Dubya's and the neocons' tax "reform" is merely an attempt to transform the US tax policy into one that France's 18th century Bourbon's would have been happy with. The aristos didn't pay taxes under that scheme either. It had such a happy ending too.

The Democratic Party needs to confirm that the SS trust fund will be honored, that the taxes paid by working people will repaid. They need to repeat that over and over again - that the Democratic Party is not the party of thieves and criminals like the Republicans - as exemplified by DeLay and Cheney. Force the Republicans to produce a viable fiscal policy and not the credit card simulacrum we are now experiencing.

Taking the moral high road (ie. how should you treat your neighbor?) would be a promising sign that as Jim Wallis would say 'the left finally get's it.' Indeed the moral high ground may be the only high ground the Democrats have. After all, Greenspan will modify his beliefs to fit whatever Bush is selling at the time. He's betrayed the institutional integerety of the Fed. several times already so why would this time be any different?

The "kool Aid" drinkers have enabled the republicans exploit the public.

Corporate tax receipts fell to just 7.4 percent of overall federal tax revenue in 2003 – the lowest since 1983 and the second-lowest rate since 1934 – is an outrage."

The General Accounting Office (GAO) report also found that an astonishing 94 percent of corporations reported tax liability of less than 5 percent of their total income during the same time period.

Corporate tax receipts dropped from an average of 4.8 percent of GDP during the 1950s to 1.3 percent of GDP in FY2003. Treasury Department figures show that actual corporate income tax revenues fell 36 percent from FY2000 to FY2003. And while the statutory corporate income tax rate is 35 percent, the effective corporate tax rate - the actual share of corporate taxes paid on corporate profits - has averaged just 26 percent since 1993, according to the Congressional Research Service.

While corporations are failing to pay their fair share, they are laying-off and overworking U.S. citizens, passing on their increased cost to secure their international investments to the U.S. citizens and profiting aboard for a weaker dollar at the expense of U.S. living standards.

Tax reform, like Social Security, is an issue that Democrats should welcome a nice loooong conversation about. Keep 'em talking; give 'em the rope they need.

I'm curious to know how this revenue shortfall disaster will end.

It seems clear that Bush will not, under any circumstances, raise income taxes on the well-to-do. Nor will he implement a gas tax, which could help encourage energy conservation and, at the same time, raise federal revenues. The middle and lower classes seem to be tapped out, so they will not likely provide any additional revenues. And corporate tax increases are very unlikely during the next 3 1/2 years because corporate profits are predicted to be in decline within 6 months or so.

Couple this with much higher energy costs, a slowing economy (partly due to higher energy costs), federal spending which appears to have little potential for decline, and a declining dollar (resulting in even higher US-based commodity prices) - this seems to be a recipe for a financial catastrophe.

Maybe the administration's response will take the shape of (much) high interest rates to shore up the dollar, mitigating the impact of rising commodity prices. If so, the economy will slow and perhaps even tank. Maybe the response will be to cut taxes even more. The result will be much higher deficits, which will lead to higher interest rate since federal demands for borrowing will crowd out the private sector (ie. there will be competition for money). Maybe the response will be to open up the immigration flood-gates, so replacement workers happy with half wages will be the next engines of the economy, the new base of the revenue (tax) pyramid supporting retirees. Call this 'China Lite'.

Do any (or all) of these options seem palatable? Are these the only options?

Two things are clear to me: Bush will be reviled as the worst president in the history of the Republic. And the Dems will win in a landslide in 2008.

So, that poll at the top, that's their key. They use that to claim they are making the tax system simpler, and fairer, and since the average joe cant understand much about the tax code, they can pretty much shape it into anything.

Second point, i wonder if letting them implement a flat tax isnt a bad idea. for one simple reason. Let them tear up the thousands of pages of tax code and replace it with a 23% (30%) flat tax. Then we can turn that plat tax into a progressive tax, and have had the GOP eliminate all the loopholes for us.

Fantasy i am sure.

at SOME point, taxes are going to have to go up, the claw back via AMT isnt going to cut it. I just doubt this congress has the guts to do it.

New Mantra:

You can't trust the Republicans with your money!
You can't trust the Republicans with your money!
You can't trust the Republicans with your money!

This is really the core message...they've sold out the American people every step of the way.

No you can't trust the Republicans with your money.

All these ideas are great just remember Greenspan is a bourbon.

I want to buy a house. I'm done pissing my money away on rent. If low interest rates on home mortgages is a bad thing, then nothing makes sense.

I want all the write-offs, baby! I want my own piece of the pie. Give me where I may stand and I will move the world. Or, at least be able to jam out without worrying about the neighbors.

That's the campaign spirit, O Mighty Blog Lord Steve Soto! Run a campaign on tax hikes!

· Phasing out all of the first-term tax cuts;

Make Americans send back the rebate checks! With interest!

· Making corporations pay instead of avoid income taxation;

Make Americans pay more for goods and services! MAKE OIL COMPANIES PAY! How does $4 or $5 for a gallon of gas sound?

· Increasing IRS tax collections on the wealthy;

Make Americans pay more in taxes! Is 50% on all income over $50,000 enough, or should the Democrats try for 70%? How can anyone want to limit the amount we spend on social services? More dollars solve more problems!

Sounds like you're well on your way to some huge gains in 2006. Maybe if the CA Democratic challenger in 2006 can pledge to restore the car tax, you'll win back the governorship, too!

I don't understand what would be wrong with a 20%flat tax, with zero loopholes? It would by far be the easiest way to go. From the studies I have seen, it would also generate much more revenue. As it stands now, it is too easy to really screw the system, but a lot of that has to do with the terrible writing in the tax code. It has become too easy to interpret it anyway that you may see fit.

In my humble opinion, a flat tax is fair, and much easier. It would be the absolute best thing for this country at this time.

· Increasing IRS tax collections on the wealthy;

Make Americans pay more in taxes! Is 50% on all income over $50,000 enough, or should the Democrats try for 70%? How can anyone want to limit the amount we spend on social services? More dollars solve more problems!

Sounds like you're well on your way to some huge gains in 2006. Maybe if the CA Democratic challenger in 2006 can pledge to restore the car tax, you'll win back the governorship, too!

Posted by muckdog at April 11, 2005 10:49 PM

Maybe we could raise the tax rate on all incomes above $200,000, muck filled pus toad. And maybe just a little - take back the 3% that the Unelected Usurper gave them. That would probably solve a lot of problems - but it doesn't fit in with your faith-based economic beliefs, so I'm sure you'll just dismiss it as more liberal moonbattery.

And it's just terrible to actually make corpo-weasels pay the taxes they should be in the first place? Maybe we should just all sign up for some indentured servitude and avoid the middlemen altogether...

As usual Muck you oversimplify an argument based on fairness and arbitrarily throw in your own numbers to hype a "we're soaking the rich, waa, waa, sob" line of crap.

Try again.

Another idea for your 2006 and 2008 campaigns! Eliminate the home mortgage interest deduction! Make homeowners pay their fair share! Think about how much cash that'd rake in for more social programs!

ON TO VICTORY IN 2006 and 2008! HIGHER TAXES!

I say bring on the class warfare because that's exactly what we need.

We, as a country, are at the same crossroad we were at at the end of the 19th century/ beginning of the 20th, with a high concentration of wealth in the hands of a powerful minority. A strong argument was made then, supported by the likes of Teddy Roosevelt, for using the income tax as a way to bust up that concentration of wealth. The need was there to tax the rich literally to death so they no longer were in control of the government. While it took time, and even resulted in an unsuccessful coup attempt by the extremely wealthy, it eventually succeeded in giving power back to the common man and an unprecendented level of wage earner prosperity in the post World War II era.

The simple truth is trickle down economics only benefits those at the top. Daddy Bush was never more correct when he labeled Reagan's plan Voodoo Economics. And what Bu$hCo has given us is worse than anything Reagan ever envisioned.

Corporate Taxation...Look; Muck did not oversimplify. Do you really think that if you tax corporations more, they will be the ones actually footing the bill? Hell No, any person who knows even the littlest amount of economics can tell you that they are going to pass the prices onto the consumer.

If we really want to help out the underprivialiged, then the first major step in any tax reform, is lowing corporate taxes including capital gains.

I can't remember the numbers for sure but I do believe over 80% of economists feel the same way. They ought to be the ones to know.

well that was my point bigdog. people here seem ro have no clue regarding money.

Some people think corporations are overtaxed look at

this.

And this is just the state figures to 2000. Add in Federal data scince then and the cry of overtaxtation of corporations rings hollow.

rlprather,

See now this is the problem, you are looking for something in either muckdawg, or my response that is not there. My contention in a FLAT tax with ZERO loopholes, this will boost government revenue (OUR MONEY/CORPORATE MONEY). What we were discussing is that MORE corporate tax is not a good thing, has never been a good thing and will never be a good thing. Progressive taxes are the worst thing for any capitalists society, whether we are talking business or individual.

Corporations don't pay the tax out of their pockets, we pay it out of ours. As far as your data on states, I don't care. That is a state by state issue that the federal government has no bearing on, and I really don't care what each state does.

You guys talk about corporations as if what they do with their profits is a fixed item, cut in stone. And that if you raise corporate taxes, there is a direct proportionate increase in the cost of the goods provided by that corporation.

The market will bear what the market will bear. Corporate taxes are an expense to a corporation, no different than the cost of energy, services, real estate, or labor. The most direct result of an increase in corporate taxes is simply a decrease in corporate profits, which may, or may not, result in a tightening of other corporate expense or an increase in the cost to the consumer.

There is nothing to suggest a corporation with lower taxes will not use that windfall to either pay higher dividends to its shareholders, increase executive salaries, buy back its own stock, pay down debt, or simply put the money in the bank.

There is no guarantee a corporation will use its tax windfall to increase labor salaries, benefits or hiring, or lower its cost to the consumer. And in a mindset driven by the bottom line, such thinking is actually counterintuitive.

If corporate taxes are so bad then explain the U.S. growth rate between 1950-70. These were years of a higher corporate share of taxes yet also robust economic growth.

Cosrai,

DO you have any idea how business set their prices. This is Microeconomis 100. They add up their fixed expenses (Energy, Wages, Mortgage on buildings and machines, TAXES) and add that to their variable expenses (raw materials, Gasoline, Oil) From their they determine how many units of a good will be sold and set the price of the good. No business in their right mind will incur the expense of anything on their own. It does not happen that way, they will send the cost to the consumer (even if it is only a penny increase per unit of a good.)

rlprather,
Actually the boom started in 1945 as a direct result to the end of WWII, and taxes were increased to pay for the war and the deficit ran up during the 1st and 2nd new deal. This happend because America learned its lesson after WWI, and they continued to build their military machine rather than dismantle. Also the men returning from service had been forever changed, and were no longer worried about tomorrow...this had a direct impact on the amount of money people were willing to spend. Also we had the White flight out of the city and into the burbs, this required massive amounts of new homes be built, which is the number one reason for growth of any economy, because of the direct relationship because of all the people and materials required to build homes. (Concrete business, Lumber Business, Drywall, Lawn Co., plumbers, electricians, HVAC systems, Roofing, Furniture)

dog, I'm not talking about what happens in the classroom, I'm talking about what happens in the real world. Having been the captain of my own business most of my life, or working for a Fortune 500 company the other time, I have firsthand knowledge of which I speak.

All you are talking about is profit margin. While an expense may be passed on, it is not always in a direct proportion to that single expense increase. If the market will only bear the cost for a widget at a certain level, just because one of several expenses for the corporation goes up, that does not guarantee a rise in cost to the consumer if the consumer at large is unwilling to pay the increase. The corporation may be forced to cut other expenses (become more efficient), increase sales efforts to sell more units, or more simply, accept a lower profit margin. In the end, the sanity of the business has little to do in their decision as to whether to absorb an expense increase or pass it on.

Like I said, the market will bear what the market will bear. Do you honestly think the fact the rise in prescription drug costs have outstripped inflation has anything to do with taxation or pharmaceutical expenses? How about the disparity of costs between the same drugs in Canada vs. the US? Or how about rising bank fees that have resulted in record profits for banks? Pricing is all about what an industry can get the consumer to pay, not about what it actually costs to produce. Unless, of course, you're sitting in a classroom.

Corsai,

Yes I do understand exactly what your saying, the Laws of Supply and Demand play a huge role into what the final cost of the product will be. However if you decide to buy a steak dinner at your favorite establishment and the steak itself cost $25, and you purchase the meal..you are doing so because you believe you are getting a good deal. You go back to the place 2 weeks later and you see the price has jumped to $30. Do you still buy it? One rarely asks the question why did it jump $5. There could be a lot of reasons why...Raises to employees, fryer oil price increased, natural gas price increased, or perhaps taxes increased. The bottom line is that the business is not going to incur the price increase, they will pass it on to the consumer.

A better example is a landlord that raises the rent on an apartment. 8 times out of 10 it will be becasue of a rise in the price of something that he pays...so pass it onto the tenent.

dog, again you are assuming a businesses profit margin is fixed. Sure, the steak may cost $30 now, but there can, as you pointed out, be a myriad of reasons for it (one of which you didn't point out as simply an increase in desired profit margin). But the same holds true in reverse. The price of the steak may remain at $25 for years, in spite of continuing increases in expenses to the restaurant. And in this case the questions would be did the restaurant owner find a way to make the steak for less and less, did he increase the number of steaks he sells, or did he remain satisfied with a decreasing profit margin?

Where we're at now is we have corporations who have been given a windfall of lower taxes that enabled their profit margin to grow with no effort (other than lobbying for the tax reductions) on their part. No increase in efficiencies was required to give the corporations a better bottom line. However, these corporations haven't been sitting on their hands with this windfall and have at the same time continued finding more ways to increase efficiency and in turn their profits have increased even more.

In the sense of fairness, by increasing taxes on corporations all that is being asked of them is that they accept a lower profit margin as they did prior. But so long as we have people who continue to buy into this idea of corporations automatically passing on the cost to maintain these inflated margins, nothing will change.

And since the lost tax revenue must come from somewhere, either way it's the average Joe who will end up paying to keep the rich richer.

Cosrai,

How many corporations do you think their are in the U.S.? Do you feel that all corporations are like you described? See, I think there is a huge difference in our thinking of Corporations. I believe that you are talking about the corps that are represented in the DJIA, I'm talking about the less known businesses and corporations that are all over the U.S.

When the federal government says tax business this or tax business that...they cannot (or do not) single out the conglomerates that I believe you consider the corporations...they simply tax ALL businesses.

This has a huge negative impact on the businesses I'm talking about, and a very small impact on the Huge Corporations that I feel your talking about.

The problem is that you cannont lump all businesses (sole proprietorships/partnerships/corporations) into one category. However, that is exactly what happens when the government decides how much to tax business.

It is because of the smaller businesses, that I argue taxes on business are not good. I hope this makes sense to you, I'm finding it hard to convey my thoughts.

bigdog,

I referenced this up higher, but in case you are not aware, a sole proprietorship, or partnership, does not pay corporate income taxes. They only pay personal income taxes. Likewise, a small corporation will most likely form as an S-Corp (or LLC, a type of partnership) in which all income is passed through the corporate entity untaxed and the owner, or owners, only pays personal income taxes on the income.

And in the case of an S-Corp, that's a great way for a small corporation's owners to avoid much of their Social Security (FICA) taxes. While that owner would normally pay 15% FICA tax on all income up to the limit, with an S-Corp they can pay themselves much lower wages (which is the only money taxed by FICA) and receive the rest of the profit as untaxed (by FICA) pass through income.