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Deconstructing a Paul Ryan Sound Bite
Ryan's budget cuts spending that helps average Americans to fund tax cuts for rich Americans.
Rep. Paul Ryan from Wisconsin revels in his reputation as America's ultimate conservative policy "wonk." He plays the part well. At the drop of a hat, the Republican lawmaker can rattle off a stream of stats that make his rich-people-friendly budget nostrums seem almost reasonable.
Ryan's budget cuts spending that helps average Americans to fund tax cuts for rich Americans. (AP Photo)
Last month, for instance, Ryan smoothly dispatched an angry constituent who dared challenge the tax-no-rich federal budget plan that has made the Wisconsin lawmaker a right-wing hero. That constituent, speaking at a town hall meeting, had just finished noting he saw "nothing wrong with taxing the top." Ryan saw his opening — and pounced.
"We do tax the top," Ryan earnestly responded. "Let's remember, most of our jobs come from successful small businesses. Two-thirds of our jobs do."
"You got to remember," he went on, "businesses pay taxes individually. So when you raise their tax rates to 44.8 percent, which is what the president is proposing, I would just fundamentally disagree. That is going to hurt job creation."
For Ryan, a perfect sound bite. He made, in seconds, the case against raising taxes on the rich.
The wealthy, that case goes, already pay taxes aplenty. As hard-working — and mostly small — businesspeople, they can't afford to pay more. And if you try to make them, they won't be able to create jobs.
Does any of this hold water? Do we already "tax the top," as Ryan rushes to claim?
The facts: Taxpayers at America's tippy top — taxpayers with the nation's 400 highest incomes — have seen the share of income they pay in federal income tax drop from 51.2 percent of their income in 1955 to 18.1 percent in 2008.
How about Ryan's claim that the president wants to raise the tax rate to "44.8 percent"? Ryan here is blurring the distinction between top "marginal" tax rates, which apply only to a portion of one's income, and a taxpayer's overall tax liability, the total amount that he or she is required to pay.
Our tax code currently sports a top marginal rate of 35 percent, down from 91 percent in the 1950s. But this 35 percent top rate only applies to the portion of one's income over $379,150, not total income. President Obama wants to raise our top rate to 39.6 percent.
Americans also pay a federal payroll tax for Medicare. Under the health care act passed last year, wealthy Americans will soon pay a 3.8 percent Medicare surtax on income over $250,000 they make from investments. Until now, no Medicare taxes have been collected from taxes on investment income.
The health care reform act also puts a 0.9 percent payroll tax on wage income over $250,000, income that has previously gone untaxed.
Rep. Ryan, to get to his "44.8 percent," has mixed all these income and payroll tax rates together, a blatantly bogus exercise, especially because most small businesspeople don't make anywhere near $379,150, let alone $250,000. The actual small business income average is just over $100,000.
Paul Ryan's sound bite smudges another key reality as well: The big money America's rich make doesn't come from "creating jobs." The big money comes from "capital gains," the profits the rich make buying and selling stocks and other assets. These profits currently face only a 15 percent tax.
Few small businesspeople make much money off capital gains. Instead, they make their money when customers in their communities have jobs and money to spend. If the Ryan budget ever gets all the way through Congress — the House has already blessed it — small businesses would have fewer customers with dollars to spend. The reason: Ryan's budget cuts spending that helps average Americans to fund tax cuts for rich Americans.
Paul Ryan's sound bites have shoved what we need — substantially higher taxes on the rich — off the political table. We need to get them back on.
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28 Comments so far
Show AllThis should be simple enough to solve. Allow tax deductions for the rich for funds actually invested to "create jobs". Raise taxes on the rest ...
Back in 1970 when US corporations and small businesses created lots of jobs corporations paid 29% of US income taxes. In 2010 they paid 6% (it would have been a smaller percentage if the US unemployment rate wasn't so high).
By the time Obama, Geithner and Company cut corporate taxes and "reform" the structure of US income tax, corporations will pay far less tax.
Every dollar that corporations are not paying in tax is another dollar the Government will extort from you and I.
The US will continue in its downward spiral to becoming a third world nation unless corporate taxes are restored to 1970 levels.
I am my brother's keeper, that does not entitle me to his labors.
To the world, taking 100% of one's labor is slavery, to the left taking 91% is called a fair share.
How to get/stay elected 101, promise to provide services with someone else's money. Note to politician, don't worry about delivering on the someone else's money part of the promise.
Please remember, the Unites States became an economic superpower to which immigrants flocked without taxing any personal income, (Constitutional amendment changed that around 1913 and the wars haven't stopped flowing since).
I strongly prefer a land of opportunity to a land of entitlement.
Flat tax of 18% no deductions and cap spending at 18% with nothing off the books.
All economics is about the division of resources (all resources are scarce), we are treating our money supply as infinite (just print/debt the stuff). Asking what we pretend is an infinite supply of money to pay for scarce resources will end badly. It is nothing personal, just the way it works, and everyone right or left should be able to intuit that it will end badly.
http://en.wikipedia.org/wiki/Scarcity
http://en.wikipedia.org/wiki/Economics
Actually, the top tax rate was 91% for decades - from the Eisenhower administration to sometime in the 1970s. If I remember correctly, the economy did pretty well at that time, even if Ayn Rand did not think so.
I think it was lowered from 91% to 70% in the kennedy or Johnson years. It stayed at 70% untill Reagan, who lowered it to 50% in 1982 or so. For a few years the rich thought thay had died and gone to heaven with that rate.
Yes it is amazing what government austerity can do for an economy! The % if spending by the Federal government shrunk from around 45% of GDP (1944) to 13% of GDP (1948) and the economy BOOMED!!!
Let's agree to do the same thing now, and we will all be able to watch the economy take off again!!!!!
http://www.usgovernmentspending.com/downchart_gs.php?year=1903_2010&view=1&expand=&units=p&log=linear&fy=fy12&chart=F0-fed&bar=0&stack=1&size=m&title=&state=US&color=c&local=s
It wasn't 91% of all earnings, it was 91% above a certain level far beyond the earnings of most all Americans....
We know that. We all know what "marginal tax rate" means.
"Someone else's money?" Oh, fuck off. Most of the money you're talking about is basically stolen by people in the right places in the economic system.
Most people who earn a lot, whether managers or ownes, don't produce shit, they're only in a position to control resource flows, and can divert resources according to their own interests - either into their own pockets or into projects beneficial for themselves, that's all. This is the essence of modern "capitalism", not markets and stuff. The details of economic organisation (management control as opposed to worker control and thus management controlled surplus absorbtion as opposed to an equitable and democratic type) were in part (and not a small part) designed consciously - and designed for centralisation of power into the hands of managers. (Because if workers could control production more efficiently than "specialised" (ahahaha) management, which they could of course, what would managers be needed for? Read America by Design and Forces of Production by David F. Noble if you want to know more about the conscious decisions that focused on concentration of control in the hands of management, to the detriment of efficiency and very often even profits.)
"Someone else's money" my ass: these leeches only know where they have to go if they want mone without work (because you obviously can't get much of it, or, for a lot of people, even enough, with work). The money they "earn" is mostly not their money - it's their power and control over production, distribution and other organising processes that they can, and do, turn into money. Maybe Newton or Einstein or von Neumann deserved their pay, not sure, but certainly not the richest dickwad CEOs and fake "entrepreneurs" like Bill Gates.
(This is something that seems difficult to accept for Americans who believe in the hard work will lead to a better life bullshit sorry - it's a nice idea, but it's still bullshit: your wealth and success will depend mostly on luck, mostly on luck at birth (family and talent, but overwhelmingly family), and maybe five percent on hard work.)
"All economics is about the division of resources (all resources are scarce), we are treating our money supply as infinite (just print/debt the stuff). Asking what we pretend is an infinite supply of money to pay for scarce resources will end badly. It is nothing personal, just the way it works, and everyone right or left should be able to intuit that it will end badly."
If resource scarcity was the driving point of economics, shouldn't it be able to, you know, optimise use of scarce resources? So how come it wastes so much and is so incredibly inefficient? How come people live in suburbs connected by highways and commute by car, some people even wasting several hours a day (to work in shitty, worthless, meaningless jobs btw) in addition to wasting petrol? How come so much of the US economy is about military production, which is pure waste and nothing else? How come so many of the innovations in recent years like GMO based agriculture are nothing but waste? Here is my answer: economics as it is right now is not about division of resources but it's about disappearing waste - pretending it doesn't happen, "externalising" it. And people who are good at this externalisation, pushing costs onto other people (and not just people) are the "successful" ones. Western values seem to be more and more about pretending shit we don't like doesn't happen, and more generally, about manipulating perceptions of reality, not understanding and changing it. Reliance on lies, deception, manipulation is everywhere, from business (in the form of marketing) to politics (in the form of the election bullshit) to education (studying for tests and not caring about real knowledge and understanding) and even law, where justice is lost against technicalities.
"I strongly prefer a land of opportunity to a land of entitlement.
Flat tax of 18% no deductions and cap spending at 18% with nothing off the books."
Love the obsession with primitive "solutions". The world is more complex than this. There are loads of factors, like intergenerational accumulation etc, all depending on nothing but *luck* that can vomit into this "simple and just" system and can (as it has, if you care to notice) turn a "land of opportunity" into just another land ruled by power and exploitation.
Also, "land of opportunity" seems to mean "land of opportunity to sucker people". Not "land of opportunity for people working hard" or "land of opportunity for nice people" or "land of opportunity for everyone" - no, it's a land of opportunity for sociopaths whose model of production is on the same level as selling the Golden Gate bridge. Wouldn't a "land of opportunity" include the right to be healthy, well educated, to work enough to provide for yourself but still leave most of your life to yourself and your issues? Does "land of opportunity" always have to mean "opportunity to climb over others to the "top""?
To paraphrase, you said I am obsessed with primitive solutions. My response is; "I see your top down approach to the organization of our country as a fatal conceit".
http://www.fff.org/comment/com0902k.asp
Markets are the most efficient way yet devised by man to efficiently/effectively use scarce resources. There is tons of literature on that subject.
http://en.wikipedia.org/wiki/Economic_efficiency
If money was earned through legal and accepted processes, it is some one else's money, and taking it is no different then conscription.
I must give you credit for one thing, you successfully described the human condition and demonstrated that CEOs show self interest. Where you lose sight is that politicians, (ALL of them), have the same self interest as the CEOs! Politicians/regulators and Union Bosses have no good gene that inoculates them from subjugating the greater good for their desires. They will throw you under the bus just as fast as any CEO, if it suites their ends!
"To paraphrase, you said I am obsessed with primitive solutions. My response is; "I see your top down approach to the organization of our country as a fatal conceit".
http://www.fff.org/comment/com0902k.asp"
What top down approach? What top down approach are you talking about? Have you read my post, nitwit? Or did you just reply to what you imagined I'd say without actually reading anything? I was talking about worker control even, not top down control. Can you only reply to arguments you're already prepared for? Or can you think for yourself? If the latter, read the posts you're answering to first.
"Markets are the most efficient way yet devised by man to efficiently/effectively use scarce resources."
Obvious bullshit. If this was true, companies would use markets *internally to themselves* and not use top down planning, and you'd have breakups, not mergers between companies. If they're so efficient, why don't large companies apply market principles inside? Because they can plan production way more efficiently, that's all.
I also pointed out that markets are absolutely wasteful and inefficient in terms of everything that is not owned and is not immediately represented by money. Hence you get some short term value for long term damage - with a lot of the damage done being irreversible and completely outside our power to remedy.
Another thing that markets can't do is long term research and development. All of the big science and technology markets are making money off were developed by the state. And that's basically all of the really important stuff, everything in computers, production automation, containerisation, nuclear and biological research and so on. Market forces can take that and make money off it, but most of the deep innovation you rely on so much has absolutely nothing whatsoever to do with the market. Markets, for example, do not give a shit about research into fusion, it's overwhelmingly state money - even though it might bring (from a corporate pov, not mine!) incredible advantages, they just know they'll get the technology and the opportunity to make money off it when states have finished the work on them in about 40-50 years. How is not spending money on the most promising traditional type of energy source when we're probably very close to an energy crisis an "efficient use of resources" - while spending money on shit like Bhurj Dubai? Seriously? Markets are, in their present form, very good at robbing the commons and making money off them, pretending they create "value" and hiding the most important costs. They're awesome at that, I admit.
You obviously have no fucking clue at all about history, about how markets work, or, for that matter and about how extremely important planning actually is for capitalism, and you very probably haven't even read my post, so I have no idea why I'm even responding to you.
"http://en.wikipedia.org/wiki/Economic_efficiency"
It's a theory, dumbass. It's an assumption without which the ideology of markets won't work. It's absolutely not a fact, not even close. This is a proclamation of markets being more efficient than anything else, not a proof. Jesus fucking Christ. Go back to Hayek and the rest of the retarded fucked up "Nobel prize winning" ideologues (not "scientists" btw).
It's not that I mind ideology. I mean, I like Marxism, although I'm not really one. What I dislike is ideologies masquerading as "realist" and "objective" but that assume the basic evilness of people as their foundation, like neoliberalism.
An off thread comment:
What happened to the track function?
CD may post some good articles, but the way it deals with its online community is downright undemocratic. Decisions that effect online discussions are made without input and feedback about these decisions is simply ignored.
This is a major problem.
i concur. I also greatly miss the search function, an essential tool in combating trolls. Note Horace isn't here to defend Ryan.
It's probably a technology issue, the query they used to get the information was always slow. But yeah, the lack of tracking feature (or anything similar, like at least being able to flag a thread as favourite etc) is pretty bad. I don't like the locking of old comment threads either.
Mr. Pizzigati misses the most absurd aspect of Ryans argument.
A business's money spent on "creating jobs" (aka "payroll") is NEVER taxed anyway - be it a corporate return or an individual Schedule C return - which is what Ryan seems to be talking about. Payroll is a business expense and is always deductable. The tax is on profit only. So, asuming the business isn't actually losing money (in which case the business would pay no tax - or get a credit), the businesses decision to hire or lay of anyone would have NOTHING to do with the top marginal tax rate. If they were earning enough for the top rate to apply, they should be growing the company by reinvesting the profit in capital improvements - which are deductible through depreciation, or by hiring more employees.
Of course, these neo-robber-barron MBA's all know these elementary accounting and tax concepts, so when Ryan tells his constituents such abusrdities, we can only assume that he is deliberately perpetrating this bald-faced conflation of apple and orange lies and deceit on his constituents.
Ultimately what the rich are practicing here is the subversion of democracy through a mix of deciet and blackmail - as Ayn Rand's storybook John Gault teaches them to do.
Someday, The Rich will pay - with their lives. This is not a threat, it is a lesson from history
Euphemisms are really a hoot. Paul Ryan is referred to as 'Blurring distinctions' and 'Mixed payroll and income taxes together' to confuse the issue.
The question should be raised: What is really being said by Ryan? A euphemism is by definition a substitution of a mild, vague expression for a harsh, bold, stark reality.
What Ryan is promoting here are LIES.
And behind those lies, is the not-so subtle blackmail - give us everything we demand, or we will close our doors, throw all of you out of work, and you will either cry "uncle" or starve.
The representative's statements were not intended to be factual. In a culture of lies, the truth is anathema. You get what you vote for, and voters voted for this asshole, so sorry Charlie, you may feel like you're being violated, but as any Republican can tell you, if you just lie back and enjoy it, it's not rape.
"We do tax the top," Ryan earnestly responded. "Let's remember, most of our jobs come from successful small businesses. Two-thirds of our jobs do."
But jobs do not come from excess money. Will one hire others with ones extra money to sit and read the newspaper?
Check out this excellent piece: http://www.dailykos.com/story/
2011/05/13/975922/-Actually,-The-Rich-Dont-Create-Jobs,-We-Do?detail=hide
I know, "it's kos". But every now and then someone comes through.
***
A couple excerpts...
Demand Creates Jobs:
I used to own a business and have been in senior positions at other businesses, and I know many others who have started and operated businesses of all sizes. I can tell you from direct experience that I tried very hard to employ the right number of people. What I mean by this is that when there were lots of customers I would add people to meet the demand. And when demand slacked off I had to let people go.
If I had extra money I wouldn't just hire people to sit around and read the paper. And if I had more customers than I could handle that -- the revenue generated by meeting the additional demand from the extra customers -- is what would pay for employing more people to meet the demand. It is a pretty simple equation: you employ the right number of people to meet the demand your business has.
[next]
Taxes make absolutely no difference in the hiring equation. In fact, paying taxes means you are already making money, which means you have already hired the right number of people. Taxes are based on subtracting your costs from your revenue, and if you have profits after you cover your costs, then you might be taxed. You don't even calculate your taxes until well after the hiring decision has been made. You don;t lay people off to "cover" your taxes. And even if you did lay people off to "cover' taxes it would lower your costs and you would have more profit, which means you would have more taxes... except that laying someone off when you had demand would cause you to have less revenue, ... and you see how ridiculous it is to associate taxes with hiring at all!
People coming in the door and buying things is what creates jobs.
***
It's a worthy read. Short, sweet and to the point.
Worth reading and passing around.
Brilliant...thank you....we need to have this information printed and stuck under the noses of those who think taxes rob people of jobs. Likewise I would very much like to see some evidence of how reducing taxes increases the number of well paying jobs in a trickle down sort of way. Nothing as yet seems to be forthcoming. So...I'd be very happy to subsidise BIG pharma, BIG oil etc etc if they could demonstrate that in the past financial year they have added x number of jobs OVER a predetermined threshold. We seem to like this notion of rewarding perormance so fine, lets reward perofmance in terms of sustainable well paid job creation
I believe that I already explained the same thing above (or below, depending on your settings). Maybe I need to use plainer language like you did, though.
And furthermore, this is a good time to point out that environmental regulation doesn't "kill jobs" either - it creates them!
That these lies come from business people - who surely know this, shows how flagrantly bald-faced they are.
And another thing: I have always been entertained by the business owner who tell a complaining minimum wage employee that: "I have much more at stake than you! I've invested everything I have in this business". But nontheless, they also seem to invariable own a big McMansion, plus a couple vacation houses, several expensive cars, and goes on several vacations to the tropics every year.
The rich are such pathological liars and swindlers it isn't funny.
Unforgiven: Your logic and common sense brands you as an enemy of the state. How dare you try to upset the gravy train with facts. Tax cuts for the rich and super-rich create jobs because as they buy more houses, they need more gardeners and maids. That's why it's called "trickle down", just be patient America and any day now the rich and super-rich will show their gratitude by giving you a job cleaning their gutters.
Regarding Ryan's (or any of the right-wing extremist) sound bites: They don't have to be accurate. They just have to be repeated often.
How to get rich.
Cook up a scheme, where everyone pays you a bit,
If millions pay, you amass overall quite a bit.
Multiply that by the number of parasitic rich,
and public health dies to feed a wealth itch.
The many poor get to support extreme wealth.
so a few beneficiaries can have fantastic health.
Now privatise away all natural resources,
To those that play with stock market horses.
And take all rights to minerals and gases,
and treat small landowners as braying asses.
Let the income and rewards go to a few.
Let poison and pollution be the public stew.
So the rich live on rent from everything,
while common public get the whip sting.
Slaves are oppressed by the landlords,
and have no say on corporate boards.
The filthy rich enjoy surplus to needs
care not when the lower class bleeds.
Can send them away to endless wars,
push sales profits up in weapons stores.
Income distribution is the most pleasing,
to the rulers love of wealth teasing,
just before revolutions bloody overthow,
when real democracy decides they have to go.
On a recent talk show a doctor in a small medical practice complained that it as not making any money. The host had the sense to ask, "but you are still being paid by your business." "Of course," he said. I believe this is how practically all businesses small and large operate. The number of businesses running out of a personal bank account, employing other people and going over $250,000 is very small yet the Republicans assume this is the normal case and that these little guys with personal businesses are the "wealth creators" and so need to be protected.
sound byte, perhaps?
People are conditioned to be stupid. Most people don't see Ryan's argument as a "post hoc ergo propter hoc" because they don't understand the relationship between taxes and income or understand business accounting.
"You can't fix stupid."
The more money the rich save in taxes, the more they'll speculate in the stock market--driving up oil prices and crashing the economy. The rich are addicts--they have enough money for several lifetimes, but they still want more. They are compulsive gamblers. Making money the old-fashioned way (working for it) is too boring for these addicts. They need the "high" of a big win. The rich are sociopaths. Like many addicts, the rich will do anything, even kill, to get their fix. And they'll do it without remorse or guilt. Making profits off war, poverty and home foreclosures is all the same to them--they need their fix. Folks, we're being ruled by sociopathic compulsive gamblers--how's that for national security?