As I expected, this matter is turning into a major political battle. It is interesting. I'm getting the feeling that Obama and the Dems are not having things go their way. The Republicans aren't caving, and the general public is not seeming to buy into Obama's scare champaign.
Actually, the consequence of not raising the debt limit has not been honestly represented -- I'm not sure who is at fault for this, so I'll leave that question aside. It is exactly equivalent to the circumstance that many, many private citizens find themselves in from time to time -- its the end of the month and there's not enough money to pay for everything. Alternatively, it is Monday, the checking account has $5 balance, and pay day isn't until Friday. What to do?!!!! I guess all I can do is NOT PAY ANYTHING TO ANYBODY!!!
Is that the solution? Is that the solution that would occur to the normal adult? Of course not! Balderdash! Poppy****!!! You pay some bills and you don't pay others.
As a matter of fact, not all of my spending is in the form of paying bills presented. Much of my spending is putting gasoline in the gas tank (did that in my son's car last night), getting groceries at the grocery store (did that last night -- two pints of raspberries, 2 LBS of lunch meat at the deli counter, 1.5 LBS of cheese, two loaves of bread). So what could I have done last night? I could have put 1/2 a tank of gas in my son's car. I could have foregone the expensive raspberries. I could have bought 1 LBS of lunch meat. I could have bought a 1/2 LBS of cheese. I could have bought one loaf of bread. We all know other ways to live frugally when needed. Last Sunday we went to a Shakespeare play and took a friend of my wife's who we treated. $50 for tickets. We could have foregone that fun activity. There was a picnic we took to the play -- outside presentation -- that included a bottle of wine and various items from the store. Let's say that's another $20 of stuff. We could have, if money was tight, save $70 right there. If I go out to lunch with my work mates once per week and spend $14 when all is said and done, I could bow out of that activity. Dogs have a groomer appointment? Defer the grooming appointment. Tell the mowing crew that I can't pay them the $35/week that I have been paying them right now, I'm going to mow my own lawn for the next couple of weeks, and I'll call them back when I'm ready for them to start mowing my lawn again. None of these measures would involve failing to pay the mortgage on time.
Suppose it is really tough and this kind of trivial penny pinching above does not suffice. Then what? Well, pay the mortgage first. I don't want to lose the house. Maybe don't pay the cable television bill. Worst case, they turn off the cable and I don't have cable TV or Internet service. This is about $100/month. Maybe don't pay the wireless phone bill. We no longer have a land-line in the house, so this is more serious -- we would be without phone service in the house -- but still, we could survive. It is summer time. Maybe we could skip paying the natural gas bill. Cold showers and no fire on the stove. Again, not the best condition, but what are you going to do?
So it is with the federal government. If the debt ceiling is not raised, we will NOT default on our sovereign debt -- which would be a big problem for our economy -- we would pay the usual installments on our debt with the revenues that we have. We would prioritize our other spending appropriately and not pay some charges and pay others.
So the Democrats and Obama have painted an unrealistic picture of the results of not raising the debt ceiling. The Republicans really ought to get this story out in front of the public more clearly.
So the Democrats and Obama have painted an unrealistic picture of the results of not raising the debt ceiling. The Republicans really ought to get this story out in front of the public more clearly.
As is always the case, the Republicans don't have the media on their side. That being the case, I still think the Republicans are in a better position in this battle. The real question is do they know it? I think a lot of people are like me, and just waiting to see how they will screw this up and let Obama off the hook. That could very well lead to Obama getting his second term, and finishing our country off for good.
This is serious business.
C. Davis
__________________ Am I greedy because I don't want to give you what is mine?
or
Are you greedy because you want to take what is not yours?
The Republicans are just as much at fault as the Democrats are. The Republicans in congress see no reason that huge corporations like Boeing should pay any tax at all- they currently pay no taxes. It really does po me that i paid over $130,000 in taxes last year and Boeing paid nothing.
The Republicans are just as much at fault as the Democrats are. The Republicans in congress see no reason that huge corporations like Boeing should pay any tax at all- they currently pay no taxes. It really does po me that i paid over $130,000 in taxes last year and Boeing paid nothing.
No, the Republicans are NOT as much at fault. The fault here is the spending -- specifically the unprecdented INCREASED spending since Obama has entered office and is expected to continue increasing as a result of his healthcare bill. Obama, what a surprise, has made up magic numbers to project what kind of impact that will have on the federal budget, and it ain't real. A big issue -- one which I rarely hear discussed -- is that the federal government spending as a percentage of US GDP has risen dramatically under Obama. By what percent? I'm guessing from about 19% to about 24%, but that is rough and not substantiated. Actually, I found my source: check out the link below. Anyway you slice it, it is a step increase in spending as a percent of GDP and NOT an incremental, evolutionary increase. Now Obama wants to lock in this step change in government spending as THE NEW NORMAL. Well it isn't the new normal. By the way, if you think the difference between 19% and 24% is just 5%, think of the increase relative to the standard. 24/19 = 1.26 -- a 26% increase in federal spending as a function of GDP. As I say, it is a step change not a mere evolutionary "drift" as it were.
With reference to the Boeing matter. I pay a lot of taxes too, not as much as you if you paid $100,000 plus last year (but I reckon that is because you MADE more money than I did last year, right? Also, was it you that paid those taxes or your business? Incorporated? If you aren't taking advantage of some of the tax advantages businesses enjoy you ought to hire a new CPA.). I think tax loop holes ought to be closed, where they exist. But you probably know the tax laws as well as I do. Some years corporations run deeply in the red -- they lose money. Other years they run deeply in the black -- they make money. The tax system has been arranged to take this oscillatory property of business into account and allow these enterprises to smooth out their tax burden. The loses can be distributed over multiple years, and this seems legitimate to me. I have never paid 0 taxes because I have never had any years where I had 0 income or a negative income. In the real world, corporations DO have years where they have 0 or negative revenue (that is revenue left over after paying property taxes, employee wages, employee benefits, materials costs, utilities costs, etc.).
The more I think about it, the more I like a suggestion Sean Hannity made on his show Tuesday night. He suggested the Republican controlled House of Representatives draft and pass the debt ceiling bill that they deem satisfactory. Presumably, this would involve both raising the debt ceiling by an incremental amount and concurrently laying in substantive spending cuts NOW. Transfer this passed bill over to the Senate to vote on. If the Republicans in the Senate vote strongly for the bill but it failes because of the Democrats voting in lock-step against it, who can you blame for the failure to pass the debt ceiling increase?
You get the story out about this is not default -- you don't buy the fresh raspberries, you don't fill the tank with gas you just put 1/2 a tank in, you defer the grooming, but you do pay the mortgage payment and you do pay the wireless communication bill -- and that it is a matter of the administration prioritizing how the available government revenues are spent.
After all, people, there is a reason why there is a debt ceiling. It is to prevent you from pigging out on spending like a fat farm escapee at a pie eating contest. Is that not clear? There is supposed to be some pain, some discipline, some tough choices involved in living within your means and maintaining your waistline rather than letting it grow larger and larger and larger and larger and larger and larger and larger . . .
The Republicans are NOT powerless in this struggle. They have a mandate from the 2010 election to confront and fight this issue out toe-to-toe with Obama and the Democrats. They need to get their narrative out there also. And frankly, under the scenario I describe above, if Obama doesn't set appropriate spending priorities with no ability to deficit spend, that will reflect poorly on him, won't it? I mean, Republicans are not condemned to be evaluated solely by the hostile main stream media. And again, they don't really care about the opinion of the Democratic base -- nothing they can do will ever sastify the Democratic base. What matters is what the center, what the independents and the conservative base things. And if I were a Republican representative, I would be thinking about what kind of strong candidates the Tea Party might run against me in 2012 if I caved on this issue.
If you aren't taking advantage of some of the tax advantages businesses enjoy you ought to hire a new CPA.).
i no longer own a real business but do some limited consulting work. Most of my income last year came from the sale of real estate, precious metals and the stock market. i have about 90 hours of upper level undergraduate, graduate and post graduate accounting to my credit. i don't do my own taxes but know enough about accounting to
know they are done right. i caught my former CPA in multiple mistakes and made him do it all over.
i watched Lindsay Graham on TV talking like he had good sense. Yep, he wanted to give another corporate tax break and pay off the national debt at the same time. We know how well that one works. About 2/3 of the national debt was run up on the watches of three Republican presidents.
It is true that Obama has taken deficit spending to an unsustainable stratospheric level: That needs to change drastically. It is also true that Obama inherited an economy that was in the tank: Tax revenues are way, way down.
We could raise a lot of revenue by placing a 10 percent import tax on all that stuff coming from communist China.
As the deadline to strike a deal on the debt ceiling draws closer, former president Bill Clinton criticized the nation’s corporate tax rate over the weekend, saying it should be lowered as part of an agreement between the parties, according to Politico.
“We’ve got an uncompetitive rate,” Clinton told a crowd at the Aspen Ideas Festival on Saturday, Politico reports. “We tax at 35 percent of income, although we only take about 23 percent. So we should cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a fair amount, and there’s not so much variance in what the corporations pay."
In practice, though, American corporations often end up paying significantly less than the full 35 percent. Through tax breaks and loopholes, The New York Times reported in May, "United States corporations pay only slightly more on average than their counterparts in other industrial countries."
And it's common for major corporations -- including, in the past year, General Electric, Exxon Mobil, and Boeing -- to sidestep taxes entirely.
Clinton also offered his thoughts on corporate tax policy on Thursday, June 30, when he spoke out in favor of a corporate tax holiday, which would allow companies to repatriate overseas profits at reduced tax rates.
In an interview with Bloomberg Television, Clinton said that a tax holiday would be welcome “under certain circumstances.” He suggested a tax rate of 20 percent for companies bringing in offshore cash -- less than the current rate of 35 percent, but more than the Republicans’ proposed rate of 5.25 percent. Clinton recommended that the tax rate fall to 10 percent if corporations “reinvest [the offshore profits] in increasing employment in America.”
The Obama administration has signaled its opposition to the idea of a tax holiday. A similar holiday, enacted in 2004, brought $299 billion into the United States but did little to stimulate the economy.
However, in his State of the Union address in January, President Obama nodded to the possibility of lowering the corporate tax rate. The U.S. has the second highest corporate income tax in the world, after ***an, and to characterize it as "uncompetitive," as Clinton did on Saturday, is a common conservative charge.
Besides urging a lower corporate tax rate on Saturday, Clinton also appealed to President Obama to accept a package of spending cuts that would allow for a six- to eight-month extension of the debt ceiling. Clinton said the parties would not be able to hammer out a final deal by August 2.
A couple thoughts on taxation of corporations... Keep in mind how much their employees and investors pay based on the company's earnings and profit. While it may be true that for a variety of accounting reasons, a corporation with huge amounts of income pays very little tax, they are, nonetheless, paying significant amounts through other avenues. As an example, Exxon is cited above as not paying tax, yet, I believe I read that they paid the government an amount in gasoline taxes which exceeds the amount of their profit.
You guys are ALL talking out of school! Very idea that government spending is related to household spending is ridiculous!!!!!!
Our dollar is the reserve currency for the world, that means that every other currency is backed by the US Fiat currency. This was decided during the Bretton Woods Agreement in the early 60's when our dollar was backed by gold and thus the gold in our dollar, backed every other dollar.
A reserve currency is important - it means if you live in russia - and want to buy oil, you much exchange rupels for dollars and then buy your oil. Keep that in mind.
We since have free'd gold from our dollar making it a fiat currency and the only way the "fake" money has value is if investors have confidence in the dollar. When they have confidence the dollar is strong and demand for treasuries (bond instruments used to create dollars for spending) is high and the government can raise capitol... The opposite happens when confidence goes down.
We have a perfect storm brewing in the world currency markets. The USA is already bankrupt. Geightner has already exhaused the "household income" strategy to get us to the Aug 2nd by STEALING from the fed employee pension fund. That was their last act of deperation.
If they do not pass the increase - on Aug 3rd - the US treasury will not be able to pay the bonds that come due that day. That IS a technical default. The euro bonds are already being dumped as unsafe - any incling that US bonds are also unsafe will cause a mass dumping of US bonds.
Remember it was the perception that the US may not bail out the banks when they let Lehman Bro's fail that caused banks stocks to fail ending the mega banks ability to raise capitol and neccitated the early stage bailouts - like filling a cup with no bottom - no matter how much money they put in the cut it would not begin to fill...
IF the bond market is percieved un-reliable - bonds will be dumped and even IF they then pass an increase a few days later, investors may or may not return as it was just shown that the "good faith and credit" of the american people is now unreliable.
If this were the only thing in the world financial markets happening right now - maybe the confidence shake would be minor -but beleive me - we are on the cusp of an all out bank and credit crisis is europe - add the US to mix and you've just screwed the fake money markets of the world!
Then every derivative of fake money begins to be questioned by the markets - stocks, mutual funds, etc. You think commodities have bubbled - hell - you've not seen anything yet if we default.
The european banks are failing - just look at Unicredit - one of the oldest banks in the world. Their share trading has been suspended 3 times in two weeks to slow the carnage. Many of you are thinking - why would I care about a european bank????
The answer is the swaps market. Yep - swaps a sort of fake financial instruement that guarantees the purchase price (principle) in many derivatives and derivative contracts (but is NOT actually insurance).
Well guess who holds a whole ****pot of swaps on European banks??? Yep - all of our too big to fail US banks. They also own swaps on the the PIIGS countries on their bonds.
And - no - they do not have the capitol reserves to cover the swaps. They STILL are not required to.
So just as we pulled the world into our 2008 collapse - so Europe will pull the world into their euro failure...
Unicredit is down almost 40% since the end of may - thats terrible news for the euro bond market which is terrible news for world bond markets and now the USA may not raise the debt ceiling....
I suspect they will either through more illegal power stolen by the executive branch or a compromise which you can bet will only get us to the 2012 election by their estimates...
And regarding taxes - the best idea and rationale I've ever heard is the following:
Every American should have a constitutional right to keep 80% of what he/she earns. If god can survive on 10% (tithing) surely our federal government can survive on twice that amount!
Debt ceiling battle
