Posts tagged ‘Payroll Taxes’

11/04/2012

Undecided Voters: Economic Issues

The better choice on each issue is in the left column, indicated by a (D) for Democrat, (R) for Republican, or (N) for neither.

(D) DEFICITS AND DEBT: Which party has shown an ability to end deficit spending and produce surpluses? Reagan made drastic tax cuts for the rich in 1981 and 1986, and tripled the debt. Bill Clinton’s budget in 1993 was passed by Democrats, without a single Republican vote, and it led to surpluses. Little Bush cut tax rates again, started an optional war in Iraq, and failed to request taxes for it. He just handed a great recession to Obama. While right-wing Republicans control the House, and promise to spend more on the military, they stubbornly refuse to tax for it. There’s no reason to believe they are capable of managing the debt.

(D) TAXES IN GENERAL: Which party is more likely to implement fair tax policies that may correct the deficit and debt. Romney said he would not raise taxes. (1-8-12). He stated a desire to lower them even further. (1-16-12). He said we only need taxes for the military, nothing else. (1-7-12) With these extreme positions, he would never get close to correcting deficits and debt.

(D) TAXES: CAPITAL GAINS, DIVIDENDS AND INTEREST: Which party has the better position on taxes as to capital gains, corporate dividends, and interest income? Romney repeatedly said during the Republican debates he wanted to completely eliminate taxes on capital gains, dividends, and interest (9-7-11) (9-12-11) (9-22-11) (12-10-11) (1-16-12) He later said he would limit his plan to incomes of less than $200,000. (1-23-12) In either event, it’s unfair to people who pay taxes on earned income. His policies would either raise taxes on the Middle Class, or make the deficit and debt worse. He never explained how he would make up for the lost revenues.

(D) TAXES: PAYROLL: Which party is more likely to promote tax cuts for regular workers? Romney was dismissive of Obama’s ongoing payroll tax cuts, as he called them a band-aid (12-10-11)

(D) TAXES: CORPORATE: Romney advocated lowering the highest corporate tax rate from 35% to 25%. (11-9-11). This new loss of revenue would have to be made up by the Middle Class.

(D) TAXES: RETIREES & THOSE WITH SMALL INCOMES: Although everyone pays sales taxes, gas taxes, real estate taxes (as a part of rent), as well as other excise taxes, Romney said everyone (poor, elderly, etc.) should pay income taxes. (9-7-11).

(D) TAX RETURNS AND HIDDEN WEALTH: Why didn’t Romney disclose more personal income tax returns? Romney promised to release “multiple years.” (1-19-12). In the end, however, he only showed us two years. We don’t know if he is hiding something, or telling the truth. Gingrich said Romney lives in a world of Swiss and Cayman Island bank accounts (1-26-12)

(D) BUDGET, NATIONAL DEBT, MILITARY SPENDING: Romney said we need to stop spending like we have for the past 40 years. (1-8-12). He was critical about leaving debt to the next generation. (11-9-11). He claimed he would cut spending, but he didn’t explain how (11-9-11), except by saying he would ban earmarks. (2-22-12). Romney promises not to cut wasteful military spending, of any kind. (10-11-11). He wants 350 million for the F-22, more aircraft carriers, more Navy cruisers, more Air Force bombers, and more troops. (11-22-11). He would increase Navy shipbuilding each year from 9 to 15, and would add 100,000 troops. (12-15-11) (1-23-12) (2-22-12). He makes the case for the other side, saying Obama is shrinking the military (1-7-12) Romney thinks our Navy is smaller than it was in 1917, and our air force is smaller than it was in 1947. (1-16-12) (1-23-12).

(D) JOBS: Which party would be better for promoting jobs? Obama inherited a recession where unemployment reached over 10% in 2009. It is now down to 7.9% and the trend has been in the right direction the past three years. Romney incorrectly argued no jobs were created from the job stimulus bill (10-11-11) He said Obama’s polices worsened the job situation, which is obviously a false claim (1-7-12). Romney argues the government doesn’t create jobs (12-15-11), the private sector does (12-10-11), but then inconsistently blames Obama for not creating jobs.

(D) LABOR: Which party is more likely to protect the rights of working people? The National Labor Relations Board (NLRB) insures fairness between organized labor and management. Romney said he would curtail the NLRB (12-10-11), and would promote anti-union “right to work” laws throughout the U.S. (1-8-12) He repeatedly showed hostility towards the NLRB, by saying it was filled with “labor stooges” (1-8-12) (1-19-12).

(D) MINIMUM WAGE: Do you think Romney would ever promote an increase in the minimum wage? In one word: no.

(D) MANUFACTURING: Which party appears to be more interested in saving American manufacturing? The Republicans clearly opposed loans help GM and Chrysler get through the Great Recession. Over fierce opposition, Obama helped them. Had they gone through bankruptcy, the nation would now be reeling from the economic ripple effects. Obama took a gamble and succeeded.  Romney said funds should not have been used to bail out GM and Chrysler (10-11-11) Romney again said the auto bailout was wrong; they should have gone bankrupt. (11-9-11).

(D) AGRICULTURE: Romney would end farm subsidies as he said to let the markets work. (1-23-12). What he is actually promoting is a localized depression in Midwestern small towns.

(D) TRANSPORTATION/MASS TRANSIT: In one debate, Romney advocated improving the infrastructure, by rebuilding bridges, roads, rail beds and air transport systems. We can’t criticize him for that, but we should not forget his party harbors the likes of Gov. Walker of Wisconsin and Gov. Scott of Florida, who blocked mass transit proposals. So on transit, it appears the Republican Party will not help America enter the 21st Century.

(D) ENERGY: Who has the better energy policy? Romney wants energy security and independence by using our own resources (10-18-11 (1-7-12) (1-19-12) That’s a nice idea, but energy resources are fungible and are sold on world markets, so no nation controls them. Romney put emphasis on developing coal, oil, gas, and nuclear (9-7-11)(1-16-12) He’d give more permits for natural gas and oil drills. (12-15-11). He does not discuss solar or wind, but why not? Since Obama includes all energy resources, his policy is better.

(N) ANTITRUST: Has either candidate advocated antitrust lawsuits to break up companies too big to fail? No. Antitrust was a Republican idea in 1890, and prosecutions are now needed to break up the concentrations of power in the hands of a few.

(D) FEDERAL RESERVE: Romney claims Federal Reserve chair Bernanke pumped too much money into the economy (9-7-11), and he would discharge him. (10-11-11). He said Congress should have Fed oversight, but no control over the currency. (9-12-11). Since Romney is opposed to priming the pump through Monetary Policy, how would he have stimulated it?

(D) BANK BAILOUTS: At one point, Romney said he didn’t want to save the Wall Street banks, as Bush did (2-22-12). It appears he would have just let the system collapse, but if that had happened, we’d be in a deep depression right now.

(D) WALL STREET: Romney correctly pointed out the derivatives market was not regulated (1-23-12), but he failed to promote a regulation of it. He instead criticized those occupying Wall Street, by saying they were engaged in dangerous class warfare (10-18-11).

(D) HOUSING: Romney supported the Troubled Asset Relief Program (TARP) (10-11-11) (10-18-11) He accused Fannie and Freddie of offering mortgages to people who can’t afford them (1-26-12). He opposed the Dodd-Frank law, claiming it makes it harder for banks to make loans (1-7-12)(1-8-12).  He said the government should not stop the banks from foreclosing (10-18-11). He claimed Obama was holding off the foreclosure process, and argued we must let the market work (11-9-11) His non-solution solution is to block-grant housing vouchers (2-22-12).

(D) VULTURE CAPITALIST: If Romney wins, he’ll be the first President with a vulture capitalist background. He claims to have successfully operated businesses (12-15-11), but he was really a Bain investor, who just made money for himself and his partners. Gingrich accused him of profiting by stripping American businesses of assets,  bankrupting companies, and laying off workers (1-7-12) Romney said they had to be downsized (1-7-12) Gingrich said Romney’s Bain looted companies and left people unemployed (1-8-12). Gingrich said he was engaged in vulture capitalism. (1-16-12). In an interesting contradiction, while discussing tax returns, Romney said his income came from a blind trust. He said the money I earn: “is not made by me.” (1-26-12).

10/14/2011

Sales Tax: Cain’s Half-Baked Idea

Herman Cain, who is not a credible Presidential candidate since he has never held an elected office, was nevertheless allowed to participate in the Republican Debates, because they felt they needed a black face on stage. After Cain explained his 9-9-9 Plan, including a proposal to impose a 9% national sales tax, he remains too frightening to even consider for President, since his sales tax idea is regressive, and would hurt everyone, except the very rich.

The untested Cain would throw out the entire Federal Tax Code, including individual and corporate progressive income taxes, capital gains taxes, estate taxes, and individual and matching Social Security payroll taxes. He would instead implement a 9-9-9 plan, (if he could ever find a Congress to agree), which would establish a flat 9% income tax on corporations and individuals, and a 9% national sales tax.

His flawed plan is based in part on incorrect assumptions. In a recent debate, Cain thought individuals now pay 15.3% in Social Security Payroll Taxes, when in fact they only contribute 7.65%. It is the matching 7.65% employers pay that pushes the total up to 15.3%. He tried to suggest individuals would save 6%, since they would pay only 9%, instead of 15.3%. In fact, the cost of most goods for the unemployed would go up 9% under his sales tax, without any offset whatsoever.

A 9% National Sales Tax would be regressive and would fall disproportionately on the unemployed, and what remains of the working and middle classes. It would force Americans to pay a 9% tax on necessities, like food, clothing, and other essentials, and this would be on top of state sales taxes, typically 6% or so.

On the other hand, his plan would be a major windfall for the rich. At present, when someone dies, only those estates worth more than one million pay any federal taxes at all. Cain would completely abandon this source of revenue, which in recent decades has already been significantly depleted by Republicans.

He would also give away taxes on Capital Gains. When people work hard and actually earn money, they must pay taxes on their income. If someone is so rich they do not need to work, and can realize Capital Gains from investments, without working, Cain would completely excuse this source of income from taxation.

Cain’s plan would also substantially give away federal revenues from any person or corporation currently in Income Tax brackets above 9%. Once again, individual millionaires, and those corporations making millions or billions, would profit the most.

Cain would also gut Social Security Payroll Taxes. In one debate, he said he wanted to phase out the Social Security retirement system, the most popular government program ever invented. His tax plan would not phase it out; it would destroy it over night.

Perhaps the worst part of Cain’s ill-conceived 999 Plan, and his National Sales Tax, is the hypocrisy. While he wants revenues to equal spending, and opposes raising the national debt, he dries up the federal coffers, and yet supports our unfunded wars abroad.

Frankly, Cain’s plan is about as dumb as he is, as it would bankrupt the U.S. Treasury. Where do the Republicans find these Sarah Palin types? Why do they give them give them center stage? It is time to send Herman Cain back to the kitchen of his pizza place, where his time would be better spent throwing something other than his half-baked ideas into the oven.

09/30/2011

Immigration Affects Jobs and SS Funding

Although the U.S. Constitution expressly delegates to the national government the power to legislate over Naturalization, states such as Arizona and Alabama, have been writing their own laws to deal with immigrants, which are being challenged in the federal courts.

On Sept. 28, 2011, a federal judge in Alabama upheld part of a state immigration statute that checks the status of public school students, but threw out other parts, since a state may not override the federal government on naturalization topics.

The judge has not yet ruled on whether Alabama can make it unlawful for an illegal alien to: 1) solicit work; 2) attend public colleges; or 3) prove legality by any means other than federal verification. She has yet to decide on whether anyone may: 1) transport or harbor illegal immigrants; or 2) stop on a road to hire temporary workers. She has yet not addressed whether businesses may: 1) hire illegal immigrants in place of legal workers; or 2) deduct their wages from corporate tax returns.

In any event, from the issues raised, it is clear lawmakers in Alabama are opposed to illegal immigration. A more interesting question however is whether they would support an increase in legal immigration, since the flow of foreign workers to America profoundly affects our economy, one way or the other.

On the one hand, increasing barriers to illegal and legal immigration shrinks the work force, and reduces unemployment. In the roaring 1920s, the door on immigration was slammed shut, and almost any American who wanted a job, was able to get one.

On the other hand, when the Social Security System began in 1935, most families had seven children paying in for every recipient taking money out. Since Americans now have only one or two children, the number of above-board workers paying taxes into the Social Security Trust Fund must be increased, by welcoming more legal immigrants in our work force.

We have a choice. Block all illegal immigration, and also refuse to increase legal immigration, hoping this will put Americans back to work, without contracting the economy; or we can increase legal immigration, expand the economy, and shore up the future of Social Security. There is no neutral position, for no matter which path we take, there are economic consequences.

09/09/2011

American Jobs Act: Pass It Now

President Obama proposed the American Jobs Act last night to put people back to work in: 1) construction: rebuilding roads, bridges, school buildings, homes and railroads; 2) education: by hiring teachers to train engineers; 3) manufacturing: by increasing exports made in the USA; 4) finance: by restructuring home loans at 4% rates; and 5) in health care: by reforming Medicare.

Obama said our economy has eroded over several decades into a crisis, and it now millions of Americans are out of work. Congress needs to stop conducting a political circus, he said, and advocated several steps they could take right now to fix the economy.

CONSTRUCTION: Obama wants construction crews hired to rebuild roads and bridges, tasks requiring bulldozers and asphalt trucks. Millions of unemployed construction workers could build airports and faster railroads. Carpenters could repair and modernize 35,000 schools, by fixing roofs and windows. They could install science labs, and Internet facilities. Obama advocated putting them to work rehabilitating homes. Next summer, disadvantaged youth could work, presumably as helpers.

CUT RED TAPE: Obama suggested cutting any red tape that gets in the way. He has but two criteria: 1) How badly is the project needed? 2) How much good would it do for the economy? We should have no more rules and regulations than health, safety and security require, he said. He rejected any idea of ending collective bargaining rights, saying we need not be in a race to the bottom.

EDUCATION: He wants to put thousands of teachers back to work in the classroom. We need to train 10,000 engineers a year.

MANUFACTURING: He would expand manufacturing jobs by signing trade deals with Panama, Colombia, and South Korea, so Americans could market more goods abroad. We need to sell more American-made goods around the world, he said. The next generation of manufacturing needs take place here in America.

FINANCE: Obama wants to generate work in the finance sector at savings and loans, and at banks, by helping homeowners refinance their mortgage loans at 4% interest rates. This would create savings, and generate spending, and stimulate the economy.

HEALTH CARE: He wants to keep people busy in the health care industry by making additional changes to Medicare and Medicaid.

OFFSET BY MEDICARE CUTS: The President said his plan would be offset by budget cuts, and it need not add to the deficit. We must make additional cuts to Medicare and Medicaid, he said, because their spending is unsustainable.

OFFSET BY TAXING RICH: Obama said we need to eliminate loopholes, deductions, and tax breaks for millionaires.

OFFSET BY ENDING CORPORATE LOOPHOLES: Obama said the Tax Code could be reformed so big corporations paid their fair share. Do we really need oil company loopholes?

TAX BREAKS FOR NEW HIRES: The President suggested tax advantages for companies that invest and create jobs in America. He would give tax breaks to companies who hire new workers, or raise wages. Companies will get a $4,000 tax credit if they hire someone who has spent more than six months looking for a job.

CUT INDIVIDUAL TAXES: Obama proposed cutting in half payroll taxes for working Americans. Families would get a $1,500 tax cut next year, under his plan, again to stimulate the economy.

MUST ACT NOW: Although the next Presidential election is 14 months away, Obama said the people do not have the luxury of waiting that long and they need help now. He asked Congress to pass his plan right away, saying: “Doing nothing is not an option.”

07/28/2011

Ask Eisenhower Re Budget, Not Reagan

One of those free copies of the right-wing USA Today was laying around the hotel lobby, and since I had a minute, I glanced at the opinion page, where the editor asked “What Would Reagan Do?” regarding the Debt Limit. I kind of chuckled, because the borrow-and-spend policies of the past 30 years started under Reagan, and he would be the last person we should ask for advice.

If Republicans wanted a true fiscal model, they should instead ask: What Would Eisenhower Do?” The General was the last Republican to deal honestly with balanced budgets. He knew enough about military spending from his service to warn the nation, as he left office, against the Military-Industrial-Complex.

President Reagan on the other hand, raised the Debt Ceiling 18 times, and just used his Hollywood credit card to keep borrowing. He cut corporate income taxes, but increased Social Security taxes on ordinary workers. His misguided borrow-and-spend policies predictably increased the National Debt threefold over eight years.

Reagan’s apologists now re-write history, as they defend his borrow-and-spend military programs by suggesting they somehow ended the Cold War. The truth is one man ended the Cold War, and his name was not Reagan, it was Mikhail Gorbachev. After Gorbachev wisely withdrew from Afghanistan in 1988, he advocated reform by promoting glasnost (openness) and perestroika (rebuilding). Once Reagan was out of office, and no longer a threat to the Russian people, Gorbachev conducted open elections in 1989, for the first time in 70 years. Gorbachev’s policies allowed for a Soviet dissolution in 1991. Reagan’s out-of-control military spending had nothing to do with it.

The bottom line is for the past 30 years, the U.S. has been in a borrow-and-spend mode. Since major sources of tax revenues were given away by Reagan, Bush, and Bush Jr., the government does not have enough money. In the Eisenhower days of the 1950s, there had to be tax revenues, before any spending took place, and yes, that included military budgets for wars, like the ones Bush Jr. started in Afghanistan and Iraq. Eisenhower would have raised taxes to pay for those wars. The Republicans of today would be wise to use Ike’s approach as their model for governing.