Why aren't the rich "sharing the pain"?

United States
May 31, 2011 9:24pm CST
We are told that we need to cut spending, and make drastic cuts in everything including entitlements in order to balance our budget. But, that means that a group of Americans will feel no pain at all because most of these cuts won't effect them, they don't qualify for many entitlements, and god for bid we raise taxes. The wealthy in this country have actually befitted from the economic down turn, and will continue to due to the "fear" of raising taxes. For 10 years taxes have been lower than in the last 30 years, yet the economy has at best broke even. The last two times we raised taxes in this country it led to economic expansion. It worked for Reagan and Clinton, why won't it work for Obama?
2 people like this
6 responses
@gewcew23 (8011)
• United States
1 Jun 11
For a little clarity what has been proposed by the current administration is to have the top 2% pay the same tax rate as they did during the 90's which was, if I am not mistaken, 39%. I understand the fear of some that increasing taxation on the wealth will have a negative effect on the economy, well do you not think that cutting services and spending would also have a negative effect on the economy?
2 people like this
• United States
1 Jun 11
Of course it does. But it also pushes people over the 50% mark in taxes with state and federal taxes combined. That is very unreasonable to ask someone to give more money to the government than they can keep for themselves. Everyone knows budget cuts hurt. People are making these types of cuts daily in their own budgets. It will hurt for awhile. It won't have any more of a negative impact that what is already in place. Right now, the economy is going to head in one of two directions either another recession or a double digit inflation. Pick your economic fall-out. The recession would be due to a drastic cut in spending projects. At its current status, the government can't sustain the spending it has been doing. The double digit inflation comes from a printing of too much money and not raising Federal interest rates. Which direction is going to depend on what the government does. Would you rather have lower prices and more people out of work? Or very high prices and people still losing jobs? Those are your choices, sorry the Congress and President choices. Because either way, the economy will cycle up or down. The one thing it certainly doesn't do is flat line.
• United States
2 Jun 11
Gew, you are trying to bring logic into a discussion where little is found on the opposite side. And don't even try to use facts, we all know that those are of no use to the right wingers.
1 person likes this
• United States
2 Jun 11
Sierras, may cities and states are raising taxes because the federal and state governments are sending them less money, which is fall out for federal spending cuts. When ever someone tells me at people will be paying 50% in taxes, I always go back to my good friend D!ck Cheney, who paid less than 10% in taxes every year he was vice president, and is a multi millionaire. So please explain to me who REALLY is paying 50% in taxes? When will the House (run by Republicans) cut their own pay as part of these budget cuts? How about paying more for their insurance? How about vowing not to write off anything? Pay for their own housing and meals? Haven't hear one word of this yet have we? Actually we have experienced inflation for years no, the only thing is it was corporate made. Corporations have over $2 TRILLION in profits in their pockets because they started to raise prices during the recession and have continued ever since. What people don't understand is if the country got back to making things instead of importing them, we wouldn't have this problem. We also need to look at EVERY trade agreement, and install Mirror trading with ALL trading partners.
1 person likes this
@sierras236 (2740)
• United States
1 Jun 11
Why aren't the poor paying taxes? Isn't that the real question. Isn't the "tax" code supposed to be a fair distribution to all parties rich or poor? But wait, it is the absolute most discriminatory piece of legislation that has ever been written into existence. Why is the party where "supposedly" every one is treated equally picking on the "rich"? I am curious where this class discrimination comes into the "equal" part. You do realize there was a fundamental difference in the country's economy under Reagan and Clinton? Clinton also got very lucky with both a housing bubble and dot com boom. He was also in what I term a right side up situation with Medicare and SS. President Obama has a completely opposite economy of the Clinton eras. You can't make the comparison at all. It is ridiculous to even try to make a comparison because there are very vast differences. Republicans aren't opposed to raising taxes. Oddly enough, they are fighting the Democrat's "treat everyone fairly" battle. There is some political irony for you. What they are against is this absolute bias against people who happen to have money. If you want to get rid of all of the exemptions, that's fine. Most Republicans actually support that one. The Fair tax w/o the IRS. That's fine as well. But what you don't do is raise unnecessary taxes on one group of people who are already shouldering most of the tax responsibility. You don't "single" out a group of people (Oh wait, we have a word for that, DISCRIMINATION.) because their wallets happen to be fatter. That's like picking out a race of people to pay higher taxes. Not sure how much you think will actually be collected, but by all accounts it won't come anywhere near paying of the deficient even if the tax rate is at 100%. It won't create any more jobs. It won't put more money in people's pocket. It won't open up lending. It won't help the housing situation. It won't FIX THINGS in Washington. What it will do is give politicians license to spend more on pointless programs that help no one. Think very hard about that. You give the government more money, what do you think they are going to do with it? Not all the "Wealthy" benefited from the downturn. I like how you think they are these magic people that create money out of thin air. Maybe some of them do (politicians) but the rest work for their money. Face facts. The jobs are leaving the US because the "COMPANIES" can't do what companies do, make profits. Yes, they are greedy but so is everyone who starts a business and tries very hard to make enough money to make a living off of it. Everyone is greedy to some extent. But the greediest people are the ones who sit there demanding stuff without lifting a finger to make a contribution.
1 person likes this
• United States
1 Jun 11
Sierras, poor people pay taxes, they just don't pay FEDERAL income taxes. If you think that taxing the poor will solve our problems you are complete delusional. What people don't understand is that the poor and middle class create jobs by purchasing products. If you own a company and aren't selling anything than you aren't going to hire anyone. Poor people spend a much larger portion of their income on needs which create jobs. The more you tax them, the less money they have to spend on these, and you will see unemployment go up. The reason I am "picking" on the rich is because I was told by George W. Bush that if we lower taxes, it will create jobs. Yet, when he left office he only had a net 1 million jobs created, and the economy was flat. However, when both Reagan and Clinton left office they both had record economic expansion, and huge job creation. Clinton didn't have a housing boom, that was Bush Jr., and if you look at what Clinton did you would understand why he had a great economy. Clinton understood that if poor and middle income people have money they will spend it. When they spend it, it will create jobs, and profits for corporations. Why do you think Clinton kept such a sharp eye on oil? What happened to the country when the price of oil skyrocketed? When poor and middle class Americans have to spend more money on day to day expenses they have less to spend on everything else. Thus spending goes down, and make decision on what is important, thus the housing crash. There are many similarities between Clinton, Reagan, and Obama, you just have to open your eyes to see them. Republicans have said that raising taxes is off the table. So where are you getting YOUR facts from? They are against THEIR taxes go up, and the economy growing under a Democratic president. You can talk all you want about the "fair tax", but it won't ever happen. The accounting lobby will make sure of that. I think that taxes should go up across the board, and we need tax reform. Why is it that I don't pay a dime in federal taxes because I am married, and have kids? I am not saying that raising taxes will pay off the deficit, but I am saying that if we "ALL" need to sacrifice, than ALL of us should. If you look at the numbers you will see that the wealthy do very well during economic downturns. In 2009 the number of millionaires went up 16%. The real reason that the economy is doing bad is the lack of spending, because of a lack of jobs. The dirty secret that corporate America doesn't want Americans to know is that they are sitting on $2 Trillion in profits that they made from raising prices during the recession, and increasing productivity. What happens when repressed people stand up to powerful corporations? REVOLUTION??????
• United States
1 Jun 11
I would point out the very obvious fact that you said yourself. "The poor don't pay Federal taxes." That's a problem whether you recognize it as one or not. Sure, they pay state taxes but they do so under the same premise as everyone else. Not sure where you got your facts but Clinton also had the DOT com boom which ended right as President Bush took the Presidency. Clinton, Reagan and Bush also had more people paying into things like Medicaid and Social Security than people drawing out. President Obama had the bad timing of getting caught when the Baby Boomer generation was retiring. He also had the very bad timing of getting caught on a housing bust, bank bust, etc. But the Republicans haven't taken getting rid of tax exemptions off the table. If "ALL" have to share the pain, then why are some exempt from sharing the taxes too? The government's power to create jobs is limited to spending more tax payer money in the illusion that it creates jobs that are sustainable when in fact they are clearly not. I point to the evidence that the stimulus money which was supposed to save jobs only delayed the inevitable. Which means in the near future, watch for unemployment numbers to rise again. The wealthy do well in downturns because they can afford to move their money around to different places. The economy is caught in a Catch-22. The companies don't want to spend money because they don't know what the government is going to do. They aren't going to invest in something when they foresee that it is going to cost them more than they can make. Which means they are going to hoard money until they know for certain that their investments are going to pay off. As greedy as this appears to be, it is also a form of future company survival. Which means that the company is keeping at least some sustainable jobs. Once the government figures out what it is doing all of that money is going to be released back out. But the rise in prices was due more than just companies raising prices on items. About 80% of that was due to the Federal Reserve. They simply printed too much money and flushed the system. They haven't raised the interest rates to take the money out of the system. Thus,the inflation came right after the economy "technically" came out of the recession. Economics 101... The President really should take a refresher course. This type of economy is more akin to the 1960s/1970s rather than the 80s, 90s or even 2000s. Despite your view on Greedy corporations, they are still a necessity. People still need a place to work. If you get rid of corporations, all you have left are government jobs. The country will not be able sustain itself and will collapse under the weight of being too top heavy. Then where exactly will Revolution get you when you don't have anyone left who will do business with you because the instant they are "deemed" too greedy, they are destroyed?
• United States
2 Jun 11
Sierras, I am personally for a flat tax, but I also realize the the most activist/corrupt court in the United States made it so this will never happen. You are correct that Bush inherited a recession, but he also inherited a budget surplus, and a huge surplus in Social Security that he then spent on tax cuts. Bush had the housing boom which help employment, but those jobs are temporary, and as soon as the market crashed, EVERYONE in the industry was out of a job in months. According to my fellow Ohioian John Boehner they have: "You can't raise taxes." http://www.huffingtonpost.com/2011/05/10/john-boehner-tax-hikes-_n_859810.html The economy is stuck because people aren't spending, companies only wait on the government when they can afford to. If they had business that forced them to hire, they would, but the business isn't forcing them to. Plain and simple. If corporations were raising money because their cost went up then where do they get the piles of cash they have? There was no REAL inflation, if there was, then the cost to the companies would have gone up, when in reality it went down. Shipping cost went down, man power cost went down because productivity went up. I guess I need a refresher course on how it is when inflation goes up, corporations make TRILLIONS more in profits I hate to tell you this, but this country wasn't built by corporations, it was built by hard working people. We survived without corporations well before we were alive, and I am sure that we could do so again. Look at New York city, and how many small markets that survive without being a part of a huge corporation. What I am saying is that you can only push people so far, and this country is on the edge right now.
@bobmnu (8160)
• United States
1 Jun 11
In the 1920 depression or recession the government cut taxes and government spending and in less than 2 years the economy was growing again. In the 1929 depression the economy was recovering with very little government intervention. Then in 1933 FDR started a massive spending program, expanded tariffs, and an expansion of the government and their involvement in our lives. Depending on who you follow the Depression ended with WWII or others say it wasn't until the early 50's that we saw a real increase in economic growth. Before 1929 every economic down turn was followed by economic growth when the government did nothing, but in countries and situations where the government got involved and tried to fix things it seems that things only got worse.
• United States
1 Jun 11
Bob, there is one problem with your logic here: The Bush years. In the late 70's,80's, and 90's we had bad recessions followed by record economic growth. One led by a conservative, one led by a liberal. The next recession was led by a republican, who believed in low taxes, less government, less regulation, and most importantly "trickle down" economics. What went wrong there?
1 person likes this
@Taskr36 (13925)
• United States
1 Jun 11
Don't forget the Clinton recession. We were pulled out of that by cutting taxes. The current recession was the result of too much government involvement in banks and housing loans which led to an ungodly number of foreclosures, damage to banks who wouldn't normally allow such stupid loans, and of course the stupid bailout. Taxes were NOT a factor.
@bobmnu (8160)
• United States
1 Jun 11
Once again the government trying to solve every problem in isolation without looking at the unintended consequences. Solve the housing problem by letting anyone borrow money even if they can't afford the payments. Loan money to someone hoping the asset increases in value and they can refinance at a lower rate. This is called speculation and if I do it with my house poor me and let the government help out, but if I do it with Oil the government will be all over me and make me look like a criminal. What is good for one is good for the other. If people want to speculate on the house let them but then don't bail them out when the value falls.
1 person likes this
@suspenseful (40316)
• Canada
1 Jun 11
The only way the rich could share the pain as much as middle class or poor people do is if their income over a certain amount is taxed at 100 percent. So since Obama considers everyone making over $250,000 would have to pay back to the government in taxes any amount over that. Now considering that the rich are already paying a percent I think of 30 percent or so on what they make any way, their income would be lower then $250,000 and they would no longer be rich. Then when the rich feel the pain, since many of them are employers, they laid off people so the people they lay off feel the pain. And I suppose getting rid of a couple if BMWs or one house would not seem to hurt as much as having to live paycheck to paycheck. One could give the money from the rich to the poor people, but would not that result in the poor people now beilng rich, and the former rich now being poor? So, you have to ask how much pain should the rich take? And whether this is due to envy.
• United States
2 Jun 11
Actually, what Obama wants would be about a 39% tax rate at the highest level, which would me a tax increase of about 4 - 6% depending on how much you pay your accountant. The myth here is that this will lead to unemployment, but history tells us an entirely different story. Both Reagan, and Clinton raised taxes and both had record economic expansion. If raising taxes were such a bad thing than why did the great Ronald Reagan do it??????
2 people like this
@bobmnu (8160)
• United States
2 Jun 11
If raising taxes is so great lets tax at 100% and have a booming economy. If 39% will grow the economy why not 50%, or 75% or lets go back the the 40's and tax at 90%. There is an economic principal that I learned in Econ 101 You tax that which you want to eliminate or reduce and subsidise that which you want to encourage. We are taxing work and subsidising minimum workers with the EIC.
1 person likes this
• United States
3 Jun 11
Bob, I am only going on FACTS here, and I can show you the FACT that when wealthy Americans were taxed at 39% the economy grew. The tax rate is lower today, and the economy is struggling to do anything. Funny how when ever taxes are raised, and then lowered, the economy does better.
1 person likes this
@anniepa (27238)
• United States
2 Jun 11
Gee, debater, isn't that simple? The rich aren't sharing the pain because they're "special", they and they alone are deserving of all their wealth and good fortune because they and they alone have worked hard and applied themselves to become successful. Anyone who hasn't become successful must be a lazy slob who wants something for nothing from the government, right? (In case anyone hasn't picked up on it, the sarcasm was turned on full-blast in the above!) Seriously, I can't see how they do it but the conservatives really believe it when they seemingly blame our economic woes on the lower income Americans. They apparently really think taking away more of what little these people have to get by on won't affect the economy adversely as long as the rich get to keep more of what they earn so they can "create more jobs". Do they not see that without the EIC and without the progressive tax code we currently have the lower income WORKING people would barely survive. They'd struggle even more than they are already just to pay for the essentials which obviously means they'd have far less discretionary income with which to buy any of the goods and services from the rich business owners, which would lead to more people becoming unemployed, which would lead to even MORE people with no money to spend...and so on and so on... I know we need "the rich" to provide jobs for the rest of us but if most of the rest of us have nothing to spend because our taxes have been increased and our benefits cut it's going to hurt the rich more than paying a pittance more in taxes just on their income above a certain amount such as $250,000. I'd gladly compromise for $500,000 but for the right any increase in taxes for the wealthy isn't even allowed to be mentioned. It's so much easier to push Grandma over a cliff! Annie
@bobmnu (8160)
• United States
2 Jun 11
Remember we tax Earned Income - wages from working. Look at the latest Census. Wealth is moving from high tax states to low tax states to keep more of their money. In New York City 1% of the people pay almost 50% of the bill. Raise their taxes and they can move and then who will pay the bill. http://www.nypost.com/p/news/regional/item_cllbdom7I6uyBbNmMVT2bP;jsessionid=E2D346140B17527CE37FCBC7E3C9A8BB California is also facing the problem of people moving out to avoid the high taxes that go for many social welfare programs and a hugh government payroll and benefits package. All you have to do is look at Detroit to see what taxing the rich workers to support the non workers achieves. How many more Detroit's do we want in this country?
@Devilova (5396)
• Indonesia
1 Jun 11
Many paople said t5hat Obama fail on His own country, therefore He try to get impressions on other field. Osama for the example.