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Senators Kyl and Lincoln propose cuts in multi-millionaires’ estate taxes

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UPDATE, April 4: “As the New York Times explained, under Obama’s budget, ‘99.8 percent of estates will never — ever — pay a penny of estate tax.'”


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Jesus’ take on things includes the idea that the rich can help themselves and the poor deserve the help of all of us. That view, espoused by many teachers, has become Government Morality 101 for Christian and non-Christian alike through the centuries: hence, most Americans today believe in progressive tax rates.

The rich have their champions, too. Two senators—one a retirement-state Republican and one a Wal-Mart-headquarters-state Democrat—have proposed relieving the nation of $250 billion to help adult kids of the very rich enjoy wealth without work:

clipped from thinkprogress.org
Sens. Jon Kyl (R-AZ) and Blanche Lincoln (D-AR) have offered a $250 billion proposal to cut estate taxes for the children of multi-millionaires
Kyl and Lincoln’s “most pressing issue is clear: America’s wealthiest families need help. Now.”
“only 0.2 percent of the additional cost of the proposal, relative to [the Obama proposal], would go toward tax cuts for small businesses and farms.”
The rest of the cost, approximately $249.5 billion, would go to the inheritors of estates worth over $7 million. Paris Hilton, get excited.
The Waltons — the Arkansas-based family that founded Wal-Mart — are one of the key groups financing the campaign
“With all the serious work before Congress, it is a colossal waste of time to have to rebut the false claims and warped premises of ardent estate-tax cutters,” the NYT writes. “Ms. Lincoln’s and Mr. Kyl’s colleagues in the Senate should make short work of it and move on to urgent matters.”
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I’m sure this will be pitched as a valiant, virtuous war of liberation against the “death tax,” but we’re talking about $7 million estates and up, here, not Grandpa’s 120 acres. And the years of Bush have given us the greatest disparity between rich and poor since the Great Depression.

Moving government income sourcing away from those who can effortlessly afford it and onto the backs of those who earn less is ethically questionable, especially in times like these. And inviting the very rich to create a generation that need not work while those who work for them can’t afford healthcare (with the Waltons, ironically—heirs of America’s largest low-benefit employer—leading the charge) ought to offend us.

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Why cutting rich folks’ taxes doesn’t stimulate the economy

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And what does.

Another fascinating post comes from the ever-excellent True Conservative.

Consider: In 2007, only 9% of privately-held U.S. businesses … cited a “shortage of long-term finance” as a constraint on expansion. “Shortage of skilled workers” is No. 1.

So how do you increase the number of skilled workers? Here’s the story:

clipped from trueconservative.typepad.com
Here’s the central tenet of supply-side/trickle-down/voodoo Reaganomics:
If rich people get (and keep) more money, they will invest it and promote economic growth, so everyone will prosper.
That would (perhaps) be true if a shortage of investment were an important constraint on businesses […]
But availability of investment money is the least important constraint […]
[I]t ranks dead last on the list of business constraints. […]
A shortage of skilled workers in now the #1 constraint […]

Constraint 2
[This is the] economic view so ably explicated by James Livingston, which I summarize and link to here […]
The fact is that wealthy people can’t find truly productive investments offering sufficient returns, so they turn instead to investments that don’t have anything to do with production or productivity. (Think: MBSes, CDOs, CDSes, etc.)[…]
Since the greatest constraint on growth is currently a shortage of skilled workers, the best path to prosperity seems to be taxing those unproductive dollars and investing them in the thing that … is prosperity-producing: education.
Making sure that wealthy people have plenty of money is not the way to produce prosperity. That’s a self-serving myth […]
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Provocative, eh?


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Written by Monte

November 21, 2008 at 10:50 pm

Low income Iowans pay higher tax rates

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Hmm—and we thought taxation in America was progressive. None such here in my state. In fact, it’s tilted against those who have the least.

If you’re poor, you pay a higher net rate—especially in states that shift the burden away from income tax and onto sales tax. Details:[h/t Lori, via the newspaper of our youth, the Burlington Hawk-Eye.]

clipped from www.thehawkeye.com

Study finds low-income Iowans pay higher taxes

the bottom 60 percent of Iowa taxpayers pay roughly 10 percent of their income in state and local taxes.
Those in the top 1 percent, making more than $320,000 a year, pay 6.3 percent of their income in state and local taxes, the study said.

“The state sales tax has doubled in the last 25 years while we have made big cuts in income tax,” Ralston said. “This is not a good tradeoff if we want a tax system that better reflects a household’s ability to pay.”

For low-income families making less than $16,000 a year, 7.3 percent of the household income goes for sales and excise taxes. Those taxes consume 2 percent of those with household incomes about $127,000.

The report recommended that lawmakers once again expand the earned income tax credit that goes to the working poor, as well as allow local option income taxes to augment or replace local option sales taxes.
warned against any additional increases in the sales tax
the most regressive of taxes
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Now suppose you make $16,000 a year.  When you pay taxes, you pay them instead of something you need.  You don’t fill your prescriptions.  You hold off repairing your car.  You don’t even think about going to the dentist or paying for a haircut, or getting your kid’s teeth straightened.

And you make it.  Until one thing goes seriously wrong.

Say, the car’s transmission fails.  No chance Read the rest of this entry »

Written by Monte

November 12, 2008 at 1:55 pm

TheTrueConservative: Higher tax rates and economic growth

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Intriguing! After the post just prior to this, Do lower taxes on the top 1% boost economy?, a comment appeared from Steve Roth at TheTrueConservative. He offers an outlook unusual on the web. Go check it out. Here’s a sample of his work, comparing taxes to changes in gross domestic product of nations:

clipped from trueconservative.typepad.com

Oecd_taxes_and_gdp_growth_scatter
If taxes have a profound effect on growth, you’d expect to see a trend from the upper left (low taxes, high growth) to the lower right. And there is the faintest glimmer of one—check out the trend line.
Over twenty years the difference between low (23%) and high (46%) taxers was [only] a profound several percentage points of GDP growth.
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Follow the link to the other chart in his post, which compares tax increase with GDP growth. Here’s his conclusion:

. . . there’s not a shred of evidence that taxes in the range of 30–50% of GDP are the catastrophe that American anti-taxers assert.In fact, since all of these stable, prosperous, successful countries tax in the range of 25–50% GDP, the strongest evidence we see here is that taxes (or actually, expenditures) in that range are necessary to that prosperity. [emphasis mine]

C’mon, “economic conservatives” – let’s face the facts: modern conservatism’s anti-tax passion is the emperor’s new clothes. Has it made <i>you</i> more prosperous? Of course not.

Let’s question the shibboleths that keep us apart, and get on with building a better society.


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Written by Monte

January 17, 2008 at 1:48 pm

Posted in patriotism, Politics

Warren Buffett: $1M for any billionaire who pays higher tax rate than his secretary

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Warren BuffettWarren Buffett may have given away more money than anyone who ever lived, suggesting he must be something of wise fellow. Newsweek finds him addressing rich folks at a fundraiser, and taking the tax code to task:

clipped from www.msnbc.msn.com
The very rich in America pay taxes at a lower rate than most working people, and, due to a wrinkle in the tax code, private-equity partners enjoy some of the lowest tax rates of all. At a … fund-raiser in New York last month, Warren Buffett, no stranger to wealth, told an audience filled with bankers and real-estate developers the system was, in effect, rigged. “This is what Congress in its wisdom did: the 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter.” Buffett … offered a million dollars to any fellow magnate who could prove he had higher tax rates than his secretary.

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Written by Monte

August 28, 2007 at 11:54 am

Posted in Politics, Poverty