Most Tax Breaks Go To Middle Class Households, Not “The Rich” Or Corporations

We won't solve our fiscal problems by soaking "the rich."

With President Obama set to unveil a tax proposal that is little more than a play at old-fashioned “soak the rich” politics, it’s worth keeping in mind that most of the benefits provided in our Tax Code don’t go to those evil rich people and their corporations:

As President Obama and congressional Republicans argue over how to rewrite the U.S. tax code, the debate has revolved around “loopholes” for corporate jets and ending “carve-outs” for well-heeled special interests. But if the goal is debt reduction, that’s not where the money is.

Broad tax breaks granted to millions of families at all income levels dwarf the corporate giveaways. Over the past two years, largely because of these popular benefits in the federal income tax code, the government has reached a rare milestone in tax collection — it has given away as much as it takes in.

The number of tax breaks has nearly doubled since the last major tax overhaul 25 years ago, with lawmakers adding new benefits for children, college tuition, retirement savings and investment. At the same time, some long-standing breaks have exploded in value, such as the deduction for mortgage interest and the tax-free treatment of health-insurance premiums paid by employers.

All told, federal taxpayers last year received $1.08 trillion in credits, deductions and other perks while paying $1.09 trillion in income taxes, according to government estimates.

Only about 8 percent of those benefits went to corporations. (The write-off for corporate jets equals about .03 percent of the total.) The bulk went to private households, primarily upper middle-class families that Obama has vowed to protect from new taxes.

“The big money is in the middle-class subsidies,” said Syracuse University economist Leonard Burman, former director of the nonpartisan Tax Policy Center. “You’re not going to balance the budget by eliminating ethanol credits. You have to go after things that really matter to a lot of people.”

It wasn’t always this way, of course. The tax code has grown more complex over time, with an ever-increasing amount of credits, exemptions, deductions, and subsidies, because it’s far easier for Congress and Presidents to implement policy via a tax code than to actually spend money on it. As the article notes, President Clinton did it in 1997 with tax credits for education when he couldn’t get Congress to authorize increased spending on student loans. Those tax credits have cost an estimated $20 Billion. President Bush did it four years later when he created a special tax exemption for “victims of terrorism” that cost an estimated $360 million. Additionally, twice during his Presidency, Bush utilized special tax “rebates” in a failed effort to spur economic stimulus. In his own stimulus package, President Obama had a change in withholding rules that reduced the amount of money that went into government coffers. Now, the President’s jobs plan is proposing tax credits for hiring people who have been unemployed for six months, which is unlikely to actually spur hiring, a separate tax credit for hiring veterans, and of course the extension of the Payroll Tax Cut.

Even the much maligned Bush tax cuts, which supposedly gave an unfair tax cut to “the rich” (a term that is never clearly defined, for obvious political reasons), actually benefited the middle class more:

The legislation doubled Clinton’s child credit, wiped out the marriage penalty for joint filers and expanded refundable credits. Of the approximately $4 trillion that would be lost if the Bush cuts stayed in place through the next decade, only about $800 billion would go to the wealthiest households making more than $250,000 a year, according to government estimates.

Georgetown University law professor John Buckley recently estimated that 95 percent of the revenue lost to tax expenditures is concentrated in 10 categories that aid families and advance popular policy goals. The “special-interest stuff,” he said, such as write-offs for corporate jets, is minuscule by comparison — “unless we’re all special,” he said.

Indeed, that much maligned tax break for corporate jets accounts for 0.03% of the total benefits from tax breaks given out in the tax code. Eliminating it won’t solve any short or long term fiscal problems, but it sure does go well with the political attacks on wealth and success that once again seem to be such a part of the Democratic Party’s fiscal party, and which are at the centerpiece of the new “Millionaires Tax.”

What this tells us is something very simple. Getting our fiscal situation under control would require the kind of full-scale tax reform that would eliminate all of these tax breaks and set the Tax Code back on a footing where its primary purpose is to raise revenue, not to achieve policy goals that cannot be achieved through other means. This would mean getting rid of a host of politically popular deductions and credits, which is why you’re not seeing President Obama or anyone else in Washington propose anything close to that. Others have come up with plans that come close to doing this, though. The Simpson-Bowles plan had tax reforms that eliminated virtually all tax deductions, and the tax plan put forward by Jon Hunstman does the same thing. Of  course, the Simpson-B0wles plan was shoved in a drawer somewhere and quickly forgotten, and Jon Huntsman is pulling 2% in the polls. Because the American people don’t want to be told that they’re going to have to sacrifice to fix our problems, they’d rather be told they can all be solved on the back of that awful entity “the rich.” Until we get beyond that, we’re not going to accomplish anything.

FILED UNDER: Barack Obama, Congress, Deficit and Debt, Politicians, Taxes, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. Ben Wolf says:

    Because the American people don’t want to be told that they’re going to have to sacrifice to fix our problems

    The American people (meaning the not rich) are already sacrificing by watching their retirement funds implode, their wages fall and their jobs evaporate. You can’t possibly be this insensitive in real life, so I wonder what you’re playing at.

  2. michael reynolds says:

    Republicanism in a nutshell:

    WASHINGTON — Rep. Paul Ryan (R-Wis.) said on Sunday that House Republicans would oppose President Barack Obama’s payroll tax cuts for both employers and employees, arguing that the policy had already failed to provide a sufficient boost to the economy. “It hasn’t worked,” Ryan said, suggesting the current temporary tax cut should be allowed to expire, which will amount to a 50 percent tax hike on workers making less than $106,000 per year.

    He also said that he opposes the president’s plan to require millionaires to pay the same tax rate as the middle class, known as the Buffett Plan. “Class warfare might make for good politics, but it makes for rotten economics,” he said.

    Good little toadies. Lick that boot.

  3. ponce says:

    We won’t solve our fiscal problems by soaking “the rich.”

    Maybe not, but we can make nice start.

  4. Dave says:

    Until we get beyond that, we’re not going to accomplish anything.

    This is America; we’re never going to get beyond that.

    Which is why we need savvy politicians to frame a Simpson-Bowles-esque tax reform plan as a big soak-the-rich scheme. Obama is our best shot at that. (No one’s going to buy Boehner wanting to take on the rich.)

    This is politics in the United States. Play the game, don’t fight it.

  5. Herb says:

    Until we get beyond that, we’re not going to accomplish anything.

    Until we get beyond the instinct to protect the pocketbooks of millionaires, we’re not going to accomplish anything either.

    Soak the rich? Dude, the proposal’s detail are so sketchy they come down to this: “Make the rich pay the same rate as the middle class.” Since that would imply a tax increase of some sort, I can see why you’d be instinctively against it.

    But “soak the rich?” if making the rich pay the same rate as the middle class is “soaking” them….doesn’t that mean the middle class is getting soaked too? Can we call the current policy, with no tax increases on the rich, “soaking the middle class?” Would that be fair?

  6. Ben Wolf says:

    @Herb: I haven’t yet figured out whether Doug posts these sorts of things just to be provocative, or whether he really doesn’t think things through. If this had been posted at Reason by Matt Welch we would have gotten scintillating analysis such as “Like, wow!” to let us know he’s an idiot, but Doug is a lot cagier. I suspect he likes to provoke.

  7. ponce says:

    I haven’t yet figured out whether Doug posts these sorts of things just to be provocative, or whether he really doesn’t think things through.

    Haha, in addition to his constant stream of posts here, Doug also averages 10,000 tweets a month

    http://twitter.com/#!/dmataconis

    That doesn’t really leave a whole lot of time for fact checking.

    Or thinking in general.

  8. @ponce:

    Ad homimen attacks against the post author or other commenters are a violation of our comment policy. Stay on topic.

  9. @Herb:

    The fact that ideas like Obama’s will make you feel good doesn’t remove the fact that they’ll do next to nothing to actually deal with our fiscal problems. Start talking about getting rid of all the tax subsidies, including the ones that go to the middle class and then you’ll be talking seriously. Until then, this is little more than pure envy-based politics.

  10. ponce says:

    Stay on topic.

    Will do.

    I am looking forward to seeing the Republicans squirm while defending this bill that has the overwhelming support of middle class America.

    I think it’s going to cost them the House and any shot they had at the Senate and the White House.

  11. Herb says:

    @Doug Mataconis: “Until then, this is little more than pure envy-based politics. ”

    I disagree. It seems designed to capitalize on the desire to raise rates on the rich, sure, but the policy itself…if indeed it equalizes rates…has a practical component to it, as well. Bottom line is that the top tier is where all the money is.

    If we got rid of all tax subsidies for the middle class, you’re talking a tax increase on precisely the group that can afford it least. Why would that be more desirable?

  12. @ponce:

    Have you noticed that some of the most heated criticism of the bill has come from Democrats like Bob Casey and Joe Manchin? And you don’t exactly see Claire McCaskill jumping on board either. Not to mention the fact that Harry Reid has already said he’s not going to rush bringing this bill up for a vote. Obama’s own party isn’t taking this bill seriously

  13. @Herb:

    The goal should be to return the Tax Code to the only purpose for which it’s supposed to exist, raising revenue. This practice of using tax subsidiaries to reward and penalize behavior is pernicious, and needs to end. Additionally, it increases the costs of tax compliance for everyone, which has its own economic impact.

    And if the tax burden were more realistic, then many the American people who start thinking more rationally about whether they really want to to pay for all those government programs they supposedly love.

  14. jan says:

    Eliminating it (corporate jet deductions) won’t solve any short or long term fiscal problems, but it sure does go well with the political attacks on wealth and success that once again seem to be such a part of the Democratic Party’s fiscal party, and which are at the centerpiece of the new “Millionaires Tax.”….. the American people don’t want to be told that they’re going to have to sacrifice to fix our problems, they’d rather be told they can all be solved on the back of that awful entity “the rich.” Until we get beyond that, we’re not going to accomplish anything.

    A good analysis of past deductions devised by various administrations, and where the taxation benefit really lies.

    The bottom line is that social progressives want a scapegoat for what is economically going wrong today. This is the same tack that FDR applied during his reign as President — blame the rich and then tax them to death. It didn’t work then, even though social progressive historians, like Schlesinger, have been front and center in painting a rosy picture of FDR’s mostly failed programs.

    Obama has been attempting to follow in FDR’s footsteps, and his rhetoric and legislation has been producing similar results — nada, except a denouncement by business through their rejection of his policies in pulling back their investments.

    However, that will not deter progressives from continuing to go for the financial jugular, of the almost mythical rich person, in their determination of creating a Nirvana, whereby government gets bigger, as people become smaller in their ability to pursue their own lives as they see fit.

  15. Herb says:

    @Doug Mataconis:
    “The goal should be to return the Tax Code to the only purpose for which it’s supposed to exist, raising revenue. ”

    Then doesn’t it make sense to seek that revenue from the folks who have it?

    “This practice of using tax subsidiaries to reward and penalize behavior is pernicious, and needs to end. ”

    I don’t think that will happen. From cigarette taxes to the mortgage interest deduction, many of these taxes are extremely popular. Very few people are philosophically opposed to the practice, so the likelihood of it ending is slight.

  16. anjin-san says:

    FDR’s mostly failed programs.

    Hmm. FDR pretty much saved this country. Twice. During his long tenure there were certainly failures, how could there not be? But to talk about his “mostly failed programs” is a statement of stunning ignorance.

    Everyone I know who lived through those times – everyone – states flatly that FDR saved the country. And that includes some people who are staunch conservatives today.

  17. An Interested Party says:

    Have you noticed that some of the most heated criticism of the bill has come from Democrats like Bob Casey and Joe Manchin? And you don’t exactly see Claire McCaskill jumping on board either. Not to mention the fact that Harry Reid has already said he’s not going to rush bringing this bill up for a vote. Obama’s own party isn’t taking this bill seriously.

    That’s because those particular senators (except for Reid, of course) are up for reelection next year and they’re scared to death that their Republican opponents will be pushing the same “soak the rich” horseshit that you are spreading…

  18. john personna says:

    The main flaw in this piece is that it centers on emotion, and not numbers. “Soaking” the rich is taxing them at the same rate as the middle class. And $20B or $360M(!) are cited as causes of a $14T debt. I don’t think so.

    Basically, we have bills.

    We can pay our bills, all of us, or we can just whine about what’s fair.

  19. ponce says:

    Have you noticed that some of the most heated criticism of the bill has come from Democrats…

    An indicator of exactly how much influence America’s wealthy elite has over “the government of the people.”

    But there are political rewards waiting for any politicians willing to go against their rich masters and side with the vast majority of American voters.

  20. John,

    The numbers are right there. The tax breaks go to the middle class not the rich. Other studies have established quite clearly that “the rich” pay a proportionate share of taxes far larger than the percentage of the population. These are facts.

  21. john personna says:

    @Doug Mataconis:

    There are a few unconnected numbers there, for instance the comparison between personal and corporate tax credits, but there certainly was no play to close the deficit, and pay down the debt.

    I mean, why go here:

    Other studies have established quite clearly that “the rich” pay a proportionate share of taxes far larger than the percentage of the population.

    You understand that all that says is that the tax system is progressive, something most people support.

    But again, I’m fine with reducing loopholes for the middle class. You’ve got my vote on eliminating the home mortgage deduction. But what are you going to do, leave that $14T out there until someone attacks non-rich people first?

  22. john personna says:

    (This concentration of what “feels fair” is what got us a $14T debt in the first place.)

  23. ponce says:

    These are facts.

    Then you could surely provide a link to some studies that back you up.

    I’d especially like to see one that shows that hedge fund managers making salaries up to $2 billion a year and being taxed at 15% are paying “a proportionate share of taxes far larger than the percentage of the population”

    (Links to Kochtopus propaganda houses not acceptable)

  24. Drew says:

    Get real, people. Doug is spot on. Elevate your thinking from your spider holes.

    Attacking the “rich” makes you the enemy of a couple percent of the electorate. Tax gifts to the “middle class” and outright transfer payments to the poor make you electable with so many more people. WTFU

  25. Drew says:

    PS –

    Dave Schuler, at what I call the “sister site” has done an excellent job at taking a quantitative shot at pending liabilities vs the ability to tax them away. You should search his archives. For those of you who beleive this possible, here’s the bong………..

  26. ponce says:

    For those of you who beleive this possible, here’s the bong………..

    This has to be the second lamest straw man working class fringe right Republican servants of the rich construct (James went with the lamest).

    Nobody says taxing the rich a little more will completely close the budget deficit.

    But it is a very good start.

  27. jan says:

    @anjin-san:

    Everyone I know who lived through those times – everyone – states flatly that FDR saved the country. And that includes some people who are staunch conservatives today.

    Some of the Great Depression tomes written that were taught to kids in school, were by social progressives — some of whom were not well-schooled in economics — Schlesinger is a prime example.

    Try picking up a book called, “FDR’s Folly, someday. It explicitly goes through FDR’s policies, piece by piece, and how these policies actually unraveled the economy more and were divisive in putting people back to work — especially when it came to the extraordinary power the Wagner Act gave to the Unions.

  28. jan says:

    @ponce:

    Nobody says taxing the rich a little more will completely close the budget deficit.

    But it is a very good start.

    What it will ‘start’ is discouraging capital from coming back into this country, further eroding our chances for job start-ups. And, any more revenue gleaned from over taxation of ‘rich’ people will be nullified by an over-all decrease in taxable revenues.

    But, you will never acknowledge this correlation of events. Instead you’re such slobber more blame onto others, until you simply run out of money and blame, altogether.

  29. ponce says:

    What it will ‘start’ is discouraging capital from coming back into this country, further eroding our chances for job start-ups.

    Jan,

    Try to stop being so afraid.

    Over 80% of the world’s savings are invested in America each year.

    Those investments aren’t going anywhere if your wealthy masters have to start paying a few percentage points more in taxes each year.

  30. Drew says:

    “But it is a very good start.”

    No its not. Its like sticking your finger in a dam with 15 leaks. get real. Further, it could be self defeating, but thank you for you faith based ideology.

  31. MBunge says:

    @jan: “What it will ‘start’ is discouraging capital from coming back into this country, further eroding our chances for job start-ups. And, any more revenue gleaned from over taxation of ‘rich’ people will be nullified by an over-all decrease in taxable revenues.

    But, you will never acknowledge this correlation of events.”

    We have recent evidence to consider. Bill Clinton raised taxes on everybody, including the rich. Did events unfold as you suggest? If not, stop making an argument that’s proven to be incorrect.

    Mike

  32. Drew says:

    “Those investments aren’t going anywhere if your wealthy masters have to start paying a few percentage points more in taxes each year.”

    That must be why this recovery, unlike others, is not investment lead, and cash is building up on balance sheets.

    Carry on.

  33. jukeboxgrad says:

    doug:

    Other studies have established quite clearly that “the rich” pay a proportionate share of taxes far larger than the percentage of the population.

    It makes sense that they would “pay a proportionate share of taxes far larger than the percentage of the population,” because their share of income and wealth is “far larger than the percentage of the population.”

    Getting our fiscal situation under control would require the kind of full-scale tax reform that would eliminate all of these tax breaks

    That’s not the only possible method for “getting our fiscal situation under control.” We can also accomplish that by raising taxes on the rich.

    If your household income is above $353K, that means you’re in the top 1%. Aggregate household income of this group is $2.2T. An income tax surcharge on this group could raise about a trillion dollars a year. Raising about a trillion dollars per year would be enough to completely eliminate the deficit within about two years. More details about these numbers can be found here.

    ponce:

    Nobody says taxing the rich a little more will completely close the budget deficit.

    Correct. But it’s true that higher taxes on the rich (just the top 1%) could “completely close the budget deficit.”

    It’s important to point this out because I think most people don’t understand that this is true. And it’s important to notice how tilted the national tax discussion is: that this possibility doesn’t ever get mentioned, even just as a hypothetical. That darn liberal media.

  34. Drew says:

    The so-called Clinton economic miracle started – after a dismal 1992 – 1996 period – when the Repbublicans took hold of Congress and brought forth the prospects of expense control and…………Clinton cut capital gains tax rates.

    So much ignorance, so little time.

    Too bad the Republicans later got full of the elixer………..and started to behave like Democrats.

  35. Drew says:

    My work is done here. jan is well in control…..

  36. ponce says:

    That must be why this recovery, unlike others, is not investment lead, and cash is building up on balance sheets.

    A tax on cash holdings of corporations would probably be easier to pass.

    Of course, make it so it can be reduced by hiring more Americans.

  37. steve says:

    “The numbers are right there. The tax breaks go to the middle class not the rich. ”

    Just a bit of a correction. 20% of the breaks go to about 1% of the population. They very disproportionately favor the wealthy.

    Steve

  38. jan says:

    @MBunge:

    We have recent evidence to consider. Bill Clinton raised taxes on everybody, including the rich. Did events unfold as you suggest? If not, stop making an argument that’s proven to be incorrect.

    I have responded to the Bill Clinton example twice now.

    Clinton raised taxes early during his first term. What he got from that move was two/thirds less revenue than was expected. He later on said he shouldn’t have raised taxes so high. Afterwards, he lowered taxes, and the economy grew.

    Clinton was also aided and abetted by the checks and balances of a Republican Congress, taming his desire for his own version of Obamacare, encouraging him to sign welfare reform, plus his administration enjoyed a blooming dot com era. The dot com phase was ebbing into a recession when GWB took over. So, Clinton’s legacy escaped being tainted by that recession — a lucky President, indeed, despite the problems incurred by impeachment.

  39. jan says:

    @Drew:

    The so-called Clinton economic miracle started – after a dismal 1992 – 1996 period – when the Repbublicans took hold of Congress and brought forth the prospects of expense control and…………Clinton cut capital gains tax rates.

    Sorry, I didn’t see that post, and so I basically repeated the same thing to MBunge. But, I did forget about the capital gains cut……hmmm, why don’t the socially progressive dems ever mention that when they are extolling the merits of raising taxes and how that will help the economy?

  40. ponce says:

    why don’t the socially progressive dems ever mention that when they are extolling the merits of raising taxes and how that will help the economy?

    Federal taxes were the lowest they’d been in a century when our current economic troubles began.

    Why don’t the fringe right apologists for the rich ever mention that?

  41. glasnost says:

    So much stupid. So much painful word games.

    Even the much maligned Bush tax cuts, which supposedly gave an unfair tax cut to “the rich” (a term that is never clearly defined, for obvious political reasons), actually benefited the middle class more:

    Horsecrap, and ignorant horsecrap at that. Please see here:

    http://www.nytimes.com/2007/01/08/washington/08tax.html

    Families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts, according to a new Congressional study.
    Skip to next paragraph

    The study, by the nonpartisan Congressional Budget Office, also shows that tax rates for middle-income earners edged up in 2004, the most recent year for which data was available, while rates for people at the very top continued to decline.

    Everyone else but you knows this already, but you refuse to learn, because it doesn’t suit your biases.

    As you yourself point out, “the rich” is a subjective term. That very fact makes it actually *extremely *fucking* *obvious* that our deficit can in fact be eliminated, mathmatically, by taxing the ‘rich’ as long as you set the income floor low enough. For example, if > 50K / year – the median fucking income in this country – makes you rich, then voila! Now we agree, it’s time to end tax deductions on the rich! Of course, if you define ‘the rich’ as north of 250K / year, then it’s a lot harder. But why would we do that?

    But that does NOT mean it’s not time to tax the ‘rich’, including even just the north of 250K! Seriously, what the fuck is wrong with you? When suggestions are proposed that REDUCE THE FUCKING DEFICIT but do not completely eliminate it on the spending side, do you blow them off because they don’t *completely close said deficit*? Should we AVOID reducing the deficit by, say, ten billion dollars because this is not *sufficient* to complete the job? You know what else won’t eliminate the federal deficit – raising the SS retirement age, or means-testing medicare! Whoops, time to abandon ship, huh?

    Earth to you, doug – most progressives are AWARE that most proposals mainstream involving reducing the deficit by taxing the >250L do not COMPLETELY ELIMINIATE the deficit. Nevertheless, we are led to believe – by people like you – that REDUCING the deficit is GOOD. So we remain in favor!

    Sorry to curse and shout, but i am so sick and tired of the repetition with which you repeat this stupid canard. Your columns come off as special pleading to avoid raising revenue on the rich because, in your opinion, we can’t raise enough revenue to reduce the deficit as much as you, personally, think is neccessary. Not everyone agrees with you about how much the deficit needs to be reduced, and we definitely don’t agree with you that those who feel the least loss from a dollar of lost revenue should be allowed to skip out on the sacrifice because they might not be the only ones who have to suffer.

  42. jan says:

    @ponce:

    Federal taxes were the lowest they’d been in a century when our current economic troubles began. Why don’t the fringe right apologists for the rich ever mention that?

    It was the sub-prime mortgages, deceptive lending practices pushed by dems who wanted equal justice in the housing market, whether one could afford the cost of a house or not, compliant banks, all escalating under the democratic Congress during the last years of the Bush Administration.

    Consequently, lower taxes couldn’t help compensate or buffer the meddling, inept, socially progressive policies of the democrats in charge of Congress.

  43. ponce says:

    Shorter Jan:

    The global economic meltdown is the fault of a few poor black families that got some help from the government.

  44. john personna says:

    @jan:

    It was the sub-prime mortgages, deceptive lending practices pushed by dems who wanted equal justice in the housing market, whether one could afford the cost of a house or not, compliant banks, all escalating under the democratic Congress during the last years of the Bush Administration.

    Do you really think it helps you to make arguments that can be defeated by a couple google searches?

    I guess Drew likes you because you have a club. You say things that you know in your hearts are false, but you get the high-five anyway. You feel good. And probably a little dirty.

  45. glasnost says:

    What it will ‘start’ is discouraging capital from coming back into this country, further eroding our chances for job start-ups. And, any more revenue gleaned from over taxation of ‘rich’ people will be nullified by an over-all decrease in taxable revenues.

    You know what you remind me of, Jan? You remind me of a mid-level official in, say, the Qaddafi regime who might have been asked to contribute to, say, the Arab Spring, only to respond that any attempt to right the wrong – any wrong – would only make things worse. Your voice is the voice of the privledged few who sit atop the gravy train. And from atop the gravy train, well, why rock said train? After all, any changes might not work out well, for your selfish, resentful little life.

    Out in the real world, we have the lowest taxes on wealthy individuals in the first world. I have this feeling that said wealthy individuals are not likely to pack up and hike off to, say, Russia, or perhaps central africa in order to hold onto every nickel of their unearned existence. Because they’re not, in fact, complete jerks, and because the societies that do an even poorer job of taxing wealth correlate amazingly with ugly and dangerous places to live.

    I have a little more faith in the wealthy than you. Correspondingly, I have a little less obsession with this one-size fits all approach to policy – suck up to the haves as hard as you possibly can until something rubs off on you.

    It’s a good thing too, because the day the rich actually do start corresponding to minor raises in revenue collection with packing up and moving, we are, as a global civilization, screwed. Civilization costs money. And you can’t raise it from the people that don’t have it, because they don’t have it. You shirk your responsibilities as a citizen and you destroy – not to mention spit on – that very civilization without which you, born into say, Somalia, would live a life of living hell.

    Man up and pay now. Or pay later.

  46. glasnost says:

    wanted equal justice in the housing market, whether one could afford the cost of a house or not, compliant banks,

    Someday, you may actually read something which may help you to understand that the ‘compliant’ banks made a lot of money selling homes to people that couldn’t afford them. the act of purchasing a home generates a lot of side costs. Also, lying about the quality of the mortgage, and then selling it to foolish or cynical investment houses, makes people a lot of money. There’s absolutely nothing about government requirements that made this happen. No step in the process of making money off poor people’s naivete buy selling them unaffordable houses, lying about the costs, and then dumping the risk on other people require a government incentive. It’s as natural as selling overinflated tech stocks with laughable business plans. It’s as natural as pushing crank goldbug theories on Fox News.
    There’s a lot of money to be made lying to people and exploiting their ignorance.

    The downside of literally destroying the financial system with the end of your Ponzi scheme was of no concern to them. And apparently you don’t care either, because, in part, stuff like this is your fault. Your myopic insistence on blaming government for the simple, everyday person-to-person scam – albeit happening on a massive, corporately-homogenized scale – is what will allow it to happen again. And again. People like you are the reason the Republicans are daring to boycott the CFPA, fight to weaken the SEC, and so on. Because you cling to a comfortable delusion that allows you to blame the problems on people you don’t like anyway.

    By failing to open your eyes and think beyond a pocket of simplistic greivances, you are failing as a citizen.

  47. glasnost says:

    I have responded to the Bill Clinton example twice now.

    But you failed.

    Clinton raised taxes early during his first term. What he got from that move was two/thirds less revenue than was expected.

    What he didn’t get was a rash of capital and rich people fleeing the country. I don’t know what revenue anyone “expected”, nor do I much care.

    He later on said he shouldn’t have raised taxes so high.

    I don’t care.

    I have responded to the Bill Clinton example twice now.
    Afterwards, he lowered taxes, and the economy grew.

    That’s nice. It’s also kind of irrelevant. It boils down to “he raised taxes, and the economy grew. Then he lowered them, and the economy grew”.

    You shouldn’t be trying to defend this stuff. You, yourself, if you were an honest person, should be looking at your own statements, and understanding what you are failing to prove.
    You started with a statement about rich money and jobs fleeing this country forever, and thus taxes on the rich prevent economic recovery. Bill Clinton’s example is entirely contrary to this fairy tale. Until you can start by acknowledging that Bill Clinton’s tax hikes did not hinder the economic recovery, people who already know this are going to continue blowing you off.

    We’re not stupid. We notice it when you have a serial problem with being able to acknowledge that you could, in fact, be wrong, or that events do not at some time and place correspond with your stories.

  48. jan says:

    @glasnost:

    There’s absolutely nothing about government requirements that made this happen.

    The government leaned on banks to be more lenient in their lending requirements to unqualified people — it was a tactic that was supposed to level the home-buying playing field without any consideration of the down-the-road unintended consequences that happen with these kind of market manipulations.

    As for the rest of your discourse, it is way too over the top…unmanageable in it’s ideologic content. So, you just keep on believing what you want to believe, because nothing is going to change those glued brain cells.

  49. steve says:

    “But, I did forget about the capital gains cut……hmmm, why don’t the socially progressive dems ever mention that when they are extolling the merits of raising taxes and how that will help the economy?”

    Because they dont do much. Those same cuts are in effect now. Why arent they working?

    Steve

  50. anjin-san says:

    deceptive lending practices pushed by dems

    So then, Democrats put a gun to Angelo R. Mozilo’s head and forced him to make over 100 million in 2007 writing loans he knew would fail.

    And the mortgage brokers I used to hear at the bar in 2006, laughing about the loans they wrote that day for 400k to people who could not afford a 30k car, then saying “F**k it, who cares. I am making 20k a month”. Barney Frank personally forced each and every one of them to do it.

  51. anjin-san says:

    unmanageable in it’s ideologic content.

    In others words, you can’t refute it and you are not woman enough to admit it 🙂

  52. Scott O. says:

    @jan:

    Clinton raised taxes early during his first term. What he got from that move was two/thirds less revenue than was expected.

    You’ve made this claim on several occasions. According to a 1998 CBO report you are incorrect.

    “The provisions of OBRA-93 combined to increase revenues on net (see Table 16). JCT estimated that OBRA-93 would raise amounts increasing to about $60 billion per year by 1997. Although CBO included the estimated revenue effects from those tax increases in its September 1993 revenue baseline, actual revenues exceeded those expectations (see Table 17). In 1995, actual revenues were $20 billion (1.5 percent) above CBO’s September 1993 baseline. The amount of the unexpected revenues continued to grow rapidly, reaching $174 billion by 1998. Much of that forecast error can be attributed to economic growth that was stronger than expected, but the sources will be largely unknown until data on tax returns for 1997 are released. ”

    http://www.cbo.gov/doc.cfm?index=1049&type=0#pt13

    @Drew:

    The so-called Clinton economic miracle started – after a dismal 1992 – 1996 period – when the Repbublicans took hold of Congress and brought forth the prospects of expense control and…………Clinton cut capital gains tax rates.

    The capital gains tax cut took effect in 1998. Looking at this graph, I don’t see a dismal 1992-1996 period and a big change after 1997

    http://www.indexmundi.com/united_states/gdp_real_growth_rate.html

  53. David M says:

    @jan: In your scenario there, why were loans from banks where the CRA was enforced less likely to end up in default? Banks that were not subject to the CRA requirement were more likely to have issues loans that ended up defaulting.

    Why? Because the government/dems pushed the banks to make risky loans theory is not remotely close to the truth.

  54. Eric Florack says:

    @anjin-san: I left my laptop computer out where it could be stolen. Someone stole it. By your lights, I forced them into it?

    Seek help.

  55. anjin-san says:

    Seek help.

    Ok, but first you have to learn how to read.

    The point is that even if you accept the very questionable position that the Democrats opened the door to the doomed loans that created the real estate bubble, the downstream parties had choices about how to proceed, and many of them chose the path that lined their own pockets, at the cost of great harm to the economy and society as a whole. They ignored their professional obligations and said “show me the money”.

    WAMU CEO Kerry Killinger put heavy pressure on his mortgage department to make predatory loans. Why? Because they are the most profitable. Not because Jimmy Carter somehow reached out across decades of time and forced him to.

    You know, in the past, I have told people that you are not stupid. I am going to have to rethink that.

  56. An Interested Party says:

    As for the rest of your discourse, it is way too over the top…unmanageable in it’s ideologic content. So, you just keep on believing what you want to believe, because nothing is going to change those glued brain cells.

    Ha! This from jan, of all people…that’s rather rich…

  57. Lit3Bolt says:

    @glasnost:

    You seem quite envious!! I can literally taste your envy for the rich, it’s leaking from your every pore. Doug’s solid intellectual position is unassailable.

    The Republican/libertarian position, as I have observed from these threads, is thus:

    1. The deficit must be paid.
    2. The rich(er) must not be taxed.
    3. The poor(er) must suffer more to pay the deficit.
    4. The poor must depend on private charity.
    5. All regulation and oversight must end before business can make money.

    Doug, just admit you want to turn back the clock to the 1890s, I’ll take you more seriously.