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Tea Party Money-Bomb Elects Scott Brown, Blows-Up Obamacare
Six months ago the vocal factions of the Tea Party revolt organized among anti-Obama right wingers were mostly an annoyance to the Democratic Party. Today the Congressional Democrats are scared for their political lives after Scott Brown, with the help of a Tea Party organized online "money bomb" and get-out-the-vote campaign, won back for Republicans Ted Kennedy's former Massachusetts senate seat. The "money bomb" is a tactic borrowed from MoveOn and the liberal netroots movement through which the Tea Party activists raised way over one million dollars online in 24 hours for Scott Brown. Even though the Republicans have only reduced the still large fifty-nine member Democratic senate majority by one person, the fact that Brown ran an uphill campaign that came from nowhere and steamrolled to victory means that all the Congressional Democrats are now looking over their right shoulders, fearing a similar populist attack as the 2010 electoral season heats up.
The Tea Party money bomb has also blown up Obamacare, the President's muddled health care reform plan. While many pundits point to local issues that helped Brown win, the fact is that Brown ran hardest against Obama's health care bill, and won despite personal appearances in Massachusetts by Obama and Bill Clinton, and despite a desperate but failed Democratic effort to beat back the insurgency.
Freedomworks and other groups behind the Tea Party populists have long claimed that they would create the Right's equivalent of MoveOn, and they have. Indeed, the best efforts of MoveOn and Obama's much-touted but very ineffectual Organizing for America to rescue the Massachusetts senate race failed miserably. The grassroots political momentum in the country is now with the right wing populists who have tapped into a great disillusionment with Obama and his Democratic Party. Indeed, given the inevitable political stalemate this stunning Republican upset will cause in Washington, the most interesting political action in 2010 is going to be found in examining what takes place at the grassroots among populists of both the Left and the Right. Can the progressive Left once again become a force for change in America, or will it continue to take the role of cheerleader for Obama and cede the grassroots to the Right?
How ironic that smug Democrats in the Administration refused to allow the single payer, medicare-for-all option to even be considered as a possibility for America. They declared it off the table, pushing a "public option" plan that was quickly jettisoned by an Administration happy to cut deals with the drug and insurance lobbies. The result is a massive mess difficult to understand with shrinking public support. It was hung like an albatross around the neck of Martha Coakley, the loser in the Scott Brown race.
If the Obama Administration had embraced the single payer option -- some type of which is in place in every country that does have universal medical coverage -- it could have ignited the Democratic grassroots and educated the public. Instead, the health care debacle has become a massive political train wreck, and Barack Obama's Democratic Party is pinned in the wreckage.
46 Comments so far
Show AllIt will be interesting to see how long the current train wreck of a health care system we have in this country can be maintained. The cost of it is rising much faster than peoples salaries so it is unsustainable, and the two parties are completely incapable of fixing it. It is going to be interesting to see how it plays out in the end.
So they tried to pass another train wreck of a Healthcare "Reform" Bill, which turned out to be just as bad, if not worse than the one we've already got in place. NO healthcare "reform" bill would've been better than that rag of a healthcare "reform" bill that they've been trying to get passed. The Democratic Party at large, including President Obama totally blew it, the GOP, including Scott Brown, rode on the coattails of people's frustration, concern and anger over the Healthcare "Reform" Bill, and got himself elected to the MA State Senate. We'll be paying for this as a society for a long, long time to come.
The words "train wreck" are in the article, and in the first comment above mine. Which is interesting, since America - as it is now - was re-built after World War Two on the **intentional** destruction of the train network that worked so well in getting average working people around at very little expense.
Single payer health care is a lot like five-cent streetcars - something that the corporations that sell cars and private health insurance will never allow as long as they maintain a stranglehold on governance.
Rather than meeting America's needs for health care (and inexpensive transportation), the corporate tyrants prefer to use advertising and entertainment to lull the public into the self-abusive consumption of gimicky products like private health care and private automobiles.
John, learn from this failure of the Democratic Party. It's dead in the water, shooting blanks. The Tea Party represents vast dissatisfaction with the faux change in Washington. It is sadly an authentic response to a heath-care reform bill that promises to enrich insurance companies and pharmaceuticals while pushing the working poor closer to poverty.
Join us John, in forming a new party of progressives to counter the right-wing populism of the teabaggers. The Democrat Party has shot its wad I am afraid, no hope of real reform there. They've sold out to the highest bidders.
Gary
The GOP has been unchallenged for the last year. The only action they support is legislation that reduces taxes on the rich and loads the entire burden of government on the non-rich. The GOP has proposed nothing else. They have screamed "NO" on every proposal without being required to offer any alternatives. Candidates for this fall must be smoked out and forced to make promises other than "I will oppose".
Democrats have got to quit making deals. When opposing extremism, only extremism will win. The Democratic party has attempted since 1980 to be the centrist party. When you sit in the middle and attempt to compromise, you wind up on the conservative side. For the future of this nation, the Dems have got to pull the movements back to the left so that the end result is closer to the middle. They have to do this with Obama's leadership while he is still personally popular. If he does not, the GOP will regain control of this nation and make the Cheney vision a reality.
Yes, brand Obama is about the only asset the Dems have that is still viable and unless the Dems start using that brand to do the peoples' work rather than to expand corporate control, they will become redundant.
It will be interesting to hear where Scott Brown's money REALLY came from in the coming months. The author should keep in mind that while we were told Obama's money came from small donations, once the dust settled, it was perfectly clear that Obama's donations were coming from Wall St., investment bankers, health insurers and lobbyists. I would imagine when the dust clears, the "money bombs" will be just another B.S. news story, and the bulk of Scott Brown's money will have come from the same places as Obama's.
"some type of which is in place in every country that does have universal medical coverage -- it could have ignited the Democratic grassroots and educated the public"
So let me get this straight,
1) America is second to "every country"?
2) The Democratic grassroots believes that the public is stupid and needs to be educated?
Maybe the American Public is tired of being belitted by "Educated Dems/Libs/Progressives"
Even uneducated Canadians understand the advantages of single payer health care.
This is not a case of elitist leftists judging the working man a fool.
This is a trolling post to get someone to correct your obvious reading comprehension and spelling mistakes right?
Thereby proving your "point" about "Educated Dems/Libs/Progressives", right?
Sad.
Dare you to admit I'm right.
I resigned as a Democrat and registered as an "unaffiliated voter" a couple of weeks ago. My response is not, I think, atypical of the current disillusionment that resulted in the election of a Republican to Edward Kennedy's seat in the Senate. There is no other explanation for the election result in Massachusetts, where Democrats hold a wide margin in registered voters. The disillusioned Democrats sat on their hands and stayed home. GOOD FOR THEM!
The message to the Democratic Party is clear: the wave of enthusiasm that elected the first black president in US history has been betrayed in the name of bipartisanship. Obama kissed the asses of the Blue Dogs and Joe Lieberman and got farts and the finger in return. The failure of Obama to fight for change from the very start has given credibility to the right wing forces that were in utter disgrace following Bush's lying us into the Iraq War and his failure to regulate the financial sector causing the Great Recession.
IMO, Obama should have let the too-big-to-fail banks FAIL! This was the change I and a hundred million voters deserved. Likewise Obama betrayed us by taking single payer health care funding off the table from the start - despite having acknowledged it as the right policy.
Obama caved in to the corporate domination of his administration without a fight. He and those who continue to support him deserve what they got in Massachusetts. And they deserve what's coming in 2010: a swing to the right that will produce catastrophic suffering for working and middle class people in this country. Perhaps then we will find the courage and the leadership to throw off the shackles of corporate, big money domination of our political process.
Very well said.
The Clinton and Obama crowd seem to specialize in mobilizing the Right Wing rabble against us The People. The triangulators today call that HOPE and CHANGE YOU CAN BELIEVE IN!
"specialize in mobilizing the Right Wing rabble against us The People."
Are the right wingers not part of "us The People" or is only left policy apart of "The People"?
That depends upon the Right. Tax cuts for the rich are tax cuts for the rich, no matter how you try to spin them. That's pretty poor representation of "the People".
Yes, I believe progressive taxation serves "the People" ...
"Yes, I believe progressive taxation serves "the People"
If you could explain more on this? I'm fascinated with the thinking that is behind this theroy.
It's not just "theory". The period from 1945-1980 was far more stable for the American economy, and produced far more economic progress for ordinary people. Since about 1980, common people have actually lost ground economically. Everyone but the small rich minority has lost ground.
Libertarians like to talk about their "theories" of the "free market" and "flat taxes". I'm afraid the actual experimental results don't bear them out. The fact that they can't face plain experimental results says loads for their detachment from reality.
Don't get me wrong. I suspect the 90% top tax rates under Roosevelt were probably too high. Kennedy wanted to drop them to 50% and settled on 70%. Reagan got them to 50%, but then pushed them still lower, as did Bush. The results have not been pretty for the great majority of people.
I also still read supply sider Paul Craig Roberts, the Father of Reaganomics, and I often agree with him. But even he thinks things are out of control. He also backs single payer healthcare, incidentally, and opposes US military involvement in the Middle East ...
The wealthiest 1% of the country once owned 20% of the country. 30 years after Reagan, they now own 50% of the country. The fraction of the nations income going to the wealthiest 0.1% of the country has quadrupled in the last 30 years, even as the fraction of the nations income going to the poorest 90% of the country has fallen by 20%.
I believe a return to 90%+ maximum marginal income taxes is overdue. This leaves the wealthiest Americans making $3 million a year (to be taxed at the lower rates), and the excess over this being essentially taken by the gov't. Unfortunately, the alternative to this is to pay the $12 trillion national debt ($11 trillion of which was created by Reagan and Bush and handed to Obama last January) by dropping SocSec, or (more probably) inflating the currency until working people make peanuts even though their pay never dropped. But, I'm practical and know this will probably not happen.
The period you mentioned, 1945-1980, now appears to be a Age of the Greatest Generation, staunchly pro-labor, deeply suspicious of the wealthy and of bankers and financiers, they created the best America that could be. Their form of capitalism is called 'managed capitalism' by economists, although if we tried to return to it Faux News, Bill O-Reilly, and Glenn Beck would all call it Marxism in todays parlance.
I think the philosophy behind wealth redistribution can be summed up thusly: the problem isn't the rich, its the filthy rich. The merely rich need to make a 10% return on their net-worth to avoid working, the filthy rich need to make a mere 1% return to avoid working. A 10% return is money invested properly and prudently: this required hard work and knowledge, and is going into investments that are growing the economy. A 1% return is money that is being misinvested, its basically being 'parked' into assets that will keep their value. The reason the filthy rich make poor returns on their investments is because they can: making high returns is, as I said, harder. Thus, as wealth concentrates into the hands of the few, the number of eyes monitoring capital investments drops, and money becomes misinvested. We can, and do, blame the housing and derivatives bubbles on lack of gov't watchdogs doing their job. This is true, but fundamentally, its because the owners of capital just DIDN'T CARE. They bought 'sexy' investments because even if they lost their shirts they would still be rich beyond all reasonable bounds. Owners of capital weren't watching (because they are already filthy rich), government wasn't watching, hence the only ones watching these bubbles form were the banksters creating them.
Wealth redistribution keeps capitalism healthy. Concentrated wealth leads to misinvestment. This country can no longer afford such misinvestment.
Need I go on about what concentrated wealth (what I call 'idle wealth') does to our political process?
If it came to top tax rates of 90% vs. having to cut entitlements like Social Security, I'd agree with the 90% rates. Top tax rates now are *so* low that it may not require that high a rate, however. But the rich should understand that if they continue to press to cut entitlements, as many are doing, a 90% rate is a real possible response.
I also agree that massive amounts of excess money can lead to raw, wasteful speculation, as opposed to sound investing. We'll see. Kennedy felt 50% might do it.
I think we have no disagreements over the basic principles.
I retract my more cautious comments below about 50% top tax rates possibly being high enough. Today's Supreme Court decision on campaign contributions by corporations so strongly illustrates the dangers of extreme wealth to the political process, that I now concede that at least a temporary period of top tax rates of at least 90% is needed to break the power of the ultra wealthy. Once that is done, it may become possible to lower rates ...
" The period from 1945-1980 was far more stable for the American economy, "
Consider who the US was competing against during that period: Vast parts of the globe devastated by the war, along with the failure of communist economies.
"Libertarians like to talk about their "theories" of the "free market" and "flat taxes". I'm afraid the actual experimental results don't bear them out. "
There are no "experiments" in economics, only the *actual* Economy. Attributing cause and effect relationships can be very difficult. As an example, in ignoring war devastated economies and failed communist economies above you think you can point to tax policy as a sole cause.
It is a mistake to not recognize that a tax on something is a disincentive in the markets for that something, and that when tax policy changes, individuals with skin in the game *react* to those changes.
"There are no "experiments" in economics, only the *actual* Economy."
I disagree. The New Deal was an experiment and we had long term results. Reaganomics leading to Greenspan and Bush (W.) economics (which Paul Craig Roberts condemned) was another approach, leading to different results. Factors may be all entangled, I realize, but I lived through almost all this (including several stints on Wall Street), and basically stand by my statements. If I wanted to add other factors, I'd include deregulation, "free trade", and numerous military involvements (all also condemned by Roberts as they evolved). The weakness of the rest of the world following WW-II was a two edged sword, since we expended large fortunes rebuilding parts of it, while we were the largest market.
I would also think much of what you are addressing is more applicable to corporate taxes, a different subject.
As far as the failure of Communism goes, it's not clear that it failed in China, but rather evolved, perhaps to our chagrin.
I'm not convinced that disincentive for extreme personal wealth is a negative. Again, we did better as a whole when such disincentives were stronger.
"The New Deal was an experiment "
No it was not, not in the strict definition of the term, because there is no *control* method, such as when a placebo is used in a clinical trial. This is a fact, that Economics is a social science and not a hard science like physics because there are *no* experiments or labs.
"Factors may be all entangled, I realize,"
Good, don't forget, see below.
"I would also think much of what you are addressing is more applicable to corporate taxes, a different subject."
Taxes are always a disincentive on the thing taxed.
"it's not clear that it failed in China, but rather evolved, perhaps to our chagrin."
The "evolution" is towards capitalism and entreprenuerism and away from communisim.
"I'm not convinced that disincentive for extreme personal wealth is a negative."
In the case of earned income, you are talking about discouraging productivity via oppressive tax policy by individuals sought after specifically in the marketplace for their unique talents. This can only reduce overall economic activity especially when considering the usual multiplying effects.
" Again, we did better as a whole when such disincentives were stronger."
But you don't *know* cause and effect for sure, as I pointed out and you admit.
(For more detailed refutation of your argument, see my post: matti January 21st, 2010 12:18 am, below)
Your axiom is correct, but your analysis of the impact of that axiom on the real world of history is incorrect, my friend.
Axiom: "Taxes are always a disincentive on the thing taxed."
Of course! Unless one is more motivated by forced contribution than personal gain this does "always" hold true.
But the question that this axiom asks of us when we attempt to apply it to the real world is:
WHAT, exactly, IS "the thing taxed"?
In the case of U.S. progressive income tax -both now and in the post-WWII boom- "the thing" is MOST CERTAINLY NOT "earned income" as you wrongly -and repeatedly- state, but in fact TAXABLE earned income.
Once this truth of history and the world today is admitted, then it becomes obvious that such progressively rising tax rates are only harmful to productivity (let alone "oppressive") if they do not allow exemptions for earned income that is then invested or donated.
Since the actual situation during the U.S. period of effective progressive taxation DID ALLOW for such exemptions, any argument of yours that follows this FALSE analysis can therefore be tossed out.
Individuals would only prefer giant wads of untaxed cash over reasonable wads of taxed cash and the opportunity to invest in society or enterprise (for long term self gain!) in an economy that has left the bounds of productive activity for the doomed path of speculative bubbles and market-as-feeding-frenzy.
The post-war's sustained boom (for most)versus the last 35 years' "bubble-boom" (for the few) then crash (for most) prove well which course is wisest.
-matti.
" "the thing" is MOST CERTAINLY NOT "earned income" as you wrongly -and repeatedly- state, but in fact TAXABLE earned income."
Earned inccome that is taxable is still earned income. I don't see that your distinction makes much difference in my point about taxation as disincentive and the fact that people react to changes in tax policy.
"Since the actual situation during the U.S. period of effective progressive taxation DID ALLOW for such exemptions,"
As does the current actual situation.
"any argument of yours that follows this FALSE analysis can therefore be tossed out."
You miss the fact that I made no analysis, but rather commented on another one given. Specifically, it ignored and seemingly so do you *other* important factors regarding the competetiveness of the US economy on the world stage against economies devastated by communism and war ruined infrastructure.
"The post-war's sustained boom (for most)versus the last 35 years' "bubble-boom" (for the few) then crash (for most) prove well which course is wisest."
No it does not, because of the lack of control that I mentioned before. The "history" does not constitute a valid "expirement". There are no such expirements in economics, so cause and effect analysis is very problematic.
Somebody had better tell the astronomers they're just wasting their time studying the "history" of the universe then. Seems that they won't be able to draw any valid conclusions ...
"If all economists were laid end to end they would not reach a conclusion."
- George Bernard Shaw
"Somebody had better tell the astronomers they're just wasting their time studying the "history" of the universe then. Seems that they won't be able to draw any valid conclusions ..."
Astromony is based on physics. Light, mass, movement etc. are studied in the lab under controled conditions.
"If all economists were laid end to end they would not reach a conclusion."
Shaw was correct. The same is true with you when you play Economist. Nice talking to you.
I've reached my "conclusions". I'm a physicist incidentally, and astronomy can't all be tested in the local lab. And I say it's as valid to draw conclusions from history on economics as it is to draw conclusions on the universe from studying its history, both without control cases. At any rate, my point concerns learning from history, something we have to do our best to achieve or we're in real trouble. Your attempt to challenge that basically tries to negate the general learning we all go through as part of the human experience because it won't fit into your detailed economic models clearly. You refuse to try to see the forest because you're focusing on the trees. Experience is as much cumulative art and intuition as it is science. If it weren't, we'd have made little progress in history. We'd have spent all our time arguing details, like we are here. :-D
In other words, at some point, somebody has to make decisions, probably on intuition and hope as much as anything, whether or not the detailed models are complete and agree, or are "problematic" instead.
Enjoyed the conversation also. Try it again sometime ...
"astronomy can't all be tested in the local lab."
I know that, but the phenomena measured via light, infrared, megnetism, etc. all can. That's how they developed thos instruments.
"Your attempt to challenge that basically tries to negate the general learning we all go through as part of the human experience "
No, my challenge was around the idea that Economics is a *social* science in contrast to physics or astronomy, so cause and effect are hard to determine. It's completely different, and if you are what you say you are this should be obvious.
"because it won't fit into your detailed economic models clearly. "
But I'm not the one who offered any analysis about 1945-1980. I only offered caution around factors that were obviously not considered in someone else'a analysis.
"at some point, somebody has to make decisions,"
Right, and when it comes to Economists they *famously* disagree. Have a nice weekend.
"(The New Deal was an experiment) -- No it was not, not in the strict definition of the term, because there is no *control* method, such as when a placebo is used in a clinical trial. This is a fact, that Economics is a social science and not a hard science like physics because there are *no* experiments or labs."
Wow! You just proved observational cosmology is not a science because they can't set up controls against which they can compare their observations. I guess we'll need another universe beside ours to draw any scientific conclusions then ...
"You just proved observational cosmology is not a science because they can't set up controls against which they can compare their observations. "
Your misunderstanding is obvious. Your example a based on physics. Light, mass, movement, etc. can all be looked at under laboratory conditions. There is no analogy to the *Social* science of Economics in the example.
"In the case of earned income, you are talking about discouraging productivity via oppressive tax policy by individuals sought after specifically in the marketplace for their unique talents. This can only reduce overall economic activity especially when considering the usual multiplying effects."
We're talking about increased taxes on very high incomes only. I did work around individuals like that from time to time. They were usually far more impressed with their "talents" than seemed to me to be justified, as good as they might have been. I'm not as convinced as you may be by such "productivity". A lot of it is unchallenged ego and "press". Indeed, one was actually unmasked as an impostor after he made one too many enemies. I saw a lot of very genuine productivity at lower incomes too, usually by people whose only lack was a lack of enough outsized ego to demand more money. Such situations may be made more equitable by progressive taxes, with little impact on actual productivity. Indeed, the improvement in general morale for the lower paid "talents" may actually *increase* overall productivity, something I suspect was very much a factor during the 1945-1980 period. But that's my "real world" experience, not academic theory.
"The meek shall inherit the Earth."
"They were usually far more impressed with their "talents" than seemed to me to be justified, as good as they might have been. I'm not as convinced as you may be by such "productivity". "
You are entitled to your opinion, but the fact is that huge checks are cut all the time for the talents of certain people, and I find it very hard to beleive that anyone behaving rationally would simply "waste" money that way if the talent weren't real. If you can provide some model outside free market principles to explain this common practice I'm all ears.
It's called "cronyism". I don't know if there's a model for it, but real corporations, particularly large ones, operate on buddy systems, political coalitions for mutual advantages. A lot of money can change hands in such circumstances for the sake of the politics, which can also delay a day of reckoning to correct it. Such corrections sometimes do catch up with the players, but a lot of damage can be done first. I've seen it firsthand, both the cronies, and the eventual day of reckoning. And unfortunately, the more money there is at stake, the greater the temptations become. It's all quite rational, just not rational under free market principles, but rather under local political buddy principles.
I suspect there are models to try to explore these effects. I just don't know of them.
"It's called "cronyism". I don't know if there's a model for it,"
Well, the only mechanism I have heard that sounds reasonable is an Interlocking Directorate. These are legal when approved by the stockholder votes. But if you want to use that line, you have to specify it case by case, i.e., name names on the boards in question and explain why it constitutes an Interlocking Directorate. I've never seen that done, it would be a great task for an investigative journalist.
Along with MuffOn, first with Bush's, then with Pelosi's off-the-table Bush three-way and finally with Bush-Shadow Obama's NAPPYS (No Account Presidency and Party of Yoo're Screwed)! Bon Apetit!
To RVingRetiree,
So explain why the rich should be taxed more and the middle class less? If I was in that small rich minority I would want to pay myself more because of the fact that I'm getting taxed out the a$$. So one way of making more is to just pay myself more and leave everyone else at the bottom. Or is my thinking on that backwards?
T Boone Pickens wrote a book and its title unintentionally answered your question: "The First Billion is the Hardest". The title is accurate, it is MUCH easier, in current circumstances, to make money from money than from labor. Thus, in this era of low progressive taxation, wealth concentrates. The wealthiest 1% of the country, who once owned 20% of the country pre-Reagan, now own 50% of the country, even as the rest of the nation is much poorer (with incomes that have shrunk in real value by about 20%). Is this bad for the nation? I think so. Concentrated wealth is what I call 'idle wealth', subject to a variant of the saying 'Idle hands are the devils playground'. Having nothing to do, it does nothing good. It corrupts politics and the media, insisting that the public at large pray to Mammon. It becomes misinvested in dotcom bubbles, housing bubbles, derivative bubbles, whatever the next, new, 'sexy' thing is, because it doesn't really care to be properly invested (which requires real work on the part of the owner). This hatches bubbles that later pop, sinking global economies.
If you compare the 'Age of Reagan' to the 'Age of FDR' which preceded it, I think a powerful argument can be made for the 'managed capitalism' that prevaled during the prior Age, including its rather stringent progressive taxation scales. I can't even imagine the current Age flying to the moon ala Apollo (while at the same time fighting a major war in SE Asia). It can't even seem to dig itself out from a pile of Reagan/Bush debt. Its addicted to other peoples credit cards, and its credit is about run out.
I suggest you go to your local library or do an online search for Carnegie's "Gospel of Wealth," which outlines the responsibilites of the rich to the society that MADE them rich. Perhaps you'll have an epiphany. Here, I even did the search for you, http://www.swarthmore.edu/SocSci/rbannis1/AIH19th/Carnegie.html
I think the other posters have suggested a lot of answers to this ...
Why are you guys falling for this poster's crap?
"The rich" ARE MOST CERTAINLY NOT "taxed more" than "the middle-class" or ANYONE ELSE under progressive income taxation!
Surely we all remember that it is the INCOME which is taxed, not the PEOPLE?
Example:
1. Tax rate for income up to $30,000 is, say, 10%.
Tax rate for income from $30,001 to $60,001 is, say, 15%.
2. Citizen A earns exactly $30,000 (for simplicity's sake) of taxable income this year.
Citizen B earns exactly $60,000 of taxable income this year.
3. How much do each of these Citizens owe in taxes this year?
Answer step 1. Citizen A pays ONLY at the 10% rate, so, 30,000 x 0.10 = $3,000
Answer step 2. Citizen B pays 10% on the FIRST $30,000 they earned AND 15% on their earnings from $30,001 to $60,001, so, (30,000 x 0.10) + (30,000 x 0.15) = 3,000 + 4,500 = $7,500.
According to the way "JAH" would have it, this would seem unfair, because Citizen B pays 2.5 times as much in taxes as Citizen A although they only made 2.0 times as much.
So the question that always arises from this misunderstanding is "doesn't this disincentivize Citizen B from earning more income, and doesn't this then hurt the economy?"
The answers to this are no, and NO!
Citizen B is NOT disincentivized to earn more income, they are disincentivized from reporting more TAXABLE INCOME. Reducing TAXABLE INCOME does NOT mean reducing ACTUAL EARNINGS, it means reducing earnings considered TAXABLE.
The upshot of this is that anyone who finds their earnings above a certain threshold in a given year is INCENTIVIZED to transform those earnings from taxable to tax exempt.
Common methods of tax exemption are INVESTMENT and DONATION.
Which is the reason that progressive income tax taken seriously provided such social AND capital benefits to the U.S. in the fifties and sixties.
Only a total idiot would ACTUALLY PAY 90% on their top income!
Instead they would invest that in a university endowment or in capitalizing a new enterprise or some such, and in doing so STIMULATE the economy toward further growth and thereby provide themselves with a (reasonable and eventual) increase in wealth.
Progressive income tax is PRO-GROWTH -both economic and social. Anyone who says this isn't so is either lying or massively mistaken (or paying to much attention to B.S. information).
The post-WWII boom in the U.S. CANNOT be soley attributed to the U.S.'s intact wartime physical and financial capital relative to the rest of the industrial world. Without the truly progressive income-taxing of the period and the resultant reinvestment of both corporate and personal profits, the boom would have been neither as large nor as lasting.
With the tax rates and loopholes that exist today in the U.S., the "boom" would have been for the elite only just like "boomtimes" in some Banana Republic!
-matti.
"The upshot of this is that anyone who finds their earnings above a certain threshold in a given year is INCENTIVIZED to transform those earnings from taxable to tax exempt."
But that doesn't negate the disincentive on taxable income such as when one sells one's labor. Labor produces wealth.
"Common methods of tax exemption are "INVESTMENT"
Like with capital gains say. Do you think reducing or eliminating capital gains taxes would get much support in these here parts?
"The post-WWII boom in the U.S. CANNOT be soley attributed to the U.S.'s intact wartime physical and financial capital relative to the rest of the industrial world."
I tend to agree not "solely", but would love to hear your evidence as to the magnitude of that factor.
Stauber's article is a timely reminder of the fascism germinating in the US body politic, incited by the inevitable betrayals of the "liberals" (reformists). The Teabaggers are indeed "populists" in the classic sense that designates the "mass basis of fascism," a development of the discontent and confusion of the petty bourgeoisie (middle and lower-middle classes) in the context of late capitalism in crisis. We'll be hearing a lot more from these folks; as also we will witness their cooptation by our real rulers, the corporate capitalist/imperialist elite.
Stop being confused or surprised by this sort of stuff. This article clearly explains what's going on: http://www.ianwelsh.net/why-democrats-are-doing-electorally-stupid-things/
It's not a conspiracy or stupidity or lack of will power, it's a recipe for disaster but is totally logical. And understanding this, I am sure, will make it possible to do something constructive.
it's simple, folks. as soon as the economy teetered in 2008, people began having basic questions and doubts about the form of our capitalist economy. polls then showed that a sizeable minority of voters under 30 preferred a socialist system. what to do, then, if you're part of the capitalist elite who hears the faint hoof beats of the proletariat from somewhere out in the distance? well, invent a white working class icon like a joe plumber and get him over to uncle rupert to give him a forum for his rants on fox news. poor, underachieving, and angry joe, so typical of those right wingers who rage in the streets, decried redistributionist economics and became hugely popular among latent racists looking for a pretext to slam obama. then, the tea teabaggers appeared, not out of nowhere, but through the monied mediation of the elite interests that so cringed at the same sound of the distant hoof beats. the elites sensed a creeping loss in the capitalist faith, so they had to put a brake on real populism. they spent millions to organize average citizens into a venomous street army that demonized any doctrine save laissez-faire capitalism. the tea partiers achieved their masters' aims by making it seem wrong for people to expect basic economic justice. with carefree abandon, they misused terms like socialism, fascism. dictator, and even communism. their bombast served to divert the proletariat's mind from the true makers of the current crisis, those who would make war and money without end. later rupert murdoch set fox news after acorn. to cripple acorn's funding sources would disempower about the only institution left that can organize the poorest of americans for their political or economic betterment. the threat of real political power in the hands of the poor when the economic system is trembling is something that murdoch and his elite cannot tolerate. if obama had addresed the concerns of these disgruntled folks by using his oratorical skills to put a national spotlight on where the blame belonged, then perhaps some of the unfocussed rage could have been harnessed by a true populist movement. but, obama allowed the progressive groups that got him elected to wither through neglect, as he knew that cultivating their power after they had served his electoral purpose could check him from becoming the corporate and mililtary headmaster that he probably planned to be all along. for that reason, he has not forged a clear line of demarcation between the forces of greed and militarism that produced the national crises and the progressive ideology that could defeat faux populists and underline a new system of values and laws that would make people hope and work for a better day.
I like this description of how and why the "tea partiers" are just stooges for the rich and powerful. At one time it was the "Three Stooges", but now it's more like the 10 Million Stooges.