque County, Iowa, and they simply put a bunch of extra money in their pockets. I am totally opposed to this sort of provision; I don't think the government should be in the business of picking favorites, which is one big reason why I tend to favor market solutions over government solutions.

As for making up the lost revenues. First, the corporate income tax, in total, is only 15% of total federal revenues. We could come very close to making up for a total loss of that revenue stream just by getting rid of a bunch of stuff we are paying for but it does no good. There's about $300 billion in spending for things we don't need (some military, some domestic) that if we cut that out we wouldn't need the corporate tax at all. In the integrated tax proposal outlined below, the decrease in rates would be partially offset by expanding the tax base to include other non-corporate forms of business.

Actually, I'm tending toward something that Europe is going to, particularly the former Iron Curtain countries who have brought in high-powered economic teams to help them develop a tax system that will foster growth. Basically three big tax sources--a payroll tax that works sort of like our social security with no upper income limit, a business tax that includes corporatations and other business forms (partnerships, etc.), and a consumption-based tax like a value added tax (VAT). Note that this approach eliminates the individual income tax. One rate, across the board, on all three. Because of the vastly expanded base, the rate should be substantially lower than we are now paying. At our current budget, that rate would be 15% (the payroll tax would be 7.5% employer and 7.5% employee), if we include a prefund provision on the VAT to rebate the amount of taxes that would be paid by a taxpayer whose income was at the poverty line and who spent 100% on consumption. The prefund plus a minimum-wage job would be sufficient to keep a single person above the poverty line; the family prefund plus two minimum wage jobs would do it for a family of four.

The real benefit of the consumption tax is that for export sales, GATT allows consumption based taxes to be refunded, but not a pro rata share of income taxes. This means that under the current tax structure, if a US company is competing with a French company for a sale in Brazil, the French company starts out with a built in 15% tax advantage. Think that might affect our balance of trade a little bit?

There's a big fallacy in analyzing tax policy, and that is the assumption that things are going to stay the same when taxes change, so that the revenue impact can be measured simply by multiplying the change in tax rate times the current tax base. But when tax rates change, it affects the size of the tax base. Raising taxes inevitably causes some portion of the economy to reduce taxable activities; lowering taxes has the opposite effect.

perunapower Wrote:To be honest, this is a highly complex problem that needs moderation. We are trillions of dollars in debt, we have a slowly evaporating middle class that is only being strained by a weak dollar and high oil prices, and we have an uneasy market worried about the credit, housing, and banking markets. Cutting corporate taxes by 20% only to tax the crap out of the middle class isn't exactly going to stimulate the economy like you say. It would eliminate consumer spending, crippling sectors of the economy causing probably hundreds of businesses to fail, particularly the ones involved with luxuries and amenities.

The only reason that it's a "highly complex" problem is that lawmakers want to obscure what they are really doing and IRS bureaucrats and tax practitioners like the job security that comes from having a tax code that nobody but them understands. It's really a pretty simple proposition--if you want more of something you subsidize it, if you want less of something you tax it. A free market is based on millions of individual decisions every day, and all you need to effect change is enough of a stimulus, one way or the other, to modify a few of those decisions every day. Right now we have a $400 billion a year tax shelter industry. With a simpler tax code, those resources would be redeployed in more productive ways.

The reason Ireland's personal tax rates are so high is the cost of their socialist welfare state. If Obama is elected and succeeds in enacting his proposed tax-and-spend program, we'll be well on our way there. I'm actually in favor of a fairly comprehensive safety net, certainly more comprehensive than the republicans and maybe even more than the democrats. I would base medical coverage on the French plan--insurance-based, not single-payor, with a free-market opt-out to avoid the kinds of problems Canadians face, with 100% coverage at a lower cost to the government (per capita or as a % of GDP) than what we pay for Medicare. I would make the consumption tax prefund (the logical successor to Milton Friedman's negative income tax) the primary welfare payment, meaning that anyone who could get a minimum wage job would be above the poverty level. I would convert social security along the lines of Sweden's plan, combining a tax-funded defined-benefits plan with a defined-contribution individual investment plan.

Why do I think this will work when I don't believe Obama's will? Because he's adding his onto existing programs where I'm proposing to pay for a big hunk of mine by scrapping worthless existing programs, including almost all of LBJ's War on Poverty (which has worked about as well to eliminate poverty as the War on Drugs has worked to eliminate drugs). If the French can provide health coverage to all Frenchmen for less than we can provide Medicare and Medicaid to some fraction of Americans, we should be able to as well. There is literally that much inefficiency in federal welfare programs across the board, most of which spend as much or more on administration (and "means-testing") as actually goes out in benefits. The democrats count too heavily on getting the votes of 90% of the welfare bureaucracy, the republicans are too philosophically wedded to the concept of means-testing everthing (which often ends up costing more than just making the benefit universal), and both parties like having a big inventory of sinecure positions to reward their loyal foot-soldiers. But we taxpayers are paying hundreds of billions each year for people and programs that do nothing.

Your comment about sticking it to the middle class to cover corporate tax decreases ignores a basic but little-understood (because politicians don't want it understood) fact. Corporations don't pay corporate taxes; instead, they collect them from their customers in the form of higher prices and pass them on to the government. Who are most of the customers who pay there hidden taxes? The middle class. I would propose that the most regressive tax of all is our cliff-vesting means-tested welfare system (if you make $1000 in income you lose $1000 of benefits, a 100% effective tax rate), the second most regressive is FICA because of the earnings cap, and the third most regressive is thethe corporate income tax.

Consider the following hypothetical: Suppose you run a corporation, you make $100 million in pre-tax profit, and your tax rate is 33%, so you pay $33 million in taxes and have $67 million net income. Suppose the tax rate is increased to 50%, so you would now pay $50 million in tax and keep $50 million, right? Wrong. Assuming all your competitors get the same tax increase, you increase your price to get pre-tax income up to $134 million, pay $67 million in taxes, and have the same $67 million at the end of the day. You're in the same place, the government is $34 million richer, and your customers (primarily from the middle class) are $34 million worse off. So your customers paid the tax increase, you just collected it and passed it on.

What if some, but not all, of your competitors get the same tax increase as you do? The ones who don't get the tax increase have some options. They can raise prices to the same level as you, and pocket the increased revenues. They can keep prices at the old level, take away your market share, and ultimately drive you out of business. You say that's unfair, you have a friend who is an influential senator, and you get some corporate welfare provision enacted to make you competitive again. This is how loopholes proliferate.

What if you are in a worldwide industry, and you and your competitors who got the tax increase are in the US? The foreign companies did not. You are now less competitive, and will lose market share and profits. The same thing will happen to you fellow US-based competitors, and the US economy will suffer. The foreign competitors will be more profitable, they will grow, and their countries' economies will grow. You'll scream that they are getting an unfair advantage, and your senator friend will get the government to enact trade and tariff barriers against them. They'll complain under GATT, and the US trade barriers will be ruled illegal. And the rest of the world will hate us a little more than they did yesterday.

69/70... as you know, you and I agree on much of this... so I won't repeat/augment/whatever your analysis... it is absolutely complete enough for these purposes... sure, we can nit-pick some details... but its the right direction... I'm going to talk more in platitudes (maybe I should run for office)

Here is the problem in a nutshell...

Our current system of taxation does NOT "tax the rich" as we all think (and are told) it does. The "rich" are wealthy individuals/families who do not live on "earnings" as described by our tax code, and thus don't pay much in "income" tax, and corporations who pass their tax structure onto the consumers of their products. In theory, things like the estate tax and other things are supposed to fill this gap, but corporations have no death, and neither do the investment trusts that wealthy individuals create. Both of these entities also employ lawyers and accountants (as a deductible expense to whatever ACTUAL income they generate) to ensure that they have whatever benefit they can get. To use Peruna's loophole comparison... they step through these "generally" unintended gaps (loopholes)... some of which become institutionalized if they have a beneficial result, like encouraging employment... even if we are only employing lawyers and accountants.

On the other end of the spectrum are the poor. Of course, we don't want to tax them (if we can help it) but instead we provide incentives for them. In fact, in many ways... mostly because of our threshold method of implimentation... at $7,999... you get $2,000 in incentives. At $8,000... you get nothing.... and at $11,000 you actually owe $1,000 in taxes (not real numbers... but you get the gist) So, if you are making $7,999 and can't make $12,000... You're better off finding a "loophole" (lets not act as if only the RICH find loopholes) so that you don't have to report more than $7,999... OR you just don't work any harder. Not exactly the goal of the legislation.

SO... we have the Middle class... which only SOME of the poor... meaning those who are poor by circumstance, and have the physical and or mental capabilities AND TIME to not only make $12,000... but $50,000... hope to become... AND those who paid tens or hundreds of thousands on an education HOPING one day to become RICH... but who can't afford to run their own business... or hire attorneys/cpas to take advantage of the opportunities afforded to that group.

We tax success... we discourage raising your position. Sure, If you're making $20mm/year, you may not care if you're paying $4 or $5mm in taxes... but if someone tells you you can spend $500,000 to keep an extra $1mm... what are you going to do?? If someone tells you that you have to work 30% harder just to make up for the loss in benefits that result from earning more... what are you going to do??

Our funding problems are systemic... and until we CHANGE THE SYSTEM... we will have these problems. Scrap the tax code and start from scratch. Even if we stay with an income tax, the current system, or any "adjustment" to it is a mistake. How do you design a great car?? You DON'T start with another car... especially not one that doesn't run very well. Reminds me of a line from Funny Farm... "If I was trying to get to Red Bud... I sure wouldn't start from here"

As to Obama and the preachers... What I am hearing from these guys would be described as hate speech if it reversed.... and no, it doesn't matter than the one preacher is white. Bill Cosby (among others) is frequently vilified for saying some thing that sounds like it came from an anglo. The PROBLEM is that Obama has been listening to this for decades. He may not believe it entirely... he may not have paid close attention... but you can't hear that sort of speech for that long and NOT have it impact you... and he claims in his books that the Reverend helped shape his thoughts. Only now, when people point it out, does he seem to realize how divisive these particular comments are. How convenient. His wife's comment about FINALLY being proud to be an American (or whatever it was) is the sort of opinion /feeling that is shaped by angry rhetoric like we've read. That doesn't make her a bad person... or a racist... or anything else... it just means that she's been shaped by her surroundings, as we all have been.

EDIT: Sorry... I typed this before you put in your last notes, but sent it afterwards... sorry.

THE NC Herd Fan Wrote:

ETSUfan1 Wrote:Here we go again. Instead of telling us why to vote for your candidate of choice, its bash the other guy. Borrrrriiiinnngg.

And I'm with GTS. Why are the issues not being discussed? Is America really more interested in preachers, than political policy? If so, that is SAD.

First "Father" Pfleger's background and Obama's relationship with him.

Quote:Who is Michael Pfleger? As we noted last month, he is a strong supporter of Louis Farrakhan and has been described as a "spiritual adviser" to Obama. He also publicly threatened the life of a Chicago businessman and, according to one report, "is known for climbing ladders to deface liquor billboards."

Quote: Mr. Obama more eagerly met the demands for spending earmarks for churches and community groups in his district, said State Senator Donne E. Trotter, then the ranking Democrat on the Senate Appropriations Committee. "I know this firsthand, because the community groups in his district stopped coming to me," Mr. Trotter said.

Typical of Mr. Obama's earmarks was a $100,000 grant for a youth center at a Catholic church run by the Rev. Michael Pfleger, a controversial priest who was one of the few South Side clergymen to back Mr. Obama against [Rep. Bobby] Rush.

Pfleger has also acted in an "Advisory" capacity to the Obama campaign on spiritual matters.

Ok why this you ask?!? Who a person associates with directly goes to their own character and the judgment they would using in choosing Cabinet members, Joint Chief of Staff, SUPREME COURT NOMINEES!!!

Potential Obama Cabinet members:

UN Ambassador



Secretary of State



CIA Director



/sarcasm

I don't really think these individuals will get appointments.... Hopefully, but people with similar values and ideologies WILL!

So this post still shows a reason NOT to vote for Obama. Put in the MOST simple terms, Obama will appoint wacko extremists to many posts, thus leading America in the WRONG direction!!!

Here is McCains Supreme Court Justice.

http://www.strk3.com/webimages/republican_jesus2.jpg

First, I am a tax practitioner whose job it is to try and comprehend a code that no one understands. I'll be the first to tell you that many tax practitioners would love to see a simplification, but unfortunately that is virtually impossible when you have to do things like differentiate between capital gains and ordinary income with differing rates. I like the VAT for reasons that it helps put us on even footing with our Euro partners because they don't all tax capital. But taxing consumption is very definitely regressive. However, it would reach the underground economy and all of the illegal aliens would have to start paying their fair share everytime the walk into a 7-11 to buy a six pack. Any mixture of VAT with income and/or capital gains taxes would likewise be met with more complexity. A VAT is very complex and anyone who has read any state sales tax statute as I have can attest to the fact that they are not lacking in complexity either. It sounds easy, but its not. Also, there are folks who cheat the sales tax collection system as well. Then you get into the areas of corporate taxes, individual taxes, trust taxes, estate taxes, gift taxes, extraction taxes, real estate taxes, and there are just layers of complexity there. Here's my solution. The Federal budget is what, $3 Trillion. There are about 300 million people. That totals $10,000 per person (including children). I'm exempt and everyone else pays my $20,000.

EastStang Wrote:First, I am a tax practitioner whose job it is to try and comprehend a code that no one understands. I'll be the first to tell you that many tax practitioners would love to see a simplification, but unfortunately that is virtually impossible when you have to do things like differentiate between capital gains and ordinary income with differing rates. I like the VAT for reasons that it helps put us on even footing with our Euro partners because they don't all tax capital. But taxing consumption is very definitely regressive. However, it would reach the underground economy and all of the illegal aliens would have to start paying their fair share everytime the walk into a 7-11 to buy a six pack. Any mixture of VAT with income and/or capital gains taxes would likewise be met with more complexity. A VAT is very complex and anyone who has read any state sales tax statute as I have can attest to the fact that they are not lacking in complexity either. It sounds easy, but its not. Also, there are folks who cheat the sales tax collection system as well. Then you get into the areas of corporate taxes, individual taxes, trust taxes, estate taxes, gift taxes, extraction taxes, real estate taxes, and there are just layers of complexity there. Here's my solution. The Federal budget is what, $3 Trillion. There are about 300 million people. That totals $10,000 per person (including children). I'm exempt and everyone else pays my $20,000.

The real problem exists with a Federal budget of 3 trillion. Does anyone really feel that their hard earned wages are being spent in a frugal and responsible manner? Taxation is theft. You would not to your neighbors house and steal from him. Why is OK to steal from his paycheck?

As long as the government thugs can take our money...we are powerless against them. The institution of withholding has allowed this "beast" of a government to continue to grow and grow.
It is impossible to starve the beast through tax revolt, unless you wish to rot in a govt. gulag. The only hope we as citizens would be to slash the budget...and we all know full well that NEITHER political party will accomplish this since....THEY NEVER HAVE.

Owl 69/70/75 Wrote:The only reason that it's a "highly complex" problem is that lawmakers want to obscure what they are really doing and IRS bureaucrats and tax practitioners like the job security that comes from having a tax code that nobody but them understands. It's really a pretty simple proposition--if you want more of something you subsidize it, if you want less of something you tax it. A free market is based on millions of individual decisions every day, and all you need to effect change is enough of a stimulus, one way or the other, to modify a few of those decisions every day. Right now we have a $400 billion a year tax shelter industry. With a simpler tax code, those resources would be redeployed in more productive ways.

I'm all for simpler taxes. It's not as clean-cut as you make it sound, but closing loopholes that many exploit should be welcomed.

Quote:The reason Ireland's personal tax rates are so high is the cost of their socialist welfare state. If Obama is elected and succeeds in enacting his proposed tax-and-spend program, we'll be well on our way there. I'm actually in favor of a fairly comprehensive safety net, certainly more comprehensive than the republicans and maybe even more than the democrats. I would base medical coverage on the French plan--insurance-based, not single-payor, with a free-market opt-out to avoid the kinds of problems Canadians face, with 100% coverage at a lower cost to the government (per capita or as a % of GDP) than what we pay for Medicare. I would make the consumption tax prefund (the logical successor to Milton Friedman's negative income tax) the primary welfare payment, meaning that anyone who could get a minimum wage job would be above the poverty level. I would convert social security along the lines of Sweden's plan, combining a tax-funded defined-benefits plan with a defined-contribution individual investment plan.

So far I'm agreeing with you. I like the French health care system (WHO even named it the best in the world). The Swedish social security system is good too.

Quote:But we taxpayers are paying hundreds of billions each year for people and programs that do nothing.

I agree and this needs to be addressed in a big way.

Quote:What if some, but not all, of your competitors get the same tax increase as you do? The ones who don't get the tax increase have some options. They can raise prices to the same level as you, and pocket the increased revenues. They can keep prices at the old level, take away your market share, and ultimately drive you out of business. You say that's unfair, you have a friend who is an influential senator, and you get some corporate welfare provision enacted to make you competitive again. This is how loopholes proliferate.

That's not loopholes, that's lobbying. Most of the time, loopholes are not intentionally placed in the law for exploitation. Loopholes are unforeseen interpretations and creative reading practices.

RobertN Wrote:

THE NC Herd Fan Wrote:

ETSUfan1 Wrote:Here we go again. Instead of telling us why to vote for your candidate of choice, its bash the other guy. Borrrrriiiinnngg.

And I'm with GTS. Why are the issues not being discussed? Is America really more interested in preachers, than political policy? If so, that is SAD.

First "Father" Pfleger's background and Obama's relationship with him.

Quote:Who is Michael Pfleger? As we noted last month, he is a strong supporter of Louis Farrakhan and has been described as a "spiritual adviser" to Obama. He also publicly threatened the life of a Chicago businessman and, according to one report, "is known for climbing ladders to deface liquor billboards."

Quote: Mr. Obama more eagerly met the demands for spending earmarks for churches and community groups in his district, said State Senator Donne E. Trotter, then the ranking Democrat on the Senate Appropriations Committee. "I know this firsthand, because the community groups in his district stopped coming to me," Mr. Trotter said.

Typical of Mr. Obama's earmarks was a $100,000 grant for a youth center at a Catholic church run by the Rev. Michael Pfleger, a controversial priest who was one of the few South Side clergymen to back Mr. Obama against [Rep. Bobby] Rush.

Pfleger has also acted in an "Advisory" capacity to the Obama campaign on spiritual matters.

Ok why this you ask?!? Who a person associates with directly goes to their own character and the judgment they would using in choosing Cabinet members, Joint Chief of Staff, SUPREME COURT NOMINEES!!!

Potential Obama Cabinet members:

UN Ambassador



Secretary of State



CIA Director



/sarcasm

I don't really think these individuals will get appointments.... Hopefully, but people with similar values and ideologies WILL!

So this post still shows a reason NOT to vote for Obama. Put in the MOST simple terms, Obama will appoint wacko extremists to many posts, thus leading America in the WRONG direction!!!

Here is McCains Supreme Court Justice.

http://www.strk3.com/webimages/republican_jesus2.jpg

I guess I'm being thick here, but since when has McCain leaned in that direction. Conservative and Christian are two different things I don't think McCain will consider the latter when choosing the next supreme court nominee. You'll have to do better than that to paint McCain as a right winger. We already know Obama is Left the question, Is he Socialist left and I think the answer is yes.

perunapower Wrote:I'm all for simpler taxes. It's not as clean-cut as you make it sound, but closing loopholes that many exploit should be welcomed.

So far I'm agreeing with you. I like the French health care system (WHO even named it the best in the world). The Swedish social security system is good too.

That's not loopholes, that's lobbying. Most of the time, loopholes are not intentionally placed in the law for exploitation. Loopholes are unforeseen interpretations and creative reading practices.

Actually I think it is that simple, or at least it could be, but I'm not sure it ever will be in our "something for nothing" political climate.

I've actually experienced the French health care system as a consumer (actually it was my mom who had her hip replaced but I was there with her). It was as good as advertised.

Do you have any examples of "loopholes not intentionally place in the law for exploitation"? The loopholes that I know anything about were pretty much all placed there intentionally, usually as the result of intense lobbying. If someone is smart enough to take advantage of unforeseen interpretations and creative tax planning, I'm not sure that's someone we should be attacking. By the way, have you seen anything about the trend in intellectual property to allow tax planning ideas to be patented? If you come up with a new tax planning approach, anyone else who used it would have to pay you a royalty. I'm not sure that's the kind of things that the forefathers envisioned when they put the IP provisions into the Constitution.

I noted one post on here from someone who described himself as a tax practitioner. Just wondering, of those posting on this thread, how many are
a. Tax practitioners
b. Accountants
c. Lawyers
d. Economics or finance majors

Owl 69/70/75 Wrote:Do you have any examples of "loopholes not intentionally place in the law for exploitation"? The loopholes that I know anything about were pretty much all placed there intentionally, usually as the result of intense lobbying. If someone is smart enough to take advantage of unforeseen interpretations and creative tax planning, I'm not sure that's someone we should be attacking.

I'm really starting to wonder if you know what the word "loophole" means. I thought we hashed this out already. A loophole is a weakness in a law or security that is circumvented without actually breaking the letter of the law. For instance, a Wal-Mart in Calvert County, Maryland wanted to build a store within the county, but the county limited the size of retail buildings to 75,000 sq.ft. To circumvent this law, Wal-Mart planned to build two smaller buildings side-by-side. Though Wal-Mart later pulled the plan because of the enormous uproar from the community, it still perfectly exemplifies the exploitation of a legal loophole.

Quote:By the way, have you seen anything about the trend in intellectual property to allow tax planning ideas to be patented? If you come up with a new tax planning approach, anyone else who used it would have to pay you a royalty. I'm not sure that's the kind of things that the forefathers envisioned when they put the IP provisions into the Constitution.

I have not heard of that. That's strange. What primary right would that be? Trade secret?

The difference between us is that you are giving the dictionary definition and I am talking about how demagogue politicians use it. Do you seriously believe that when Mr. Obama talks about closing tax loopholes to increase government income, he's referring to the number of square feet in a building in Calvert County, Maryland (or anywhere else, for that matter)?

Of course, when Mr. Obama talks about closing "loopholes" he never talks much about the fact that some of the biggest subsidies going involve corn-based ethanol, and as a senator from a corn-producing state, he has been heavily involved in implementing and keeping those "incentives". I don't think that's all bad--ethanol can be a useful alternative, and he was elected to represent the interests of his constituents. But there are some real problems. Corn is an extremely inefficient source of ethanol. Sugar cane, for example, is four times more efficient (think of getting 2 barrels of ethanol for each barrel of oil used to make corn ethanol, but 8 barrels of ethanol for each barrel of oil used to make sugar cane ethanol, that's not tecnically 100% correct, but it is close enough to be a useful visualization). A number of other plants (like sugar beets) are more efficient than corn (but less efficient than sugar cane) as sources for ethanol.

That inefficiency leads to harmful consequences, like you need more acres to grow more corn, so you clear forests that themselves would have a CO2 reduction effect. We're actually at the point where some observers believe that corn-based ethanol may do more harm than good to the environment. What are the incentives/loopholes:
1. We have a federally-funded cash subsidy for corn ethanol production (this made sense when gasoline was $1.60 a gallon, it is unnecessary and makes no sense when gasoline is $4).
2. We have mandated minimum content of ethanol in gasoline (but we could go much higher, Brazilian gasoline is about 24-26% ethanol--there is less energy per gallon of ethanol, but this is the range where the harmful effects of that seem to be minimized--and with the use of E-85 Brazil's overall gasoline conusmption is about 44% ethanol)
3. We have a huge tariff on imported ethanol (primarily from sugar cane) to keep it out (in true Rube Goldberg fashion, what little Brazilian ethanol we get is actually made in Brazil, then dehydrated to powder, which is shipped to Trinidad, where it is reconstituted by adding WATER, brought to the US, and therefore escapes the ethanol tariff because Trinidad is a signatory to the Caribbean Basin Initiative that reduces trade barriers among signatory states)
4. Amazingly, having shut sugar cane out of the ethanol process, we also have a price support for sugar (which would obviously be totally unnecessary if the demand for sugar also included an ethanol component).

So what we have here is a collection of "subsidies" that are being used as loopholes to line the pockets of some corn farmers and large agri-businesses. The losers seem to be US consumers (higher prices), the environment (use of corn vs. more efficient sources), our foreign relations with countries that could help solve our problem (the ethanol tariff is second to the war on terror in chilling our relations with Brazil, for example). Why? Because a number of midwest senators--Harkin, Grassley, Obama, Lugar, Bayh, Hegel (notice both sides of the aisle represented there)--have used their influence to make it so.

So when Obama talks about closing loopholes, it's the classic case of what I said earlier--if I (or my constituents) get the benefit, it's a subsidy, if you get it, it's a loophole.

Owl 69/70/75 Wrote:The difference between us is that you are giving the dictionary definition and I am talking about how demagogue politicians use it. Do you seriously believe that when Mr. Obama talks about closing tax loopholes to increase government income, he's referring to the number of square feet in a building in Calvert County, Maryland (or anywhere else, for that matter)?

No, of course he's not talking about square footage of a Wal-Mart, it's much broader than that. If this is the intelligent discussion, like I think it is, then we should distance ourselves from incorrect demagoguery. Embracing a new definition just because it is implied by a politician isn't smart.

When Obama talks about closing tax loopholes to increase government income, he's talking about rooting out the exploitation of the weaknesses within the tax code, in my opinion. Believe it or not, some people get paid to find new ways to deduct and either decrease their clients' taxes or increase their clients' returns.

Quote:3. We have a huge tariff on imported ethanol (primarily from sugar cane) to keep it out (in true Rube Goldberg fashion, what little Brazilian ethanol we get is actually made in Brazil, then dehydrated to powder, which is shipped to Trinidad, where it is reconstituted by adding WATER, brought to the US, and therefore escapes the ethanol tariff because Trinidad is a signatory to the Caribbean Basin Initiative that reduces trade barriers among signatory states)

This is a loophole, by the way. Though, I don't think this should be closed, instead it should be removed by ridding ourselves of the moronic ethanol tariff. Either we grow sugar cane to make ethanol or we buy it from Brazil the less expensive way until there is a better way to create ethanol from corn by-products.

Quote:So what we have here is a collection of "subsidies" that are being used as loopholes to line the pockets of some corn farmers and large agri-businesses. The losers seem to be US consumers (higher prices), the environment (use of corn vs. more efficient sources), our foreign relations with countries that could help solve our problem (the ethanol tariff is second to the war on terror in chilling our relations with Brazil, for example). Why? Because a number of midwest senators--Harkin, Grassley, Obama, Lugar, Bayh, Hegel (notice both sides of the aisle represented there)--have used their influence to make it so.

They aren't being used as loopholes. It's an incentive to keep money within the American economy rather than sending money to Brazil for their ethanol. Corn ethanol was so highly touted by politicians and the media as the solution to all our problems that it's rarely talked about how inefficient it is. They had special interests in mind, but it's hardly a loophole.

Quote:So when Obama talks about closing loopholes, it's the classic case of what I said earlier--if I (or my constituents) get the benefit, it's a subsidy, if you get it, it's a loophole.

I wholeheartedly disagree. Subsidies are the intent of a law, a loophole is circumventing the intent of a law to exploit it.

THE NC Herd Fan Wrote:

RobertN Wrote:

THE NC Herd Fan Wrote:

ETSUfan1 Wrote:Here we go again. Instead of telling us why to vote for your candidate of choice, its bash the other guy. Borrrrriiiinnngg.

And I'm with GTS. Why are the issues not being discussed? Is America really more interested in preachers, than political policy? If so, that is SAD.

First "Father" Pfleger's background and Obama's relationship with him.

Quote:Who is Michael Pfleger? As we noted last month, he is a strong supporter of Louis Farrakhan and has been described as a "spiritual adviser" to Obama. He also publicly threatened the life of a Chicago businessman and, according to one report, "is known for climbing ladders to deface liquor billboards."

Quote: Mr. Obama more eagerly met the demands for spending earmarks for churches and community groups in his district, said State Senator Donne E. Trotter, then the ranking Democrat on the Senate Appropriations Committee. "I know this firsthand, because the community groups in his district stopped coming to me," Mr. Trotter said.

Typical of Mr. Obama's earmarks was a $100,000 grant for a youth center at a Catholic church run by the Rev. Michael Pfleger, a controversial priest who was one of the few South Side clergymen to back Mr. Obama against [Rep. Bobby] Rush.

Pfleger has also acted in an "Advisory" capacity to the Obama campaign on spiritual matters.

Ok why this you ask?!? Who a person associates with directly goes to their own character and the judgment they would using in choosing Cabinet members, Joint Chief of Staff, SUPREME COURT NOMINEES!!!

Potential Obama Cabinet members:

UN Ambassador



Secretary of State



CIA Director



/sarcasm

I don't really think these individuals will get appointments.... Hopefully, but people with similar values and ideologies WILL!

So this post still shows a reason NOT to vote for Obama. Put in the MOST simple terms, Obama will appoint wacko extremists to many posts, thus leading America in the WRONG direction!!!

Here is McCains Supreme Court Justice.

http://www.strk3.com/webimages/republican_jesus2.jpg

I guess I'm being thick here, but since when has McCain leaned in that direction. Conservative and Christian are two different things I don't think McCain will consider the latter when choosing the next supreme court nominee. You'll have to do better than that to paint McCain as a right winger. We already know Obama is Left the question, Is he Socialist left and I think the answer is yes.

Well, I guess you might be right(pun intended) but it is really difficult to tell when he flip-flops from right to independent depending on who he is catering to at the moment. However, he has claimed that he would seat SCJ's that are the same as Bush's so basically the picture fits just fine.

perunapower Wrote:No, of course he's not talking about square footage of a Wal-Mart, it's much broader than that.

That was your example, not mine.

I think this is, for the most part, and should be, an intelligent discussion. I think that the discussion of what is or is not a loophole is a rabbit trail leading us astray from the substantive points here, that are really worth discussing. I'm enjoying the discussion, and would like to explore these ideas further.

So, I would propose that we simply agree to disagree on this point and move on to the more substantive questions.

I'm assuming you've read my proposed solutions. What are yours?