Taxing the rich is the budget's sticking point
You would think that with all that is at stake here, Republicans could bend on this one issue.
Do the Republicans have the ability to make a stand only on keeping down the taxes for all who make more than $250,000? Is that a viable position? Is that what this fiscal cliff is coming down to?
If you parsed the rhetoric you would think so. There doesn't seem to be any real gulf with the huge compromises that have to be made about the defense budget, the Social Security tax break, the alternative minimum tax, the extended unemployment benefits and even the defense budget. There's no distance between the two sides on holding taxes down for those who make less than $250,000. It just seems like the Republicans are willing to go to their grave defending the right of the wealthiest not to pay higher taxes -- something that is a deal-breaker for President Obama, as reiterated by his minion Nancy Pelosi (D-CA) on the talk shows this weekend.
You would think that, with all that is at stake here, this measure could be agreed upon. I mean, the rest of the cliff jump is far more important to the U.S. economy to have it be sacrificed on a no-tax-increase policy, no matter what position. That's particularly so after that position -- which was well-known to the electorate -- held no water in the latest election. The Republican candidate was only able to pick up a few states over the other one, despite the economy being structurally unable to produce enough jobs not to mention worry about going back into recession.
Yet, when you go through the documents for this issue, as I do for my Wall of Shame nominations, it is by far the most important sticking point.
I think that's one of the reasons there is so much hope a deal could be done. Logically, this one cohort, which could bring in $40 billion -- the smallest portion of the amount of money that would be raised by the tax increases that are coming -- couldn't and shouldn't be able to trigger a U.S. recession via fiscal cliff. Logically, at least a phase-in could be agreed to, and the Republicans aren't going to have to give up much, given that they are the minority party. You would think that at least this gives them a terrific position to run on in 2014, if they think it is terrific: We kept taxes down even for the richest. If they think they can turn the tide in the blue states with that, and if the Tea Party thinks it can stay alive claiming that it kept rates down, then the U.S. will go over the cliff, plain and simple.
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So, that's the sticking point to watch. It's not the defense budget, or the employment, benefits, or the social security exemption, or the taxes for the middle class or the aversion of the Alternative Minimum Tax for millions.
It's all about taxing the rich, and their capital gains and their dividend income and pleasing or displeasing the wealthiest people in the country.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust.
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Every One Billionaire equals 20,000 FAMILIES based on the average household income in America. That is- for every billion hoarded by one person, 20,000 families go without. To blatantly condemn 20,000 families for every billion hoarded- is crime and criminal intent. When Romney spoke about the 47%, that was terrorism. We have a War on Terrorism. The comment needed to be met with military force and the speaker reduced to nothing. Unhappy with such words? 47% of the nation wants it's opportunities back. That comes from the ELIMINATION of hoarders. It's not limited to billionaires... it's not specifying that families making more that $50,000 are to be treated as hoarders... it's not to say everyone in the 47% can and will justify parity. It says that a FAMILY earning $50,000 annually will participate in the economy of America. It says that people making excessive amounts above $50,000 will also participate in the economy but possess far more that can only harm our economy and may even be used to sabotage it. The most horrific aspect of our bottleneck is-- so many hoarders of wealth actually inherited it. I'm sorry, but as we look back at societies throughout time, ALL of them failed when excessive currency transitioned from founders to flounders and from heroes to zeroes who could not avoid the temptation of correction and omnipotence.
The markets are UP this morning. They are EVERY Monday morning now. They are UP because bad banks sold bad credit to a lame Federal Reserve who refueled fools so they can continue to suppress us. CLOSE THE BANKS. END THE FEDERAL RESERVE. GET RID OF WALL STREET or prepare for the desperate peoples of the world to seek correction. At the end of the day no banker should be free and Congress should have a very short and specific deadline for fixing what their negligence has bore us. Lift families lift Main Street, crush hoarders of currency.
We must also take a hard look at wasteful spending in the Defense Department, where we now spend almost as much money as the rest of the world combined. Significant savings can be found at other federal agencies, too."
- Bernie Sanders, November 19, 2012
- Bernie Sanders, November 19, 2012
If we enlist the middle class and the most socioeconomically disadvantaged and the most unfortunate members of our society to fight our nation's military battles, then we should be able to enlist the most socioeconomically advantaged, the most fortunate members of our society to help with the nation's deficits and debt.
Gee people -- the fiscal cliff they are taking about is nothing compared to what needs to be done to correct the imbalance in the US economy.
The deficit is going to be $2 trillion for the foreseeable future a year.
The messy fiscal cliff they are taking about is only a trillion dollar correction spread over 10 years.
There is no hope for the USA to correct it's economic imbalance.
Heck they can not even agree on a $100 million a year correction not to mention a $2 trillion a year correction that is needed.
Basically the USA GDP is probably closer to about $5 trillion a year and not the $16 trillion a year they say it is. Take out housing (you are suppose to be getting rent of like $2,500 a month for your house and living somewhere else for free and spending that $2,500 a month in the real economy) and other jack ups of the GDP numbers and we are looking at about $5 trillion for the real GDP lower than China's real GDP folks.
Basically there are like 110,000,000 workers making on average about $38,000 a year which is about $4 trillion a year going to GDP. The US companies still left that make things add about $1 trillion a year to GDP and everyone one else adds nothing.
We have a debt of like $2 trillion a year because the super rich pay themselves too much money $250,000,000 a year on average and pay the few Americans they hire too little $14,000 a year minimum wage. This imbalance will not last more than two years.
Our debt to GDP ratio is already approaching 3:1 and soon will be 4:1
Our collapse is merely months away.
Sadworld said
You're glossing over the fact that the 47% pay sales, state, and local taxes. There are also a lot of millionaires who pay $0 in Federal taxes. Demonizing the $250K+ earners is just as myopic as bashing "the 47%" . Also, MirageGuy, $250K+ earners are most certainly not "middle class". What really needs done is the tax system should be completely overhauled because it his highly flawed.
Hey you stole my next post!!!!!!!!
Agree x 1000
Raising taxes on the wealth will not cause a recession, the wealth have plenty of money to spend. Raising taxes on the middle class is what would cause a recession because they are already typically spending most of their income, with very little, if any, left over. They have no income to spare for a tax increase but the wealthy do have the income to spare for a tax increase. This is the conclusion of studies on this matter....See Less
Mirrage Guy Said
And it doesn't matter their income. They SHOULD pay something. WE need to stop giving these leeches a free ride. The middle class is tired of supporting their lazy asses.
Numbers matter Mirrage
Mirrage the average family of 4 in the bottom 50% of Americans makes about $24,000 a year. We all know about the cost of living, the rising food and gas prices. Imagine trying to provide some type of life for a family on that, what the hell are you going to take from them, 30 bucks. It would cost more to pay the IRS to process it then the income it would bring in.
The 1% is out of touch, period.
Now, not only the rich, but those that have suffered severely (been fleeced) at their hands are brainwashed into thinking Big Money is the savior to all our woes; if the tax cuts Were the solution, then why are so many regular folks still headed to the poor house? Do a little homework people...
ALL YOU HALFWITS THAT VOTED FOR OBAMA WILL GET YOUR LITTLE HAND OUTS WHILE THE REST OF US KEEP PAYING FOR THE BUMS YOU PUT IN WASH SO YOU KEEP GETTING YOUR FREE RIDE. I DONT BLAME YOU, IF I WAS A LAZY BAS TARD LIKE YOU I WOULD WANT TO KEEP THOSE SOB RUNNING THINGS. SOME DAY IT WILL ALL BE GONE AND YOU LAZY SOB CAN STARVE TO DEATH.
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