Wall Street's cut in the Tax Deal

[DaveofCali]

Why isn't anyone (even progressives) saying anything about this? This should be pounded in again from time to time:

The Tax Cut deal is a handout to Wall Street, because it's not even so much that the Rich are getting a tax cut, its what they do with the money: They are doing the best they've ever been doing, so they don't need the money, so they will most likely give it to their investment brokers and hedge fund managers to invest (thus meaning millions of dollars for these investment managers), and thus Wall Street, the same people who screwed our economy leading to this great recession, stand to continue to get the benefits of the Bush Tax Cut, thus being a reward for Wall Street that the Bush Tax Cuts are extended. This tax cut deal is continuing to FEED THE BEAST that is destroying America! Why should Americans be continuing to feed the beast (Wall Street), continuing to make them larger, so that they can continue to become MORE POWERFUL and take MORE CONTROL of our Government by giving them more money to lobby the government and to pour into our elections?

[emulatorloo]

1. I don't think you can draw a direct line like that. You are forgetting the Neiman Marcus Christmas

Catalog, and those Ice Cream Sundaes with the edible gold sprinkles. There is lots of stupid Luxury Shit that they buy with their "extra money."

[dkf]

2. How do you think companies get start up money?

How do you create jobs if you don't start new ventures? Especially in a tech economy we need businesses and funding to be nimble. When capital is scared who gets funding to innovate?

We live in a capitalist society. It is the way we generate economic growth.

If you want to shun something pin it on proprietary trading. Now that is where the scam is.

[louis-t]

4. Do you have ANY idea what you're talking about?

Growth is NOT generated by giving the rich more money. 8 years of bush proved that. We've been doing that for 30 years. Moreso in the last 10. Where are the jobs? Startup money, my ass. Do you know why the top tax rate was 70% 30 years ago? It encouraged (or forced) the big companies to reinvest and expand. They didn't pay taxes on the money they reinvested. But the whiny CEOs convinced Reagan that they weren't stuffing enough profits in their own pockets. When the tax rates plummeted, there was no incentive for these guys to reinvest. They simply put the money in their pockets, something I told my repug relatives would happen 15 years ago. Now that our economy is in the tank and there is no demand, you can give the pigs in the top tax bracket all the tax breaks you want and they will just sit on the money. GROWTH REQUIRES DEMAND. The 3rd quarter of this year saw corporate profits higher than any time in our history. Where are the jobs? Where is the expansion? The money is being siphoned off by the wealthiest. Their income goes up, their tax liability goes down, and YOU are stuck holding the bag. But that was a cute little bit of right-wing rhetoric in your post.

[soryang]

6. Yes, Yes, Yes, Yes!

Thanks!

[Demoiselle]

7. Let me say that for your again, Sorygang. YES YES YES!!!!

[dkf]

8. Our demand is for cheap goods that we don't even make bought with money we don't have.

They decided they didn't need to reinvest here because they were moving things to China. Why would they have reinvested here when they didn't plan to hire our people anyway?

But start ups that innovate need smart people. If they can get funding this is where we get good jobs.

[louis-t]

11. So. tax breaks for the rich create "start up money"?

Where are the "start ups"? Again, taxes on the highest earners have been historically low for the last 10 years. Why are there not thousands of "start ups" being created? Tell me about the thousands of people with brilliant ideas that can't get start up money because the evil gubmint won't let the rich siphon trillions out of the economy. Are people who mske $30 million a year anxious to gamble their earnings on start ups? They're better off investing in politicians who will slant tax laws in their favor.

Our demand for cheap goods is brought on by the fact that the middle class is dying and has no money after being forced to work harder for less. It's a self-sustaining cycle. Get your wages cut, forced to buy cheaper and cheaper goods while everything else keeps going up. You're blaming a symptom, not the root cause of the problem. You're being naive if you think that a few start ups can employ 10 million people. You obviously don't understand how economies work, your answers are simplistic and don't have any basis in fact, and we're done here.

my grammar, and clarity

[dkf]

12. Oh for gods sakes I'm commenting on the hostility towards investing.

There is a purpose to capital after all. I'm not saying it will solve all our ills but this is where the decent jobs come.

Seriously you think I was suggesting this would provide jobs for all the unemployed? We did do that with the dot.com boom but I don't expect we will see that again, nor would that match the skills of the unemployed.

[moondust]

14. Tax cuts for the wealthy are not what they used to be.

Before globalization capital investments were made in the U.S. and were thus stimulative; now they may very well be made in China or India if they are made at all.

IMO Republican "tax cuts for the wealthy as stimulus" policies are largely obsolete due to globalization.

The "hostility towards investing" probably comes from policies that continue to favor investing--in China and India--at the expense of Main Street.

[girl gone mad]

9. We live in a capitalist society?

Since when?

[EV_Ares]

3. What Warren Buffett says about the tax cut:

Warren Buffett, Nebraska: "I think that people at the high end, people like myself, should be paying a lot more in taxes. We have it better than we've ever had it. The rich are always going to say that, you know, "Just give us more money, and we'll go out and spend more and then it will all trickle down to the rest of you." But that has not worked the last 10 years, and I hope the American public is catching on."


---------------------------

You are right, most will go into the coffers at Wall Street. Yeah, they might buy some high end toys that does not trickle down to us. All in all, you can see why Wall Street would want this with the 100s of 1000s of dollars they will get.

----------------------------

“Let Our Tax Cuts Go” Why some wealthy Americans aren’t happy to see their tax cuts continued.
Edited on Sat Dec-11-10 09:40 AM by EV_Ares
In a compromise with Republican lawmakers, President Obama agreed to extend Bush-era tax cuts for wealthy Americans for another two years—breaking his 2008 campaign promise to repeal them.

In return, Republicans agreed to extend unemployment insurance, expand college tax credits, and reduce payroll taxes. Meanwhile, the continuation of tax cuts for Americans making over $250,000 a year will cost an estimated $60 billion a year and $700 billion over the next decade—a terrible misallocation of resources.


entire article: http://www.yesmagazine.org/new-economy/let-our-tax-cuts-go

[soryang]

5. It isn't cuts in marginal tax rates that stimulate growth

It is business tax credits and deductions that stimulate growth. But they don't work without marginal rate tax increases on business and wealth.

You need the carrot and the stick. Otherwise wealth is alienated from business commerce and tangible capital investment permanently. Without increases in marginal tax rates, wealth accumulates in rentier estates of the aristocracy where its is hoarded or wagered in hedge fund speculation rather than finding its way into tangible capital investments. This was taught in tax law courses for decades until the Chicago School took over the theory of business and individual income and estate taxation. Use it or lose it!

Now the traditional theory of income taxation and capital investment is unheard of, an atavistic heresy. But it is still true. It just doesn't mesh with the unseen hand, laissez faire bs of the Chicago school sweat shop and financial innovation collapse neo-liberals.

[louis-t]

15. For us lay people, what he's saying is

70% top tax rate was a good thing! B-)

[glitch]

10. Robert Reich talks about how the super rich use their excess for speculative bubbles

and things like hedge funds and derivatives. No value to civil society or "main street" economies whatsoever.

I've mentioned it a few times to zero response.

Thanks for posting, K & R!

[Faryn Balyncd]

13. K& R . . . Thanks