---

Oh, you mean all those people providing the jobs? Yeah, that'll work

---

---

My beef is that even taxing the rich won't do anything
to the deficit. A drop in the bucket. It's the other
things that need to be addressed.

---

---

There are a couple of polls out showing if we go over the cliff it will be all the Republican's fault.

---

---

When you win re-election and are President of the United States, one of the benefits/perks of the job is the ability to use your "bully pulpit" to take your show on the road, so to speak.

---

---

A tax increase being passed does not mean spending cuts will not be made. Its not an either/or, its a place to begin, which MUST be done.

---

---

You can't get us out of this mess with just spending cuts. If it was tried we would be in a recession faster than you can spell it.

It has to be a combination of both spending cuts and an increase in revenue.

---

---

Please link the White House proposal for spending cuts.

---

---

When President Obama needed a business executive to come to his campaign defense, Jim Sinegal was there. The Costco co-founder, director and former CEO even made a prime-time speech at the Democratic Party convention in Charlotte. So what a surprise this week to see that Mr. Sinegal and the rest of the Costco board voted to give themselves a special dividend to avoid Mr. Obama's looming tax increase. Is this what the President means by "tax fairness"?


Columnist Mary Anastasia O'Grady on Costco and other companies paying out fatter dividends this year to avoid the tax cliff.

Specifically, the giant retailer announced Wednesday that the company will pay a special dividend of $7 a share this month. That's a $3 billion Christmas gift for shareholders that will let them be taxed at the current dividend rate of 15%, rather than next year's rate of up to 43.4% an increase to 39.6% as the Bush-era rates expire plus another 3.8% from the new ObamaCare surcharge.

More striking is that Costco also announced that it will borrow $3.5 billion to finance the special payout. Dividends are typically paid out of earnings, either current or accumulated. But so eager are the Costco executives to get out ahead of the tax man that they're taking on debt to do so.

Shareholders were happy as they bid up shares by more than 5% in two days. But the rating agencies were less thrilled, as Fitch downgraded Costco's credit to A+ from AA-. Standard & Poor's had been watching the company for a potential upgrade but pulled the watch on the borrowing news.

We think companies can do what they want with their cash, but it's certainly rare to see a public corporation weaken its balance sheet not for investment in the future but to make a one-time equity payout. It's a good illustration of the way that Federal Reserve Chairman Ben Bernanke's near-zero interest rates are combining with federal tax policy to distort business decisions.

One of the biggest dividend winners will be none other than Mr. Sinegal, who owns about two million shares, while his wife owns another 84,669. At $7 a share, the former CEO will take home roughly $14 million. At a 15% tax rate he'll get to keep nearly $12 million of that windfall, while at next year's rate of 43.4% he'd take home only about $8 million. That's a lot of extra cannoli.

This isn't exactly the tone of, er, shared sacrifice that Mr. Sinegal struck on stage in Charlotte. He described Mr. Obama as "a President making an economy built to last," adding that "for companies like Costco to invest, grow, hire and flourish, the conditions have to be right. That requires something from all of us." But apparently $4 million less from Mr. Sinegal.




By the way, the Costco board also includes at least two other prominent tub-thumpers for higher taxes William Gates Sr. and Charles Munger. Mr. Gates, the father of Microsoft's Bill Gates, has campaigned against repealing the death tax and led the fight to impose an income tax via referendum in Washington state in 2010. It lost. Mr. Munger is Warren Buffett's longtime Sancho Panza at Berkshire Hathaway and has spoken approvingly of a value-added tax that would stick it to the middle class.

Costco's chief financial officer, Richard Galanti, confirms that every member of the board is also a shareholder. Based on the most recent publicly available data, they own more than 4.1 million shares and more than 1.3 million options to purchase additional shares. At $7 a share, the dividend will distribute roughly $29 million to the board, including Mr. Sinegal's $14 million at a collective tax saving of about $8 million. Even more cannoli.

We emailed Mr. Sinegal for comment but didn't hear back. Mr. Galanti explained that while looming tax hikes are a factor in the December borrowing and payout, so are current low interest rates. Mr. Galanti adds that the company will still have a strong balance sheet and is increasing its capital expenditures and store openings this year.

As it happens, one of those new stores opened Thursday in Washington, D.C., and no less a political star than Joe Biden stopped by to join Mr. Sinegal and pose for photos as he did some Christmas shopping. It's nice to have friends in high places. We don't know if Mr. Biden is a Costco shareholder, but if he wants to get in on the special dividend there's still time before his confiscatory tax policy hits. The dividend is payable on December 18 to holders of record on December 10.

To sum up: Here we have people at the very top of the top 1% who preach about tax fairness voting to write themselves a huge dividend check to avoid the Obama tax increase they claim it is a public service to impose on middle-class Americans who work for 30 years and finally make $250,000 for a brief window in time.

If they had any shame, they'd send their entire windfall to the Treasury.

---

---

I was looking at a new poll this morning that shows 60% of Americans want higher taxes on the people making over $250,000. 64% want higher taxes on Corporations.

---

---

GOP officials told The Times that the decision by the CRS came after a cooperative discussion, but Democrats have suggested that the move is part of a broader effort by Republicans to squelch legitimate research that runs counter to their economic principles.

The CRS report, by researcher Thomas Hungerford, concluded:

The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.
However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced -- lower top tax rates may be associated with greater income disparities.

---

---

From JFK To Bush, Treasury Swelled After Tax Cuts

By Paul Sperry


Posted 10/17/2012 06:58 PM ET


President Obama warned that GOP hopeful Mitt Romney's proposed income-tax cuts will "cost" the government revenue and repeat Bush policies that he says blew up the deficit.

"The centerpiece of his economic plan are tax cuts," Obama said at Tuesday's presidential debate in New York. "That's what took us from surplus to deficit."

He called Romney's tax plan "sketchy," because it promises to raise revenues while slashing personal tax rates from top to bottom. His debate sparring partner, Democratic Sen. John Kerry, went further, calling it a "fraud."

The Obama camp has strenuously opposed Romney's pro-growth strategy, arguing that tax breaks, especially for the wealthy, "rob" programs for the middle class and poor because they don't raise revenues and don't "pay for themselves."

"It has never been done before," Vice President Joe Biden insisted in last week's debate with Romney running-mate Paul Ryan.

"It's been done a couple of times, actually," Ryan shot back.

The data bear out Ryan. In fact, the White House's own numbers put a big wrinkle in its argument.

The historical tables in the back of the latest "Economic Report of the President" show that the Bush tax cuts generated more, not less, federal revenues — a phenomenon that also held true for Presidents Clinton, Reagan and Kennedy.


All four leaders, two Republicans and two Democrats, slashed taxes for top individual earners or investors. And once these rate reductions took effect and began stimulating economic activity, record individual income-tax receipts poured into the U.S. Treasury. Revenues increased even after adjusting for inflation and population growth.

Kennedy

Kennedy's major tax cut, which included chopping the top marginal rate to 70% from 91%, became law in early 1964, after his untimely death. It promised to grow the economy and close the budget gap.

"Coming at a time of substantial deficit in the federal budget, this was a startling proposal to many observers," said New York University economist Richard Sylla, co-author of "The Evolution of the American Economy."

To the shock of many naysaying Democrats, the plan worked. The economy grew at an average 5.5% clip, and unemployment fell to 3.8%. In turn, the annual deficit shrank to $1 billion from $7 billion as individual income-tax receipts nearly doubled.

"Rising income more than offset the decline in income tax rates as far as federal revenue was concerned," Sylla said.

Kennedy and his supply-side advisers "could point to those few who remained unpersuaded that despite the tax cuts — or rather because of the tax cuts — the federal deficits of fiscal 1965 and 1966 were substantially reduced from 1962-64 levels."

Vindicated, the "new economists" proposed even more tax cuts. But President Johnson opted instead for tax hikes, including a 1968 tax surcharge of 10% on everyone's income. Revenues peaked two years later at $90 billion.

Reagan

President Reagan picked up where Kennedy left off, slashing the top personal rate from 70% all the way down to 28%. The historic tax relief triggered record new business start-ups and small-business expansion.

As in the '60s, tax revenues exploded throughout the '80s as the economy boomed. Between 1982, when the first round of Reagan's across-the-board tax cuts went into effect, and 1990, when President George H.W. Bush broke his no-new-taxes pledge, individual tax receipts jumped 57% to $467 billion.

Clinton

Obama says he wants to go back to the higher personal income "tax rates we had when Bill Clinton was president. ... That's part of what took us from deficits to surpluses."

In fact, those budget surpluses didn't materialize until after Clinton in 1997 reluctantly signed a GOP tax bill that cut the capital-gains rate to 20% from 28%.

The result was dramatic. Tax receipts from capital gains ballooned as stock and other capital investment more than tripled.

Between 1996 and 2000, "the increase in capital gains revenues accounted for a little over 20% of the total increase in federal revenues," former Treasury official Bruce Bartlett said.

For the first time, individual tax receipts hit $1 trillion, before peaking in 2000 from the dot-com bust and Clinton recession.

Despite the government taking in more money from lower taxes on investment income, Obama wants to raise those taxes "for purposes of fairness."

Bush II

While Obama claims the Bush tax cuts caused the recession and record deficits, the evidence says otherwise.

After President George W. Bush in 2003 signed the largest tax cut since Reagan — including dropping the top marginal rate to 35% from 39.6% — government receipts from individual income taxes rose from $794 billion to a peak of $1.2 trillion in 2007, when the mortgage crisis began — a jump of 47%.

Stronger economic growth expanded the tax base and brought in so much revenue that Bush more than halved the deficit over that period.

Revenues weren't the source of the problem. Deficits came from the other side of the ledger: spending, which outstripped new revenues.

And for that, both Democrats and Republicans share the blame.

---

---

Everyone pays taxes its just the matter of how much & what type.

---

---

The hysteria over letting the Bush tax cuts for the folks making over $250,000 is rather amusing but getting old. So far no one either on this board or anyplace else that I have read has made a solid argument on NOT letting the tax cuts expire.

---