Tax and Spend and Spend and Spend some more

[mrjurrs]

Biden is considering a major federal tax increase for the first time in nearly 30 years, report says

President Joe Biden is preparing to include a federal tax increase in his next big economic package, according to a Bloomberg report on Monday.

People familiar with the matter told the outlet that the Biden administration is working on a follow-up spending bill to the recently-enacted $1.9 trillion coronavirus stimulus. The initiative is expected to have a bigger price-tag, and may raise the corporate tax rate and the income tax rate for high-earning individuals to offset the spending, Bloomberg reported.

The move would represent the first major federal tax hike in nearly 30 years, per Bloomberg. The last significant tax increases were implemented in 1993 under the Clinton administration.

Sources with knowledge of the private discussions told Bloomberg that current ideas involve raising the corporate tax rate from 21% to 28%, bumping up the income tax rate for individuals who earn more than $400,000 per year, increasing the capital-gains tax rate for individuals who earn at least $1 million per year, expanding the estate tax, and "paring back" tax preferences for pass-through businesses, which are not subject to corporate taxes, such as limited liability companies. https://www.businessinsider.com/bid...l-tax-increase-almost-3-decades-report-2021-3

The tax hikes are not nearly as alarming as the "next big economic package." WHY do we need another "big economic package??" Thanks!!

Elections have consequences.

 

[Kushinator]

A "couple of quarters"? Where did you get that?

People who pay attention to the political economy landscape should be well aware of the data and Fed guidance. Today's FOMC statement regarding inflation and economic growth:



Telling someone they have their head in the sand given your knowledge deficiency is just... stupid.

 

[JasperL]

Well, sure. The US can easily handle buying every adult a brand new car, too. All you do is drain the nest egg of retirees and frivol it away.

The point was we've heard fears of hyperinflation for years now. We ignore them when it's time to cut taxes and borrow every penny, or bail out Wall Street, or fund a war, but the inflation hawks get treated more seriously for some reason when the money goes to little people, versus their drinking buddies.

The perhaps more pernicious 'norm' is the Fed has long assumed that tight labor markets - i.e. when wages are going up because there's a healthy demand for workers - are inflationary and so raise rates every time things start looking up for the American Worker, because inflation!! As best I understand it, this Fed has abandoned that presumption which is a very good thing. It might be something that Trump's rhetoric helped, actually.

At any rate, the Fed's reaction to rising wages is likely just one part of why wages have remained roughly stagnant at the bottom and middle for so long because broad based wage gains are or were in fact treated as a threat to the overall economy, and so that had to be nipped in the bud - can't have regular workers in a position of demanding higher wages!! All the while 'inflation' in the securities market, or land, or housing, isn't 'real' inflation and that's fine. In fact if there is deflation in stocks, well, we have to do something NOW and flood the market with money to keep stocks inflated!! Etc.....

 

[iguanaman]

We will soon see if Biden (actually the congressional demorats) was serious about his increased taxation being limited to those making $400K and up. Obviously, that is unlikely unless the taxation of pass-through business rates (LLC’s and such) are not made progressive in the process. Beware of new (or expanded) federal taxes such as carbon taxes, vehicle mileage taxes and/or increased excise tax rates which do not apply only to “the rich”.

Read Biden's lips....No tax increases for joint filers up to $400,000.00
Biden's stimulus provides larger single-year tax breaks than Trump's or Reagan's cuts
Biden's cuts for lower-income and middle-class households
The relief law is projected to reduce federal taxes by an average of $3,000 per household in 2021 and raise after-tax income by 3.8%, according to the Tax Policy Center. Families with children would get an average tax cut of more than $6,000.
However, there's a stark contrast between who benefits from Biden and Trump's packages.
Low- and moderate-income households -- those making $91,000 or less -- are set to receive nearly 70% of the tax benefits from the most recent coronavirus relief law, the center found. The calculation includes the $1,400 stimulus checks, which has the largest impact, and several tax credit enhancements.
But nearly half of Trump's cuts went to households in the top 5% of the income distribution -- who made about $308,000 -- in 2018.
https://www.cnn.com/2021/03/17/politics/stimulus-temporary-tax-cut/index.html

 

[aociswundumho]

Defenders of the energy program tried in vain to point out that anyone who makes a lot of investments, whether it’s the government or a private venture capitalist, is going to see some of those investments go bad. For example, Warren Buffett is an investing legend, with good reason — but even he has had his share of lemons, like the $873 million loss he announced around the same time as Solyndra on his investment in a Texas energy company. Yes, that’s far bigger than the federal loss on Solyndra. So, I guess the lesson you are trying to teach us is that neither the government nor private people should invest because we can be wrong.

No, the lesson is that a venture capitalist is risking his own money, whereas the corrupt government is playing with taxpayer dollars. The government agents who lost 500 million dollars of taxpayer money with Solyndra suffered nothing for it.

That's the problem.

 

[highroller]

Biden is considering a major federal tax increase for the first time in nearly 30 years, report says

President Joe Biden is preparing to include a federal tax increase in his next big economic package, according to a Bloomberg report on Monday.

People familiar with the matter told the outlet that the Biden administration is working on a follow-up spending bill to the recently-enacted $1.9 trillion coronavirus stimulus. The initiative is expected to have a bigger price-tag, and may raise the corporate tax rate and the income tax rate for high-earning individuals to offset the spending, Bloomberg reported.

The move would represent the first major federal tax hike in nearly 30 years, per Bloomberg. The last significant tax increases were implemented in 1993 under the Clinton administration.

Sources with knowledge of the private discussions told Bloomberg that current ideas involve raising the corporate tax rate from 21% to 28%, bumping up the income tax rate for individuals who earn more than $400,000 per year, increasing the capital-gains tax rate for individuals who earn at least $1 million per year, expanding the estate tax, and "paring back" tax preferences for pass-through businesses, which are not subject to corporate taxes, such as limited liability companies. https://www.businessinsider.com/bid...l-tax-increase-almost-3-decades-report-2021-3

The tax hikes are not nearly as alarming as the "next big economic package." WHY do we need another "big economic package??" Thanks!!

Hey look! Fiscal responsibility!

 

[Taylor]

People who pay attention to the political economy landscape should be well aware of the data and Fed guidance. Today's FOMC statement regarding inflation and economic growth:

View attachment 67323528

Telling someone they have their head in the sand given your knowledge deficiency is just... stupid.

Where do you see "a couple of quarters" of 3% inflation?

 

[Logophile]

Elections have consequences.

They sure do. It doesn't really matter that the majority thinks free money is a good idea. What does matter is that they think that government is there as a gift that keeps on giving. As Americans, we can't do it. We're now dependent on China, which is taking full advantage of our manufacturing deficiencies, is threatening the South China Sea with impunity, taking over Hong Kong, and is infiltrating the high tech industry in the free world. We need to bring manufacturing home. That means making it MORE affordable, not less. We need American loyalty. Thanks!!

 

[Visbek]

Well, sure. The US can easily handle buying every adult a brand new car, too. All you do is drain the nest egg of retirees and frivol it away.

You sure about that?

255 million adults, average new car loan is $30k = $7.6 trillion. It took an epic international disaster, which has already killed over 500,000 Americans, to get the federal government to spend that kind of money. So, no. Not "easy."

You don't seem to really understand fiscal policy at all. When the federal government spends $1.4 trillion on a stimulus package, it isn't "draining" anyone's "nest egg." It is borrowing money that can be repaid over decades -- where, thanks to inflation, the amount that actually has to get repaid dwindles down to almost nothing. Right now, investors are shoveling money at the federal government at low interest rates, because they believe that lending to the US government is the most secure option. It has no effect on anyone's retirement -- e.g. Social Security's fiscal structure is not altered by any previous borrowing.

Low levels of inflation are not a problem, because wages usually rise to compensate for it. In fact, some economists were saying that 5% inflation could have been a better target after the 2008 crash, because it would have encouraged people to get out and spend, rather than hoard cash. The 2% target is an arbitrary number, and *cough* some economists think it should be revised to a higher number (probably 3%).

Inflation only really becomes an issue when it gets closer to double digits, or really starts to go crazy (e.g. Zimbabwe). However, any economist who thinks that even the truly massive spending bills of the past year will cause hyperinflation, or that the Fed would persist in policies that cause hyperinflation, should have their economics degree revoked.

 

[Antiwar]

They sure do. It doesn't really matter that the majority thinks free money is a good idea. What does matter is that they think that government is there as a gift that keeps on giving. As Americans, we can't do it. We're now dependent on China, which is taking full advantage of our manufacturing deficiencies, is threatening the South China Sea with impunity, taking over Hong Kong, and is infiltrating the high tech industry in the free world. We need to bring manufacturing home. That means making it MORE affordable, not less. We need American loyalty. Thanks!!

Did you know that the almost 20-year global war on terror is being financed through debt; tens of trillions of dollars borrowed from China?

 

[ttwtt78640]

Read Biden's lips....No tax increases for joint filers up to $400,000.00
Biden's stimulus provides larger single-year tax breaks than Trump's or Reagan's cuts
Biden's cuts for lower-income and middle-class households
The relief law is projected to reduce federal taxes by an average of $3,000 per household in 2021 and raise after-tax income by 3.8%, according to the Tax Policy Center. Families with children would get an average tax cut of more than $6,000.
However, there's a stark contrast between who benefits from Biden and Trump's packages.
Low- and moderate-income households -- those making $91,000 or less -- are set to receive nearly 70% of the tax benefits from the most recent coronavirus relief law, the center found. The calculation includes the $1,400 stimulus checks, which has the largest impact, and several tax credit enhancements.
But nearly half of Trump's cuts went to households in the top 5% of the income distribution -- who made about $308,000 -- in 2018.
https://www.cnn.com/2021/03/17/politics/stimulus-temporary-tax-cut/index.html

Wouldn’t it be rather stupid for a married couple with a combined income of over $400K to file jointly (assuming that each made less than $400K)?

 

[mrjurrs]

They sure do. It doesn't really matter that the majority thinks free money is a good idea. What does matter is that they think that government is there as a gift that keeps on giving. As Americans, we can't do it. We're now dependent on China, which is taking full advantage of our manufacturing deficiencies, is threatening the South China Sea with impunity, taking over Hong Kong, and is infiltrating the high tech industry in the free world. We need to bring manufacturing home. That means making it MORE affordable, not less. We need American loyalty. Thanks!!

Don't blame the government, blame your neighbor. Americans are so interested in saving a dime that they won't pay for American workers. You are overblowing China's position. Threatening the SCS with impunity? Maybe last year.

Biden's message to Beijing: Don't expect U.S. to ease up over South China Sea and Taiwan

The U.S. Navy conducted its first u201cfreedom of navigation operationu201d in the disputed South China Sea on Friday and, a day earlier, its first transit of the Taiwan Strait.

www.japantimes.co.jp

Hong Kong was theirs from the beginning. As soon as China had other means of accessing markets, HK was cooked. Got some bad news for you about manufacturing. When it gets here it won't be people working there.

 

[Jason Warfield]

"Tax and spend"...because we know that in order to spend, you must have money.

"Tax cuts to the rich and they will invest"....they don't invest in things that actually create jobs and real wages or that create products and provide services, instead just investing in paper to increase personal wealth.

"Tax cuts and cuts spending"....means cutting taxes for the rich and cutting spending simply means cutting spending money to programs you don't like and then transferring the money to things you like so you drive the nation into debt because there is no actual budget cuts, just re-allocations to other budget items.

At least with "tax and spend", we liberals are living in the real world and attempting to keep the balance.

 

[Tbird19482]

hahahaha

Hello? If we had a balanced budget amendment in place, we would have been completely screwed by COVID.

Back in the real world, we see in real time that spending massive sums in an emergency hasn't caused any of the problems proclaimed by the Harpies. Stimulus and extended unemployment didn't cause inflation, or unemployment, or thwart the economy, or open the gates of Hell, or whatever else conservatives have spent decades screaming about.

maybe I should have made some things clearer and said a notional emergency along with WARS and great recessions / depressions
That is what I meant but other wise we really need to get our spending under control some how
and I still think a 1% national sales tax that could ONLY be used to pay off the debt and had to be suspended after it was and could ONLY be put back on if we had to run another debt because of a national emergency . war or depression
some people don't like the fact that everybody would have to pay it but if you think about it everybody got something out of running the debt up and should help pay it off
Have a nice evening

 

[iguanaman]

Wouldn’t it be rather stupid for a married couple with a combined income of over $400K to file jointly (assuming that each made less than $400K)?

If they filed separately and either made over $200,000 they would be subject to the increased rates that Biden is proposing.

 

[ttwtt78640]

If they filed separately and either made over $200,000 they would be subject to the increased rates that Biden is proposing.

That is not in keeping with the concept (spirit?) of taxing only those making $400K or more and you know it.

 

[Kushinator]

Where do you see "a couple of quarters" of 3% inflation?

They're not even forecasting quarterly inflation. Where do you see heavy inflation though? Or are you just making claims without knowing what they actually mean?

 

[Helix]

silly Democrats. they should have just given the rest of the treasury to five old rich guys and then informed the rest of us that our SS and Medicare plans are just too darn expensive. those rich people, overcome by gratitude, would have certainly sent their kitchen scraps to the charity poorhouses that we can all look forward to when our jobs can't find any more blood to suck out of us.

 

[Kushinator]

silly Democrats. they should have just given the rest of the treasury to five old rich guys and then informed the rest of us that our SS and Medicare plans are just too darn expensive. those rich people, overcome by gratitude, would have certainly sent their kitchen scraps to the charity poorhouses that we can all look forward to when our jobs can't find any more blood to suck out of us.

It IS almost comical at this point.

 

[iguanaman]

That is not in keeping with the concept (spirit?) of taxing only those making $400K or more and you know it.

That is not in keeping with the concept (spirit?) of taxing only those making $400K or more and you know it.

Yes you are right and I was wrong, sorry. Nothing was said about joint filers.

The following are among proposals currently planned or under consideration, according to the people, who asked not to be named as the discussions are private:

• Raising the corporate tax rate to 28% from 21%
• Paring back tax preferences for so-called pass-through businesses, such as limited-liability companies or partnerships
• Raising the income tax rate on individuals earning more than $400,000
• Expanding the estate tax’s reach
• A higher capital-gains tax rate for individuals earning at least $1 million annually. (Biden on the campaign trail proposed applying income-tax rates, which would be higher)

https://www.bloomberg.com/news/arti...jor-tax-hike-since-1993-in-next-economic-plan

 

[MTAtech]

They sure do. It doesn't really matter that the majority thinks free money is a good idea. What does matter is that they think that government is there as a gift that keeps on giving. As Americans, we can't do it. We're now dependent on China, which is taking full advantage of our manufacturing deficiencies, is threatening the South China Sea with impunity, taking over Hong Kong, and is infiltrating the high tech industry in the free world. We need to bring manufacturing home. That means making it MORE affordable, not less. We need American loyalty. Thanks!!

Taxes aren’t a factor a company uses to determine prices, since taxes are on profits and not a direct cost.

Likewise, taxes are not passed onto the consumer in the form of higher prices. As proof, General Electric hasn't paid federal income taxes in at least a decade. Are GE's prices to their customer's any less expensive compared to their competition that pays taxes? No.
David Cay Johnston explains :

Taxes are on profits, and profits are calculated at the end of a tax year by adding up all the revenue and subtracting all the costs. When a product or service is sold the company doesn't really know yet how much profit, if any, it will have at the end of the year, so it doesn't know what the tax will be, so how can it adjust prices? But if a company was able to just raise prices based on anticipation of profits, then the result would be that profits would be higher because of the higher price charged, which means taxes would be even higher, so the company should have raised prices even more, but that means the profit would be even higher, so they have to go back and charge more, but then ... I think you are starting to see how silly this idea of raising prices to cover taxes can get.

The reality is that a business always charges the most it can charge to maximize revenue and profits. Economist call this the peak of the price demand curve. If they raise prices, demand falls enough to reduce revenues and profits. If they lower prices, demand increases but total revenue falls because of lower pricing. Let's say Apple charges nearly a thousand dollars for an iPhone, even though it costs less than $100 to manufacture an iPhone. Demand dictates the price. Does anyone really think Apple would drop the price of iPhones if manufacturing costs were lower? Of course not. Likewise, if Apple's tax bill was lower, the savings would go to Apple and its shareholders, not consumers.

 

[Tbird19482]

Yes you are right and I was wrong, sorry. Nothing was said about joint filers.

The following are among proposals currently planned or under consideration, according to the people, who asked not to be named as the discussions are private:

• Raising the corporate tax rate to 28% from 21%
• Paring back tax preferences for so-called pass-through businesses, such as limited-liability companies or partnerships
• Raising the income tax rate on individuals earning more than $400,000
• Expanding the estate tax’s reach
• A higher capital-gains tax rate for individuals earning at least $1 million annually. (Biden on the campaign trail proposed applying income-tax rates, which would be higher)

https://www.bloomberg.com/news/arti...jor-tax-hike-since-1993-in-next-economic-plan

Not only raise the Corporate tax rate but cut some of their deductions
Why can they carry over a loss from on year to the next and a person can't
deprecation on a machine , they use that machine to make their profit and as it is now they get to deduct the cost of that machine over time and a lot of times they get the full deprecation of that machine and keep using it , deprecation was meant so when the machine is completely written off they would replace it with a new one and a lot of Corps don't
I only know ONE corp that does it and they are a small corp.
and there are other things they write off that could be cut.
or they could not raise the tax rate so high and take all deductions away from then , make it say a 5% tax on everything the make
we need to do some thing I do not feel it is fair that people that worked all their lives and are now retired and on SS pay more in Income taxes then a lot of corps.
the GAO said that before Trumps tax cut that 42% of all corps making over a Million dollars a year US Profit did not pay a cent in US income taxes and they expected that to go up to 65% after the tax cut
as I said when people that are retired and on SS pay more in Fed. Income taxes then corps making Millions if not Billions in US profits it isn't right
Have a nice night

 

[MrPeanut]

This is great. Biden is really surprising me.

 

[Visbek]

maybe I should have made some things clearer and said a notional emergency along with WARS and great recessions / depressions

That "notional" emergency has killed over 500,000 Americans, including people I know. Stop lying about COVID.

....we really need to get our spending under control some how

I've heard that line since the 80s, and the massive disaster predicted by conservatives keeps Not Happening.

Not only does it not happen, but they actually make the situation far worse. Bush 43 and Trump, in particular, slashed taxes and went on spending sprees, putting the US into the red -- and that was before their respective crises.

As to the 1% national sales tax? Aside from the fact that sales taxes are regressive (i.e. they hit the poor much harder than the wealthy, and which of those two groups can afford it less?), it is spitting in the wind.

Oh, and feel free to identify what we should spend less on. Be specific. Then figure out what percentage of federal spending your choices will actually reduce. Hint: You'll need to cut federal spending by 20%. Keep in mind that Social Security, paying interest on the debt, defense, Medicare and Medicaid are 75% of all spending.

 

[iguanaman]

That "notional" emergency has killed over 500,000 Americans, including people I know. Stop lying about COVID.



I've heard that line since the 80s, and the massive disaster predicted by conservatives keeps Not Happening.

Not only does it not happen, but they actually make the situation far worse. Bush 43 and Trump, in particular, slashed taxes and went on spending sprees, putting the US into the red -- and that was before their respective crises.

As to the 1% national sales tax? Aside from the fact that sales taxes are regressive (i.e. they hit the poor much harder than the wealthy, and which of those two groups can afford it less?), it is spitting in the wind.

Oh, and feel free to identify what we should spend less on. Be specific. Then figure out what percentage of federal spending your choices will actually reduce. Hint: You'll need to cut federal spending by 20%. Keep in mind that Social Security, paying interest on the debt, defense, Medicare and Medicaid are 75% of all spending.

Yes taxing spending is self-defeating because much of that money will come straight out of GDP as reduced spending. Raising taxes on those that spend all they earn in the economy is nuts. For some strange reason the right always want to get blood out of stones. The money is there in the 1% ($34 Trillion) and if they think it is so important to pay down the debt they should remember that.