Are you kidding me, payroll taxes are not taxes only taxes on millionaires are?

This is a point I have argued many many times but it all goes back to my days at Ole Miss when my Econ 101 professor pulled his wheel chair up to the black board and wrote the following letters across the board in a herky jerky motion caused by his disability, TINSTAAFL. He said this is really the most important lesson he could teach us and very few if any of us will ever get it. It stand for there is no such thing as a free lunch. Somebody has to pay for it, he explains..always. This is the same BS, with the top 2 percent and their army of monkeys aka social conservatives who think Jesus was a free market economist, ( Don't ask, it is not as if they ever read the Bible or any other book. Yes I have cover to cover if you need to know, although I think you really only need the new testament if you are a Christian.), not only destroying the middle class and working class but pretty much the whole damn country. Does it matter whether you income tax is 38 % income tax level at Feds, 6 % at state level, with another 10k in fees and taxes, Fica is 10% or vice versa. What matters is who much money you have to spend in real dollars each month. Moving one tax to replace it with fees etc doesn't really help anyone unless you make so much money it doesn't matter. This jackasses seem to want to Replace the British Royalty we  rebelled against to start this experiment with a new American version only richer and meaner. Well as PT Barnum saying "You can fool some of the people all the time and all of the people all the time but you can fool all the people all the time."

Here is to the next civil war, may it be bloody and great. Maybe, one day soon, someone will do like may great, great, great, grandfather Alexander Moulins did in a Paris cafe 100 years ago and  announce "Viva Liberty" and the mobs will began to burn something like Goldman Sachs to the ground. Or maybe not.

The GOP Position on Taxes Gets Worse

By James Fallows

Please focus on the boundless cynicism here.

Through the artificial debt-ceiling "crisis," through the Moonie-like spectacle in Iowa of candidates (including Mr. Sanity, Jon Huntsman) raising hands to promise never to accept any tax increase, the Republican field has been absolutist and inflexible about not letting any revenue increase, in any form, be part of dealing with debts and deficits.

Except, it now turns out, when the taxes are those that (a) weigh most heavily on the people who are already struggling, and (b) would have the most obvious "job-killing" effect if they went up.

When it comes to those taxes -- hell, we're easy! According to the AP and Business Insider, Rep. Jeb Hensarling of Texas (at right), the Republican co-chair of the all-powerful budget Super Committee, is dead set against letting the Bush-era tax cuts expire for anyone, including millionaires. But he sees no problem in letting the current cut in payroll-tax rates -- you know, the main tax burden for most Americans -- run out.  As the AP story puts it:

>>Many of the same Republicans who fought hammer-and-tong to keep the George W. Bush-era income tax cuts from expiring on schedule are now saying a different "temporary" tax cut should end as planned. By their own definition, that amounts to a tax increase.

The tax break extension they oppose is sought by President Barack Obama. Unlike proposed changes in the income tax, this policy helps the 46 percent of all Americans who owe no federal income taxes but who pay a "payroll tax" on practically every dime they earn...

"It's always a net positive to let taxpayers keep more of what they earn," says Rep. Jeb Hensarling, "but not all tax relief is created equal for the purposes of helping to get the economy moving again."<<

"Not created equal" is exactly right. In fact, payroll-tax cuts are the sort of tax break most likely to "get the economy moving again" during a recession. (Because they put money in the hands of people most likely to spend it and therefore boost other businesses. And on balance they lower the cost of adding new workers.) Income-tax breaks at the top end are least likely to create new demand or jobs. (Because they go to people who have a lower "marginal propensity to spend" and are more likely to park the money in the bank.)

I had thought that Republican absolutism about taxes, while harmful to the country and out of sync with even the party's own Reaganesque past, at least had the zealot's virtue of consistency. Now we see that it can be set aside when it applies to poorer people, and when setting it aside would put maximum drag on the economy as a whole. So this means that its real guiding principle is... ??? You tell me.____
The fine print. Yes, I know that there is a critique of these tax cuts from the left: That by reducing the self-funding nature of Social Security, they could in the long run undermine its legitimacy and support. I am confident that this is not the reason for Rep. Hensarling's position.

And, yes, there is a further level to the critique from the right. The problem with this tax cut, according to Republican majority leader Eric Cantor, is precisely that it's temporary, so businesses can't base plans on it. Eg, according the AP quote from Cantor's spokesman, he "has never believed that this type of temporary tax relief is the best way to grow the economy."

But as an anti-recession measure, the temporary nature of the cut is its advantage. It gets money into people's hands when they need it, without building in another permanent revenue hole -- like the tax cuts Cantor fights so hard to preserve.This article available online at:
http://www.theatlantic.com/politics/archive/2011/08/the-gop-position-on-taxes-gets-worse/243930/

Copyright © 2011 by The Atlantic Monthly Group. All Rights Reserved.

Rating-Agency Hypocrites

All I can add to this is "tell it again sister" There must be a way that Goldman & Sachs can make a few billion out this downgrad. Oh, and thanks right wing nuts.

 

Rating-Agency Hypocrites

Aug 7, 2011 7:06 AM EDT

S&P’s downgrade carries a large dose of irony, since the extra debt the U.S. has piled on recently came courtesy of S&P's moronic toxic-asset ratings.

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Can’t say rating agencies don’t have a sense of humor. Last weekend, the painfully embarrassing bipartisan political drama to raise the U.S. debt ceiling centered around doing whatever it took to avoid losing our sacrosanct AAA credit rating. This weekend, under cover of a Friday night, with markets safely closed and global traders gone for the weekend, the best-known rating agency, Standard & Poor’s, basically mooned U.S. economic policy.

On one main score, S&P’s downgrade rationale is right: Washington policy-making is decidedly "dysfunctional.” In fact, that’s a seismic understatement.

But that would also be a fair description of S&P’s decision making in recent years. Remember: In the run-up to this very financial crisis, for which our debt-creation machine at the Treasury Department ramped into overdrive, S&P was raking in fees for factory-stamping "AAA" approval on assets whose collateral was hemorrhaging value.

That high-class rating was the criterion hurdle that allowed international cities, towns, and pension funds to scoop up those assets, and then borrow against them because of their superior quality, and later suffer devastating losses and bankruptcies when the market didn’t afford them the value that the S&P AAA rating would have implied.

Perhaps this downgrade is S&P’s way of saying, we’re on it now—we’re not going to give bad debt a pass anymore. Earlier this week, it downgraded a bunch of Spanish and Danish banks that are sitting on piles of crappy loans. Then, of course, there was Greece.

But just like Washington, the agency is missing the main reason for the recent upshot in debt. There’s a bar chart on the White House website that cites an extra $3.6 trillion of debt created during the Obama administration that is labeled for "economic and technical changes." That figure doesn’t include the $800 billion of stimulus money delineated separately, which is more deserving of that moniker.

Banks concocted $14 trillion of toxic assets that S&P rated AAA between 2003 and 2008.

Jin Lee / AP Photo

But it’s not as if the GOP, in particular its Tea Party wing, screamed once about that $3.6 trillion figure during the latest Capitol cacophony. Instead, the Treasury Department made up a name for Wall Street subsidies, and Congress went along. And until this spring, when the debt-cap debate geared up a notch, S&P was pretty mum about this debt and exactly why it was created.

Recall, banks concocted $14 trillion of toxic assets that S&P rated AAA between 2003 and 2008—or higher in creditworthiness than it now deems the U.S. government to be. These banks now store $1.6 trillion of excess Treasury debt on reserves at the Fed (vs. about zero before the 2008 crisis) on which interest is being paid. In addition, the Fed holds $900 billion of mortgage-related assets for the banks. Plus, about half a trillion of debt is still backing some of AIG’s blunders, JPMorgan Chase’s takeover of Bear Stearns, the agencies that trade through Wall Street, and other sundries. That pretty much covers the extra debt since 2008—not that S&P mentioned this.

But yes, S&P is right. There is no credible plan coming from Washington to deal with this excess debt, nor is the deflection of the conversation to November fooling anyone, but that’s because there’s been no admission from either party as to why the debt came into being.

The bottom line? In the aftermath of the financial crisis, the U.S. created trillions of dollars of debt to float a financial system that was able to screw the U.S. economy largely because banks were able to obtain stellar ratings for crap assets, which had the effect of propagating them far more quickly through the system than they otherwise would have spread. The global thirst for AAA-rated assets pushed demand for questionable loans to fill them from the top down, as Wall Street raked in fees for creating and selling the assets. Later, banks received cheap loans, debt guarantees, and other financial stimulus from Washington when it all went haywire, ergo debt.

Despite a few congressional hearings on the topic, the rating agencies were never held accountable for their role in the toxic-asset pyramid scheme. Now they are holding the U.S. government accountable. The U.S. government deserves it, not because spending cuts weren’t ironed out, but because Wall Street stimulus wasn’t considered, the job market remains in tatters, and there’s no recovery on the horizon.

Still, the downgrade demonstrates that the U.S. doesn't run the show—the private banks and rating firms that get paid by them do.