Republicans Ass Kiss Them

Hey, income inequality is too in part caused by the tax code, and we can make it more fair!  So says this article in Business Insider:

"It conclusively found that the wealthy benefitted from low tax rates on investment income, which in turn caused their wealth to grow faster.
Essentially, taxing capital gains as ordinary income would make the playing field more fair, and reduce over time income inequality.
Even more, such a move would serve as a deficit reduction measure..."

Read more: http://www.businessinsider.com/study-income-inequality-capital-gains-tax-rate-2013-2#ixzz2Lv8RG16l

 It's only money that keeps the Republicans from seeing that it is time to take on the big pockets, not ass kiss them.  

Proof Tax Cuts for the Rich Help the Economy

I mean, Where is the proof tax cuts for the rich help the economy?  Ruth Marcus takes on the fallacies of Romney's "plan" in her Washington Post editorial, with the introduction of things called "facts" and "numbers".  The nerve.

"Consider: The economy grew at 3.9 percent from 1950 to 1970, when the average top marginal income tax rate was 84.8 percent. From 1987 to 2010, when the average rate was less than half that (36.4 percent), economic growth was far less robust, 2.9 percent.

This comparison might be misleading because multiple factors affect the economy, so the CRS looked at a shorter, more recent time span.
From 1987 through 1992, the top average marginal income tax rate was 33.3 percent. Economic growth averaged 2.3 percent.
From 1993 through 2002, after taxes increased under President Clinton, the average top marginal rate was 39.5 percent. Economic growth averaged 3.7 percent.
Finally, from 2003 through 2007, after the Bush tax cuts, the average top marginal rate was 35 percent. Economic growth averaged 2.8 percent.

If you were going to make a causality argument from these figures, it would be that lower taxes correlate with lower growth. Such a leap isn’t justified — but where is the proof supporting Republicans’ insistence that lower rates fuel growth?"

How about that?

Crushing the Deficit

The Atlantic has been crushing it this year, easily my favorite publication right now.  Here's an article that really lays out Romney/Ryan and their plans for our already bloated deficit:

 It remains the case that the Romney-Ryan ticket, as fleshed out in recent days, is running on the following:

• Zero cuts to the military budget. "If I'm president and Paul Ryan's vice president we will not cut our military budget," Mitt Romney said. He's also talked repeatedly about increasing defense spending.  
• Zero tax increases on investment, savings, or the middle class, and a broad income-tax rate cut.
• Zero cuts to Medicare for the entirety of two terms in office.
• War with Iran if it keeps pursuing a nuclear program. 

What about those policy promises suggests to deficit hawks that Mitt Romney and Paul Ryan will shrink the deficit? Meanwhile, the GOP ticket promises to eliminate tax deductions but won't specify which ones. Naturally, the deductions that cost the most are correspondingly popular with voters. How is it that deficit hawks fail to appreciate the fact that the most likely parts of the Romney-Ryan agenda to pass are the tax cuts, increases in military spending, and the restoration of $700 billion plus to Medicare, while the least likely to pass are the elimination of tax deductions?

So for all you folks out there trying to put the deficit anvil around Obama's neck, what do you think about the Romney/Ryan plan?  I mean really.  What do you think?  I know.  You know I know and now you know you know, too. 

Time to drop the mortgage interest deduction

REALTORs and mortgage folks will hate me for this, but this article (Reason writer Anthony Randazzo) gets some facts straight, about the Mortgage Interest Deduction. Dare I say, it is time to get rid of it? As a realist and a supporter of the Simpson/Bowles framework, this is a break I'd be willing to give up to help balance the budget:

"When considering the actual tax savings of the mortgage interest deduction, the benefits to the middle class become even more meager. The average tax savings for households with income between $40,000 and $75,000 is just $152 a year. That's $12.66 a month. Compare that to the highest earners, those making $200,000 or more, who see an average of $1,862 a year off their tax bills because of the MID benefit."

Even Atlas Al is "Getting It"

Ex-Fed Chief Greenspan Favors Clinton-Era Tax Rates

You know, he's married to Andrea Mitchell :-)

EXXon Pays Too Little

Wow, turns out, EXXon pays about the same percentage in tax as the Top 400, about half what they should pay:

"Exxon Mobil registered an average 17.6 percent federal effective corporate tax rate on its annual earnings in the three years spanning 2008 to 2010. Its average domestic profits exceeded $6.8 billion. And as a 2011 Citizens for Tax Justice report points out:

Over the past two years, ExxonMobil reported $9,910 million in pretax U.S. profits. But it enjoyed so many tax subsidies that its federal income tax bill was only $39 million -- a tax rate of only 0.4 percent.

Even when Exxon Mobil had a record profit of $40 billion in 2008 due to record oil prices it had only a 31 percent effective tax rate. That’s 13 percent lower than the maximum 35 percent despite being Exxon Mobil's fifth year as the top corporate earner in Fortune 500’s annual listing. The company paid no taxes at all to the U.S. federal government in 2009 on its domestic profits of nearly $2.6 billion. It appears that they avoided the tax man that year by legally funneling their profits through wholly owned subsidiaries in countries like the Cayman Islands, and reinvesting their earnings overseas."

It looks like the ultra rich and most profitable corporations have found a way to pay only the percentage they think is fair.  I mean, if you asked them what they thought would be fair, wouldn't they jump at 17-18%?  What a deal!  But we all have to pay more taxes than we want to, at least, those of us in the bottom 99% that are people do.  

Top 400 Pay Way Too Little

Sam Pizzigati has an interesting article over at Alternet that shows how little the Top 400 actually pay in taxes as a percentage of their income.  It's about half of what the government should collect, 18% rather than 35% (the supposed tax rate for the top bracket):

  "In 2008, the IRS revealed last week, 400 Americans reported at least $110 million in income on their federal tax returns. These 400, in a year that ended with millions of Americans out of work and home, averaged $270.5 million each, the second-highest U.S. top 400 average income on record."

A majority of Republicans want higher taxes

for rich folks. 

As Offshoring Continues, US Public Peeved at "Free Market" | Common Dreams

"72% of the public—including a stunning 55% of Republicans—favor President Obama’s proposal to raise taxes on incomes over $250,000"

Will wonders never cease. 

Tax & Spend Conservatives

Joshua Holland has an interesting piece on Alternet about the "9 Biggest Conservative Lies About Taxes and Public Spending". They do try to confuse the public about the numbers, and this article hopes to clear up some of those misconceptions. It shall therefore be ignored. So, here are the 9 points, click through to the article to see them explained in glorious detail:

1. Cutting Taxes Leads to More Money for the Government
2. Conservatives' Favorite Economist Proves the Point
3. Taxes on the Rich Keep 'Wealth Producers' from 'Creating Jobs'
4. The Opposite: Tax Cuts for Upper Earners Spur Job Growth
5. Only Half of American Families Pay Taxes
6. Americans Are Taxed to Death
7. We're Being Killed by Runaway Government Spending
8. Conservatives Favor Low Taxes and Limited Government
9. Taxes on Top Earners Are Actually Taxes on 'Small Businesses'

Finance Funnies

From Frank Rich:

"It’s a measure of how rapidly our economic order has shifted that nearly a quarter of the 400 wealthiest people in America on this year’s Forbes list make their fortunes from financial services, more than three times as many as in the first Forbes 400 in 1982. Many of America’s best young minds now invent derivatives, not Disneylands, because that’s where the action has been, and still is, two years after the crash. In 2010, our system incentivizes high-stakes gambling — “this business of securitizing things that didn’t even exist in the first place,” as Calvin Trillin memorably wrote last year — rather than the rebooting and rebuilding of America.

That's as close an answer as I've found for my question "How many in the top 2% of wage earners work in the finance industry?" The Forbes list counts accumulated wealth, not how much one makes in a year, so I imagine that top 2% is even more chock full of finance industry folks. You know, the industry that shat in its pants and spread it all over...us. Screw them. I see folks who bought moderate houses at the peak and are now tens of thousands of dollars in debt, underwater in their homes. I'd like to take some finance executives' clearly unearned bonuses and fix this situation...

" companies that actually make things (and at times innovative things) have been devalued, looted or destroyed by a financial industry whose biggest innovation in 20 years, in the verdict of the former Fed chairman Paul Volcker, has been the cash machine."

And the cash machine.... they're making a mint on this, too! They got to fire half the tellers in America, and they charge $3-$10 per transaction if you can't find "your" bank machine. Sometimes I think the best solution is a money mattress, like this one the new head of BOA uses:

Update: I just have to add in here the article by Sarah Anderson ("Bankers' Pay Still Skyrocketing, as Wall Street's Casino Rolls On"), where she talks about a TV appearance she made back in '07:

"...my head bitten off for criticizing Countrywide Financial CEO Angelo Mozilo on the CNBC show Squawk Box.

My offense? I questioned whether Mozilo really deserved to be the sixth-highest paid CEO in the country, given that the company's sub-prime mortgages were already showing clear signs of toxicity, with skyrocketing foreclosure rates.

Suddenly I had show host Carl Quintanilla and the other guests, including David John of the Heritage Foundation, shouting me down, saying that Mozilo had built the company from nothing and shareholders should be happy to give him every penny of his $42.9 million in compensation.

Looking back, it's hard to find a clearer example of the business press blindly glorifying highly paid CEOs. As we all know today, Mozilo's reckless subprime adventures were a disaster for the company and the country. Four months after that CNBC show, Countrywide no longer existed."

Now BOA owns Countrywide.

We Need a Plan

Even Thomas Friedman knows we need a plan. I'm sure the Republicans feel all tingly with their win over Obama, and they have solidified the Cheneyism that "deficits don't matter." Glad to know some things don't change.
Now I know those folks in Washington just saw what it will take to balance the budget with the Simpson/Bowles deal. So how do we begin to reign things in? Tax breaks for all!

"...we need a plan, not just more sugar treats. Surely the cynical quote of the week — courtesy of The Daily Beast — goes to Dan Bartlett, the former George W. Bush administration spokesman who was speaking about the tax cuts for the wealthiest Americans that Bush “temporarily” put in place a decade ago: “We knew that, politically, once you get it into law, it becomes almost impossible to remove it. That’s not a bad legacy. The fact that we were able to lay the trap does feel pretty good, to tell you the truth.”

Bartlett offered no thoughts as to how these budget-busting tax cuts will address our country’s deficiencies today — just a high-five that in the politics of sports, the G.O.P. just scored a goal on Obama.

We don’t seem to realize: We’re in a hole and still digging. Our educational attainment levels are stagnating; our infrastructure is fraying. We don’t have enough smart incentives to foster both innovation and manufacturing; we’re not importing enough talent in an age when we have to compete for jobs with low-wage but high-skilled Indians and Chinese — and we’re still piling up debt. Responding to all this will require a whole new hybrid politics for where to cut, where to save, where to invest, where to tax and where to untax. Shaping that new politics is a revolutionary role I still hope President Obama will play....

...Economics is not war. It can be win-win, so it’s good for the world if China is doing better. But it can’t be good for America if every time we come to a hard choice we borrow more money from a country that is not just out-saving and out-hustling us, but is also starting to out-educate us. We need a plan. "

We need manufacturing jobs, and we need the government to spur investment in battery technology and production. A moonshot for energy on many levels....

Increase Taxes to Boost Wages

Counter to what one would expect, raising taxes will boost wages and help repair the Great Divergence.
From Thom Hartmann's new book, "Rebooting the American Dream":

"High top marginal tax rates—generally well above 60 percent—on rich people actually stabilize the economy, prevent economic bubbles from forming, prevent the subsequent economic crashes, and lead to steady and sustained economic growth as well as steady and sustained wage growth for working people.3

On the other hand, when top marginal rates drop below 50 percent, the opposite happens.

As Beinhart noted, the massive Republican tax cuts of the 1920s (from 73 to 25 percent) led directly to the Roaring Twenties’ real estate and stock market bubbles, a temporary boom, and then the crash and Republican Great Depression that started in 1929.

Then, from the 1930s to the 1980s, rates on the very rich went back up into the 70 to 90 percent range. As a result, the economy grew steadily, and for the first time in the history of our nation we went 50 years without a crash or major bank failure. It was also during this period that the American worker’s wages increased enough to produce the strongest middle class this nation has ever seen.

Then came Reaganomics."...

More counter intuitive thought, from a guy at Cato, no less:

Shrink the Government by Raising Taxes:

"Running the numbers through a fine-toothed comb, Cato’s Niskanen was even able to determine the exact tipping point for taxes and demand for government services: 19 percent of GDP. Whenever taxes were above that point (FDR to Carter and during the Clinton years), government grew more slowly than the rest of the economy or even shrank. Whenever taxes were below 19 percent of GDP, government grew in size and spending (usually military but others as well) like a fat man at a pie-eating contest.

“I would like to be proven wrong,” Niskanen told Atlantic Monthly writer Jonathan Rauch. And Rauch noted, “The way to limit the growth of government is to force politicians, and therefore voters, to pay for all the government they use—not to give them a discount.” And that means raising taxes to a point above 19 percent of GDP. “Voters will not shrink Big Government until they feel the pinch of its true cost,” Rauch wrote."

The whole article is worth a read for those of us brought to reality by the Simpson/Bowles numbers. Speaking of, have you tried to balance the budget? This NY Times interactive thingamadoochie was fun to play with.... I was successful, and you can be too!

Republicans to Cut Spending. Or not.

It's a big fake-out. They're not going to touch spending on Defense, and they probably won't even try to fix Medicare and Social Security. Unless the Republicans are ready to "man up" and get behind 95% of the Simpson/Bowles plan, they can just save it with the "we'll cut spending" thing. It reminds me of the ol' Dick Cheney adage, "Deficits Don't Matter". Just show us where you want to cut... we're all ready to deal with the big problem. Here's the "leadership" on the issue:

"Speaking to a crowd at the annual convention of the Federalist Society, an influential organization of conservative and libertarian lawyers, McConnell is among friends. They are happy to hear him declare, "Americans want less government, less spending and less debt."

Then the senator tells them what his party is going to do to bring the runaway federal budget under control. "We will vote to freeze and cut discretionary spending," he vows.

What is important is not so much what is said but what is omitted. The four biggest items in the federal budget are Social Security, Medicare, Medicaid, and defense. And those programs escape any mention from McConnell.

They make up about 60 percent of the federal budget. Domestic discretionary outlays, by contrast, account for only about 16 percent. If Republicans focus entirely on those, they will be sending a clear and quite believable message: We're not serious."

Obama HAS ALREADY Lowered Taxes for 98%

That's right, 98% of Americans have lower taxes thanks to President Obama. Hey, the Top 2% should feel good, too, because overall, all taxes are down under Obama, near the lowest levels ever. Huh. Guess you don't learn that on FOX News, but David Corn has a great article for those leaning into the Tea Bag:

"Speaking of taxpayers, should tea partiers be ticked off about taxes? Not at all. Taxes are down for most Americans and at a historic 60-year low, partly due to Obama's tax cuts. USA Today, that bastion of left-wing economic thought, reports:

Federal, state and local income taxes consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8% of income before rising slightly in the first three months of 2010 . . .On average, though, the tax rate paid by all Americans -- rich and poor, combined -- has fallen 26% since the recession began in 2007. That means a $3,400 annual tax savings for a household paying the average national rate and earning the average national household income of $102,000.

If Obama could get his way, he would indeed raise taxes on the wealthiest Americans -- those making over $250,000 a year -- but not on anyone beneath that high level. In fact, one-third of Obama's stimulus package -- which tea partiers decry -- was tax cuts that reached about 98 percent of Americans. Earlier this year, Bruce Bartlett, who was domestic policy adviser for President Ronald Reagan, observed, "Federal taxes are very considerably lower by every measure since Obama became president." Are tea party folks peeved Obama lowered taxes?"

Read the whole article to find out how the Prescription Drug Benefit, passed by Bush and the Republican Congress, will cost us more than the bailout, the stimulus and Obamacare....combined. Where is the outrage from the Tea Party there?

Poll This

Hmmm... maybe most people just don't realize how much wealth the super-rich are hoarding. Check out this poll:

"All demographic groups -- even those not usually associated with wealth redistribution such as Republicans and the wealthy -- desired a more equal distribution of wealth than the status quo."

The report (pdf)... shows that across ideological, economic and gender groups, Americans thought the richest 20 percent of our society controlled about 59 percent of the wealth, while the real number is closer to 84 percent.

More interesting than that, the report says, is that the respondents... believed the top 20 percent should own only 32 percent of the wealth. Respondents with incomes over $100,000 per year had similar answers to those making less than $50,000. (The report has helpful, multi-colored charts.)

The respondents were presented with unlabeled pie charts representing the wealth distributions of the U.S., where the richest 20 percent controlled about 84 percent of wealth, and Sweden, where the top 20 percent only controlled 36 percent of wealth. Without knowing which country they were picking, 92 percent of respondents said they'd rather live in a country with Sweden's wealth distribution.

I think the tea party folks might be interested in this poll, but something tells me we won't be hearing about this on FOX News or even MSNBC. Here's a good pie chart for you, since what you think is probably wrong:



Update: A Republican friend asks:
"And the problem?"

Well, not everyone thinks they're going to be a billionaire when they grow up, my friend ;-)

If we are to remain a capitalist country (I think we agree on that), we need a strong middle class to buy things. This post may help explain.

And this article has some good graphs.

More graphs from Slate, they ran a 10 part series on "The Great Divergence" recently.

Income inequality, and especially the loss of a vibrant and large middle class, could spell our economic doom! From Robert Reich:

"Here’s the point. Policies that generate more widely shared prosperity lead to stronger and more sustainable economic growth -- and that’s good for everyone.

The rich are better off with a smaller percentage of a fast-growing economy than a larger share of an economy that’s barely moving. That’s the Labor Day lesson we learned decades ago; until we remember it again, we’ll be stuck in the Great Recession."

Nancy & Barry's Latest Success

Once again, the Democrats have managed to pass a reasonable bill without the help of Republicans. A shame they should sit this one out, as most all of the benefits are for small businesses. "They" (tea partiers or republicans? hard to tell the difference...) would have you believe that the expiration of tax breaks for the richest 2% will hurt small businesses, but in reality, only 3% of small businesses would be effected, the ones with the biggest profits.

Here's a sampling of what the Democrats (the only working party) passed:

Starting today, millions of small business owners will be eligible for up to eight new tax cuts, and within weeks, thousands of businesses will finally have access to the credit they desperately need.

The bill also includes key provisions the President has fought for since the beginning of this year:

-- Small businesses receive a tax write-off on the first $500,000 of new equipment investments;
-- More than a million eligible small businesses will be able to make key long-term investments that are subject to zero capital gains taxes;
-- Entrepreneurs who take a chance on a new idea can deduct the first $10,000 of start-up costs; and
-- The self-employed can deduct 100 percent of the cost of health insurance for themselves and their families from self-employment taxes.

I really like that last one, and added the emphasis.

What's the Republican/Tea Party alternative? Stop taxing the rich so much and deregulate everything. Oh, and starve all social programs (Social Security/Medicare), so that eventually they won't be sustainable, because they don't like the government "giving" benefits in the first place. But I digress.
What I really want to do is congratulate the Democrats on passing this bill, and the health care bill, and the finance reform bill. Nancy Pelosi may be vilified by the "right", but you gotta hand it to her... she has passed legislation that Democrats have wanted for ages, with almost zero participation from "the other side". That's why they hate her, because she has been successful. She's no crazy liberal, she won't even support legalized marijuana in her home state. She's reasonable, and willing to compromise to get most of what she wants, a real politician in the best sense of the word.
It makes me long for a Republican Party that would compromise on Social Security, and make a plan that keeps it strong for the long term....you know, like Reagan did with Tip O'Neil back in the 80's. Why is Reagan always the hero, unless he did something "today's conservative" doesn't agree with, in which case it's whitewashed over. Reagan helped save Social Security.... Reagan gave amnesty to illegal aliens.... Reagan ran up the biggest deficit ever.... Reagan ran from a fight in the Middle East. He was a great president, in large part because he was willing to compromise when the time was right, and make pragmatic decisions. Today's Republicans would rather "stop everything up" than get anything done, and I think that's a disservice. I hope they will once again consider the possibility of compromise, after all, compromise is the heart of politics, and the only way to get things done in a democracy.

More info on small business jobs bill.

Update: Despite the election returns, Obama's first 2 years were an outstanding legislative success, and it was worth it to lose!

Reich is Right on Economy

Robert Reich clearly shows how income inequality, especially decreasing wealth in the middle class, will have profound effects for our economy which depends on consumer spending.

"Face it: The national economy isn’t escaping the gravitational pull of the Great Recession. None of the standard booster rockets are working. Near-zero short-term interest rates from the Fed, almost record-low borrowing costs in the bond market, a giant stimulus package, along with tax credits for small businesses that hire the long-term unemployed have all failed to do enough.

That’s because the real problem has to do with the structure of the economy, not the business cycle. No booster rocket can work unless consumers are able, at some point, to keep the economy moving on their own. But consumers no longer have the purchasing power to buy the goods and services they produce as workers; for some time now, their means haven’t kept up with what the growing economy could and should have been able to provide them."

He goes on to explain in detail how the crisis began, what is making it worse, and what we can do to make things better. And finally, he gets to a succinct point at the crux of the "debate":

"Here’s the point. Policies that generate more widely shared prosperity lead to stronger and more sustainable economic growth -- and that’s good for everyone.

The rich are better off with a smaller percentage of a fast-growing economy than a larger share of an economy that’s barely moving. That’s the Labor Day lesson we learned decades ago; until we remember it again, we’ll be stuck in the Great Recession."

Jim Cramer is and Idiot

I'm sure I'm not the first blogger to use that headline, and for good reason. I like the guy, seems like he'd be fun to hang out with at a party, but is he really one of the brightest beams of light we should look to when it comes to investments? And his grasp on politics and the power of the presidency seems outta whack, too. Today's column, "Cramer: No Rally Until Obama Steps Up":

“With the right push from the president of the United States, virtually all the negatives we're fretting about today could partially be fixed,” said Cramer. “The president has enough firepower to blast aside the obstacles standing in the way of higher stock prices ... and a stronger economy. We just don't know if he has the will or the inclination.”

How does Cramer suggest the president fix this whole mess?

1. Convince American people it's a good time to buy a house now (by giving a speech or something)
2. Keep taxes low (i.e. extend Bush tax cuts for the top 2%)
3. "compromise" on fossil fuel/ "endorse" natural gas
4. Clean out economic team (except Geithner)
5. "Announce" that private industry is not the enemy
6. Ask business what they need to start hiring, and give it to them. He says "Would it hurt to ask?"

Wow. So, by fooling the American people into buying a house, extending tax cuts for the wealthiest 2%, going whole hog on unsustainable resources, emptying the economic team of people in the know, giving lip-service to businessmen, and eventually just ask business what they want and give it to them. Simple as that really!

Politics on ActiveRain

Maybe I've gone too far this time, but I have made several comments on Lane Bailey's post about a potential 3.8% tax on real estate transactions. He was more fair than most on ActiveRain in his posting about the issue, though I disagree with his conclusion that this will have a major implication for the sale of luxury homes. It's a complicated tax (only applied if you pass certain earnings & profit-from-sale hurdles), that will probably effect less than 1% of transactions, and will only be paid by the very rich who make a profit from the sale of their residence or investment property.

Well, the discussion in the comments section became quite political and interesting, and I had to put my 2 cents in there. Well, maybe 6 cents, but I'm generous!

Here's a link to the whole thing. And here are my parts:

1. Perhaps it's only fair for the very richest among us to pay more taxes. I know that sounds crazy to some folks, but take into account these figures:

"the richest 1% of earners collected 8% of national income in 1973. "By 2006, the top 1% got nearly 23% of the pie, the highest proportion since 1929, " he writes. Moreover, the richest 1% now earns more than the bottom 50% of Americans. During almost exactly the same period, the pay gap between the top 100 CEOs and workers rose from 45 to 1 in 1970 to Himalayan proportions in 2006, reaching 1,723 to 1"

article here

It's obvious that the very rich pay most of the taxes....they have most of the money!

To claim that the rich are being fleeced by the government is a bit of a stretch though, given the massive movement of money from the middle class to the upper class over the past 30-40 years.

Also, when I first heard this "news" elsewhere, it came in an e-mail prefaced with this distinguishing message:

Under the new health care bill - did you know that all real estate transactions are now subject to a 3.8% Sales Tax? The bulk of these new taxes don't kick in until 2013 (presumably after Obamas re-election). You can thank Nancy, Harry and Barack and your local Democrat Congressman for this one. If you sell your $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation who often downsize their homes. Is this Hope & Change great or what? We can vote the bums out in November and demand that they eliminate the bill or at the very least defund it. Then in 2012 repeal it.

Oh, you weren't aware this was in the Obamacare bill? Guess what, you aren't alone. There are more than a few congressman that aren't aware of it either. AND, there are a few other surprises lurking.

Maybe it's just me, but I found that delivery to be off-putting, and a good example of how the "tea party" types will take something with a grain of truth and blow it up to giant proportions, to incite fear and worse.

Our Realtor Association manager replied to the e-mail with the following:

It is a hoax! Here is the NAR information.

Business Report
No 4.0% "Sales Tax" on Home Sales In Recently Enacted Health Reform Bill

Contrary to reports and newspaper articles circulating widely on the Internet, there is not a 4.0% "sales tax" or "transfer tax" on the sale of a home included in the recently signed health care reform bill. The analysis underlying these reports is incorrect and fails to take into account the interplay of the bill's provisions with already existing real estate tax laws that remain unchanged.

What was included in the health bill is a provision that imposes a new 3.8% Medicare tax for some high income households that have "net investment income." Any revenue collected by the tax is dedicated to the Medicare hospital insurance program. This new tax will only apply to households with Adjusted Gross Income (AGI) of more than $200,000 for individuals or more than $250,000 for married couples. Since capital gains are included in the definition of net investment income, an additional tax obligation might result from the sale of real property.

In the case of the sale of a principal residence, the existing $250,000/$500,000 exclusion from capital gains on the sale of a principal residence remains unchanged. Consequently, even when the AGI limits are met, the new tax would not be applied to all capital gains that result from the sale of a home. Rather, it would only apply to any home sale gain realized in excess of the $250K/$500K existing primary home exclusion that pushes the filer's AGI over the $200K/$250K adjusted gross income limit.

The new Medicare tax will not take effect until January 1, 2013.

For more information on the new Medicare tax, please consult NAR's Health Reform Q&A on this and other provisions of the new health reform law located at:

www.realtor.org/healthreform

2. I came across an article that more clearly shows the disparity between the top 1% and the rest of us. "Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.[1] During those years, the Piketty-Saez data also show, the inflation-adjusted income of the top 1 percent of households grew more than ten times faster than the income of the bottom 90 percent of households." 3. I appreciate that our tax system is crazy with loopholes and special exemptions, etc. (mostly for the rich....and corporations), and I'd gladly trade that for a "fair tax" on consumption, but we are where we are. I am pointing out the earnings disparity between the top 1% and the rest of us to show that when too much of our (collective) money is tied up in the hands of the very few, that is bad for the whole economy, it's unsustainable. So do we just allow the poor to become poorer and the rich richer until.... how does that play out? We have had as much of a free market as any country in the history of the world for the past 30 years, and we have proven that those policies don't work. Even Alan Greenspan has admitted this: "he acknowledged that his libertarian view of markets and the financial world had not worked out so well. "You know," he told the legislators, "that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well." While Greenspan did defend his various decisions, he admitted that his faith in the ability of free and loosely-regulated markets to produce the best outcomes had been shaken: "I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms."" Like it or not, Capitalism requires regulations..... mortgage-backed securities anyone? Maybe some 40 to 1 derivatives with that? You say: "the rich also pay a higher share of taxes than at any time since the Great Depression" If you look at historical rates, you'll see that not only is this not true, we are near the lowest ever. You say: "Teaching people to be dependent on the government for all of the important decisions is NOT teaching them to be independent or successful. " That's patronizing, and I don't need the government to teach me how to live, I need a government that creates and maintains a stable economy so I can flourish on my own. Without regulations, Laissez-faire economics = Dickensian nightmare Working class wages have been stagnant since the early 70's, while the very rich have amassed huge fortunes. Bill Gates and Warren Buffet are challenging the Forbes 400 Richest to donate half their net worth to charity. I wonder how that's going.

Tea Party and Taxes

USA Today had an article on tax rates recently:

Tax bills in 2009 at lowest level since 1950

And as long as we're looking back at the good ol' 1950's:

John Boehner's America

The rich paid 90% tax rate in the 1950's

Hey, our taxes aren't that bad!