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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 132660  
Subject: Best move for Republicans Date: 11/15/2012 6:01 AM
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Here's my take on the best move now for Republicans in Congress (since I did so well with my "best move for Obama" a while back). Patience... I'll get to in further down in this post.

In Obama's press conference, he said "But when it comes to the top 2 percent, what I’m not going to do is to extend further a tax cut for folks who don’t need it, which would cost close to a trillion dollars." It's an interesting comment, because according to the IRS's latest data, the top 5% paid about one-half trillion dollars in total income taxes (the IRS apparently doesn't do a top-2% breakdown, or at least no one quotes it). So even if you cut not just the top 2%'s tax rate, but the top 5%'s, and even if you cut that tax rate down to ZERO it would, based on past experience, only reduce Federal revenue by half a trillion dollars. Be that as it may...

President Obama also stressed the need for Republicans and Democrats to come together, under a canopy of rainbows and unicorns, to compromise and get things done (actually, I made up the rainbows and unicorns part). His plan for compromising is this: you take What Needs To Be Done and split it into two parts, which I'll call Part A and Part B. For Part A, you just go right now with exactly what the Democrats want, and call that a "given". No discussion allowed. We can all agree on that, right? Then later, for Part B, the Republicans should be willing to comprise and give Democrats just a part of what they want: specifically, Part B. Now that's compromise.

In fact, Part A is: "The only question now is are we going to hold the middle class hostage in order to go ahead and let that ["making sure that the wealthiest Americans pay a little bit more "] happen? Or can we all step back and say, here’s something we agree on -- we don’t want middle-class taxes to go up. Let’s go ahead and lock that in. That will be good for the economy. It will be good for consumers. It will be good for businesses."

It's interesting here that tax cuts for the middle class will boost the economy (both for consumers and businesses), whereas tax cuts for the top 2% somehow... won't. Or at least it isn't worth mentioning.

But enough digression. Let's cut to the chase. Obama wants "the rich" to "pay their fair share". Now: here's my "best move" advice for Republicans in Congress. Republican leaders (say, the Speaker of the House for example) should announce that before discussions on the "fiscal cliff" can begin, they'd like to hear from the Democratic leaders exactly what the rich's fair share is. That is, as a specific number. According to the IRS's latest data, of the $7,825 billion adjusted gross income reported by all taxpayers, the top 1% reported $1,326 billion of that, or less than 17%. So, Democrats, what exactly is their fair share? Is it, say, 17% of the total tax paid (since they made 17% of the total income)? 20%? 25%? 30%? Let's have a number. Then we can start talking. The Democrats say that "the rich" don't pay "their fair share". OK, stop being so vague. Exactly what is their fair share? Is that so much to ask?

Hint: that top 1% already pays almost 37% of the Federal income taxes paid.

By the way, I got this idea largely by seeing Sean Hannity do this to liberal guests on his show, and to liberals when Hannity appears as a guest on other shows. He just asks them to name a specific number, as to what is fair (in the question he gives what constitutes "rich" and what units the answer should be in). Usually, the liberal refuses to answer. When they do answer, in every instance I've seen, they name a number less than what "the rich" already pay (which of course Hannity points out).

Phil
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Author: iamski Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111064 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 8:56 AM
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What percent are you?

http://blogs.wsj.com/economics/2011/10/19/what-percent-are-y...

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Author: JoshRandall Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111065 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 9:08 AM
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1%'ers have to make at least $507,000.

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Author: JoshRandall Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111066 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 9:11 AM
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How do you rank among the rich? How rich are you?

http://www.globalrichlist.com/

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Author: ShelbyBoy Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111068 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 9:20 AM
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Not to hijack this thread by changing the point, but I'm much more interested in what's best for Conservatives than what's best for Republicans.

Blacks in the U.S. have been willingly living on the Democrat plantation for a long time now for whatever crumbs the Democrats throw their way.

How long are Conservatives willing to keep living on the Republican plantation for whatever crumbs the Republicans provide?


ShelbyBoy

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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111072 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 10:00 AM
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How long are Conservatives willing to keep living on the Republican plantation for whatever crumbs the Republicans provide?


ShelbyBoy
_____________________

That's really a question Conservative do need to ask

In particular those conservatives that do believe that MORE conservative values will gain popularity in an election

BTW not being religious and being Conservative or conservative should really work quite well together. Something conservatives have to nail down IMO

Conservatives are natural allies of the religious but not pawns as truly supporting freedom of religion should be all religions want as well as am overwhelming willing partner in the fight for freedom from religion that is denied but is going on

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Author: ShelbyBoy Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111073 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 10:09 AM
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In particular those conservatives that do believe that MORE conservative values will gain popularity in an election


FWIW, others can speak for themselves, but I don't live my life or make decisions based on gaining popularity in an election. That sounds like someone building a house on sand.


ShelbyBoy

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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111074 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 10:12 AM
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FWIW, others can speak for themselves, but I don't live my life or make decisions based on gaining popularity in an election. That sounds like someone building a house on sand.

_______________________

Well, have at it maybe you can argue in absolute obscurity with the libertarians and get a candidate like Ron Paul to get enough folks to excite you and hurt folks that are kind of like you but don't agree with you on everything.

Good luck I guess

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Author: xLife Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111078 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 11:05 AM
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In Obama's press conference, he said "But when it comes to the top 2 percent, what I’m not going to do is to extend further a tax cut for folks who don’t need it, which would cost close to a trillion dollars." It's an interesting comment, because according to the IRS's latest data, the top 5% paid about one-half trillion dollars in total income taxes...

He might be talking about the cost over a decade, not one year.


It's interesting here that tax cuts for the middle class will boost the economy (both for consumers and businesses), whereas tax cuts for the top 2% somehow... won't. Or at least it isn't worth mentioning.

Not that big of a mystery. It's a basic economic principle. The lower you go on the income ladder, the more likely it is that marginal income is immediately spent.


Hint: that top 1% already pays almost 37% of the Federal income taxes paid.

What percentage of all income does the top 1% earn? It's not a rhetorical question. I can't find the answer. Best I could quickly come up with was this:

Top 1% Got 93% of Income Growth as Rich-Poor Gap Widened

http://www.bloomberg.com/news/2012-10-02/top-1-got-93-of-inc...

"Fairness," as we've discussed is totally subjective. Here's a test though. Let's say the government needs $500 billion for something we all agree is very, very important. The only way to raise the money is by tax. How do you apportion the tax among, say, 100 million taxpayers?



I got this idea largely by seeing Sean Hannity do this to liberal guests on his show, and to liberals when Hannity appears as a guest on other shows. He just asks them to name a specific number, as to what is fair (in the question he gives what constitutes "rich" and what units the answer should be in). Usually, the liberal refuses to answer.

Probably because it's a stupid question. There is no specific number, nor need there be one. The President's current proposal is to raise the marginal tax rate on incomes above $250,000. Whether or not $250,000 is a demarcation line for "rich" is irrelevant. It's not as if you earn $249,000 you're not rich and if you earn $251,000 you are. The difference between the two tax bills is negligible. The extra amount without the Bush tax cut is about $50. Now, if your income is $1 million (surely rich, no?) the extra tax would be about $60,000.

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Author: iamski Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111079 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 11:07 AM
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but I'm much more interested in what's best for Conservatives than what's best for Republicans.

Me to but the thread is what is the best move for Republicans. In that light I think regaining their conservative values is the best move for republicans.

I don't know if it's valid or not but I believe the lack of activity by the Tea Party relative to 2010 really hurt the Republicans.

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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111080 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 11:24 AM
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I don't know if it's valid or not but I believe the lack of activity by the Tea Party relative to 2010 really hurt the Republicans.
_________________

The Republicans could not run from the Tea Party fast enough. All evil was the Tea Party's fault

I truly fear Republicans are working to alienate Conservatives. Other than some lip service in general. Sure they ill run a Romney who is 90 percent conservative, but then they will disavow and demand he be nice and squishy

I do not know the solution, but IMO it is a long standing problem.

I do believe that conservatives should work in the Republican Party and should be quite ready to compromise. I also believe there should be an honest accounting by Republicans of how they are going to empower their conservative side and a clear avowal of those positions as well as clear statement of stuff that will NOT BE DEALT WITH NATIONALLY , or will not be dealt with until some point in time after we get past a lot of stuff

Some issues that are divisive need to be addressed and explained much better and be consistent -- like immigration issues. Take a stand and just one maneuver from the central issue marginally but find a moral and logical defense and have everyone toe that line, o at least have a single position and be able to say -- hey we believe XXXXXX and will support that as a party, though like all groups we are not in perfect lockstep in every aspect

The issues will all be picked at for little things, that is what the press and MSM do to make republicans look inconsistent, make the case stronger and more consistently and battle the tactic you know Your enemy uses over and over and over again.

Shore up the folks that want to agree with Republicans. Make a logical and moral case on the many who are confused and have priorities that are kind of weird and have overinflated minor issues. Address minorities as adults in their communities starting yesterday not with 'stuff; but with explained consistent policies and how they will make things better --- and how it will not help them to accept the bromides of the left, but deal with them now and every day for the next four years, not 3 3/4 years from now

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Author: ShelbyBoy Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111081 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 11:30 AM
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I don't know if it's valid or not but I believe the lack of activity by the Tea Party relative to 2010 really hurt the Republicans.


There was no lack of activity where I live.



ShelbyBoy

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Author: JoshRandall Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111083 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 11:35 AM
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I don't know if it's valid or not but I believe the lack of activity by the Tea Party relative to 2010 really hurt the Republicans.

My guess is that the reasons so many republicans stayed home, and particulary the Tea Party folks is that the very people they voted in to stop the fiscal insanity and reckless run-up of debt didn't do what they were hired to do; instead, they caved in to the democrats and allowed the debt ceiling to be raised. At that moment, they handed their cajones over to 0 and the dems and have been b-slapped ever since and will continue to get b-slapped in just a few weeks and beyond.

Republicans are simply too weak and spineless and don't have the will to do the right things. They will go back to a permanent minority status for doing so for at least another 40 years like they were before Newt's revolution. Every time the republicans get a chance to govern with a majority, they wuss out and stop acting on principles and fail to lead, to govern with strength and make tough choices that the country needs. This cycle will continue and we should not expect any real change from them. They are what they are. They are eunuchs. Think not? Just watch what happens and how they will be played like a fiddle by 0bama during the fiscal cliff talks. We will once again watch them embarrass themselves and bend over just like they have done several times since they compromised the first time on the debt ceiling. Book it! They will cave again and again.

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Author: drebbin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111088 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 12:28 PM
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ShelbyBoy: How long are Conservatives willing to keep living on the Republican plantation for whatever crumbs the Republicans provide?

Conservatives make up a larger proportion of the G0P than black do of the Democrats. Democrats want nothing to do with conservatives of any kind, ever. So you have the Republican party, or a third party, which really makes no sense, because it would just be the Republican party by a different name.

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Author: drebbin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111089 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 12:31 PM
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ShelbyBoy: There was no lack of activity where I live.

I'd like to know who didn't show up to vote. As in every single election that Republicans lose, the country club Republicans led the charge to blame social conservatives within minutes of the election being called. And, as in all other cases, the data shows that the social conservatives showed up in droves, playing Charlie Brown yet again. But the key to the 2012 election appears to be Republican voters who stayed home. It wasn't social conservatives. Who was it?

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Author: xLife Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111091 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 1:16 PM
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But the key to the 2012 election appears to be Republican voters who stayed home. It wasn't social conservatives. Who was it?

Who says any Republican voters stayed home?

There are 55 million voters registered as Republican and Romney got 59.1 million votes. That's only about 800,000 votes fewer than McCain got in 2008 and that difference could easily be accounted for by lower turnout in storm states. It's more likely that Romney lost independents than stay-at-home Republicans. I'd bet turnout among registered Republicans was higher this time than last.

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Author: twopairfullhouse Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111106 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 3:51 PM
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Here's a test though. Let's say the government needs $500 billion for something we all agree is very, very important. The only way to raise the money is by tax. How do you apportion the tax among, say, 100 million taxpayers?

Here's a test for you. Let's say the President spent $5.5 trillion, and no one knows what we got for it.* Let's also say that the media never asked, because it never thought it was a problem. Let's also say that 51% of the country isn't even curious enough to ask, largely because they think it will all be the problem of 'the rich' that they've been taught to hate. Now, let's say the Government says we need to pay more to pay off this debt, without even acknowledging that they have a spending problem. Let's also say that there are a few countries in southern Europe that are having riots over not being able to borrow any more to fund an unsustainable welfare state on an economy that has been crumbling for years.

Given the above, how would you get this 51% of the electorate to understand that maybe, just maybe, we have a debt problem? As in, while we still have time to do something about it?

Incidentally, I don't have a problem at all with expiration of the Bush tax cuts. Not at all. But I have a real problem with not solving the, uh, real problem.


* - and no, saying 'it would have been worse if we hadn't spent it' is a ridiculous non-answer, because the Government has to take money out of the economy in order to spend it, by borrowing, printing and/or taxing. Without proving (or at least factually arguing) that the projects on which this money was spent was a better use of the money than leaving it in the economy, you haven't addressed the question, which seems to be our President's greatest skill. Other than when he told us how he killed Osama with his bare hands, he hasn't really stated anything conclusive.

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111111 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 5:01 PM
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ShelbyBoy,

Not to hijack this thread by changing the point, but I'm much more interested in what's best for Conservatives than what's best for Republicans.

I addressed that (in my opinion) in an earlier post. What's best for conservatives is to start a new party. Normally that's a non-starter, because the two-party "fix is in". But there's probably never been a better time than today. A small-government, financially-responsible party that doesn't give a sh!t about micro-managing people's lives could probably grab over 90% of the Libertarians, well over half the Republicans, and a significant fraction of Democrats. Especially if this new party was smart enough to grab the color 'green' for themselves on the Electoral Maps ;-).

One problem I see is the "young generation" (I know, the oldsters are always grumping about the young 'uns). America's greatness has long stemmed from individual achievement. Today's youth doesn't care about individualism. They're into "social media". They want to be in the coolest group. And they're used to "free everything" from the Internet. They think their entire life is going to be full of free stuff, just like their youth has been (remember the "occupy" movement?). And who is going to give them free stuff besides the government?

Phil

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Author: twopairfullhouse Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111112 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 5:07 PM
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One problem I see is the "young generation"
...
And they're used to "free everything" from the Internet. They think their entire life is going to be full of free stuff, just like their youth has been (remember the "occupy" movement?). And who is going to give them free stuff besides the government?


That's a pretty big problem, given that the Democrats have locked up the 'Where's My Free Stuff?' constituency. You can't outbid, "I'll give you anything you want, and make the rich pay for it - just vote for ME!".

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111113 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 5:21 PM
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xLife,

He might be talking about the cost over a decade, not one year.

You think? In other words: you and I realize that, but how many average-Joe's did? Did the President talk about "people making more than $2.5 million per decade"? No. He talked about "people making more than $250,000 per year". So the $1 trillion number should have been per year as well.

The lower you go on the income ladder, the more likely it is that marginal income is immediately spent.

Could you run the "yacht tax" plan past me one more time?

What percentage of all income does the top 1% earn? It's not a rhetorical question. I can't find the answer.

Well, if you look a couple sentences higher in my post, you'll find that the top 1% earn less than 17% of all reported income (according to the latest IRS data). For these purposes, that's probably close enough to "all" income. Especially since no concrete data is available, obviously, on unreported income... so any number would be largely a guess (so far as the unreported portion goes).

Let's say the government needs $500 billion for something we all agree is very, very important. The only way to raise the money is by tax. How do you apportion the tax among, say, 100 million taxpayers?

You start a new thread asking that question. Is has nothing to do with: the Republican leadership should use their current negotiating leverage to pin the Democratic leadership down on a specific, quantifiable amount of how much "the rich should pay".

Probably because it's a stupid question. There is no specific number, nor need there be one.

I have to disagree. You should see the faces on the liberals when they say that a fair tax for "the rich" would be x, only to immediately be informed that the rich are already paying well over that. It's basically end-of-argument. How can you continue to argue that the rich don't pay enough taxes when they already pay more than the amount you've designated as fair?

While one could argue there's "no specific number" inherently, that doesn't mean there can't be a specific number practically. Engineering is full of situations where factors can barely be expressed in complex graphs, but none the less engineers come up with a single rule-of-thumb number that can be used to forge ahead in all but the most obscure cases. That's what the Republicans need to pin the Democrats down on. Some number that will serve as guidance in general. If it has to be two numbers, one for the modestly rich and another for the very rich, that'd be fine too. As long as it is well quantified. Currently (and historically) the Republicans face a moving target. No matter how much "the rich" pay, the Democrats will always say it isn't enough. The target needs to be nailed down.

Phil

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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111114 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 5:29 PM
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While one could argue there's "no specific number" inherently, that doesn't mean there can't be a specific number practically. Engineering is full of situations where factors can barely be expressed in complex graphs, but none the less engineers come up with a single rule-of-thumb number that can be used to forge ahead in all but the most obscure cases. That's what the Republicans need to pin the Democrats down on. Some number that will serve as guidance in general. If it has to be two numbers, one for the modestly rich and another for the very rich, that'd be fine too. As long as it is well quantified. Currently (and historically) the Republicans face a moving target. No matter how much "the rich" pay, the Democrats will always say it isn't enough. The target needs to be nailed down.

Phil
______________________

Sorry Phil, as we have seen over the decades, as far back as the Reagan administration and the agreements on spending and immigration being nailed down

The dems cloven hooves can be used like the end of a claw hammer and any nail is fair game.

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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111124 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 9:20 PM
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The Democrats say that "the rich" don't pay "their fair share". OK, stop being so vague. Exactly what is their fair share? Is that so much to ask?

While they are it, can they stop pretending that the middle class has a higher tax rate than the rich? Even being vague is preferable to outright lying.

According to data from the CBO, the rich have a *much* higher effective rate than the middle class:

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...

The first chart includes *all* federal taxes combined. The second chart includes just individual income taxes.

As you can see, the middle quintile had an effective income tax rate of just 1.3% as of 2009. The highest quintile had an effective rate of 13.4%. The top 1%? Just a *tad* higher than the middle quintile at 21.0%.

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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111125 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 9:40 PM
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Incidentally, I don't have a problem at all with expiration of the Bush tax cuts. Not at all. But I have a real problem with not solving the, uh, real problem.

I have a real problem with not *acknowledging* the, uh, real problem, which is the massive increase in non-defense spending.

The real source of our budget troubles

http://boards.fool.com/the-real-source-of-our-budget-trouble...

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Author: TheDope1 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111126 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 10:49 PM
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This is just a sterling example of demolishing a troll premise and curb stomping its argument. Well done!!

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Author: xLife Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111131 of 132660
Subject: Re: Best move for Republicans Date: 11/15/2012 11:47 PM
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Hint: that top 1% already pays almost 37% of the Federal income taxes paid.

Think I found the stat I was looking for. The top 1% earns about 20% of all income. The bottom 40% earns about 10% of all income.

http://www.theatlantic.com/business/archive/2012/09/us-incom...

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111134 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 1:05 AM
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xLife,

Think I found the stat I was looking for.

Wonderful. Now do you have anything to show that Lindert, Williamson, Piketty, and Saez didn't just make those stats up? Unreported income is, after all, unreported. How could anyone know?

If you like, I could make some stats up for you too. You wouldn't even have to Google for them.

Phil

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Author: 0x6a74 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111135 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 3:11 AM
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Hint: that top 1% already pays almost 37% of the Federal income taxes paid.

What percentage of all income does the top 1% earn?


what percentage of all taxes?
why always talk only about federal Income tax?
( any reason to think even that 37% isn't just made up?


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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111136 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 3:24 AM
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It's interesting here that tax cuts for the middle class will boost the economy (both for consumers and businesses), whereas tax cuts for the top 2% somehow... won't. Or at least it isn't worth mentioning.


The reason for that is easy - additional funds for the middle class to a large degree go into consumption increasing aggregate demand or into paying down debts, whereas (in the current economic climate) additional funds for the rich go into buying treasury bonds.

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Author: commoncents33 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111139 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 3:57 AM
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Blacks in the U.S. have been willingly living on the Democrat plantation for a long time now for whatever crumbs the Democrats throw their way.

How long are Conservatives willing to keep living on the Republican plantation for whatever crumbs the Republicans provide?



I agree completely.

The mixing of these two names, the two concepts in the minds of most Americans (including conservatives) has greatly hindered the conservative movement.

In the past, I've always felt that a vote for a third-party candidate is just a wasted vote. Now I'm starting to think that might be the only chance that true conservatism has.

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111140 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 4:16 AM
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0x6a74,

Not sure who your questions are aimed at, nor even which are quotes and which are questions. But I'll give it a go.

Hint: that top 1% already pays almost 37% of the Federal income taxes paid. — Radish

What percentage of all income does the top 1% earn?


As already posted, the top 1% earns a little less than 17% of reported income, according to the latest IRS figures. Clearly, no one knows what percentage of all income they earn, since that would include unreported income which, being unreported, obviously cannot be known with certainty.

what percentage of all taxes?

I don't know off the top of my head. Is there some relevance?

why always talk only about federal Income tax?

It was President Obama's press conference, and he only talked about Federal income tax. You'd have to ask him why.

( any reason to think even that 37% isn't just made up?

It's directly from the IRS's released data. Who would better know what Federal income tax was paid and what income was reported? I suppose that doesn't guarantee 100% that it isn't just made up, but it's pretty strong evidence that it's accurate, with some chance of an error of some sort.

Phil

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111142 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 4:18 AM
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AdvocatusDiaboli,

The reason for that is easy - additional funds for the middle class to a large degree go into consumption increasing aggregate demand or into paying down debts, whereas (in the current economic climate) additional funds for the rich go into buying treasury bonds.

Did you even bother to read the thread? That notion has already been covered.

Phil

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111143 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 4:22 AM
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commoncents33,

In the past, I've always felt that a vote for a third-party candidate is just a wasted vote. Now I'm starting to think that might be the only chance that true conservatism has.

Only if a strong Conservative party emerges. The existing parties are no where near Conservative, except perhaps the Libertarian Party (which is so extreme in certain positions as to be literally laughable). But this is, I think, the best opportunity for creating a third party in quite some time.

Of course, if a Conservative party was created now, it would either fail badly (like the Libertarians) or replace one of the two major parties. Without drastic changes, there simply cannot be three parties in the US.

Phil

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Author: Stonewashed Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111144 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 4:45 AM
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Well, have at it maybe you can argue in absolute obscurity with the libertarians and get a candidate like Ron Paul to get enough folks to excite you and hurt folks that are kind of like you but don't agree with you on everything.

Good luck I guess

______________________

Of course, the exact opposite happened and had those who played very dirty and not lied about and to them, then hijacked the part of the his message, they thought would serve them well, they might have ended up with their support.

They threw the youth vote under the proverbial bus.

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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111145 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 6:04 AM
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Well, have at it maybe you can argue in absolute obscurity with the libertarians and get a candidate like Ron Paul to get enough folks to excite you and hurt folks that are kind of like you but don't agree with you on everything.

Good luck I guess

______________________

Of course, the exact opposite happened and had those who played very dirty and not lied about and to them, then hijacked the part of the his message, they thought would serve them well, they might have ended up with their support.

They threw the youth vote under the proverbial bus.
________________________________________________

It was a mutual, front tires took care of Paulistas, back tires took care of Republicans

Likely cause? Paul was unwilling to take small to medium concession in the platform and wanted to make a statement. That would be his style, The Republicans certainly would have offered him something, they knew they were tossing votes in not doing so.

To get the Paul voters, they would have had to sacrifice other votes, the Libertarians threw the Republicans under the purity bus is a more likely scenario IMO, as to get it led through Ron Paul

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Author: Stonewashed Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111146 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 6:23 AM
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t was a mutual, front tires took care of Paulistas, back tires took care of Republicans

Likely cause? Paul was unwilling to take small to medium concession in the platform and wanted to make a statement. That would be his style, The Republicans certainly would have offered him something, they knew they were tossing votes in not doing so.

To get the Paul voters, they would have had to sacrifice other votes, the Libertarians threw the Republicans under the purity bus is a more likely scenario IMO, as to get it led through Ron Paul
_________________

Oh, please, by not allowing his delegates the seats they won (much of it illegal), which were clearly in the minority, and not counting their votes during the count AT ALL accomplished what? The GOP changing and making up rules as they went, which up until that time the GOP thought served them well, sneaking out back doors, lying about and to "Paulistas" accomplished what?

Hijacking their message of fiscal responsibility, which they by no means believed in, accomplished what? Backing candidates that sung who they thought the majority of "the folks" thought like, but didn't promoted what? A charicature of IDIOTS, not "the folks".

Not to worry. "The crazy uncle" is retiring.
His farewell speech:

snips

...neglect ushered in an age of redistribution of wealth by government kowtowing to any and all special interests, except for those who just wanted to left alone. That is why today money in politics far surpasses money currently going into research and development and productive entrepreneurial efforts.

The material benefits became more important than the understanding and promoting the principles of liberty and a free market. It is good that material abundance is a result of liberty but if materialism is all that we care about, problems are guaranteed.

The crisis arrived because the illusion that wealth and prosperity would last forever has ended. Since it was based on debt and a pretense that debt can be papered over by an out-of-control fiat monetary system, it was doomed to fail. We have ended up with a system that doesn’t produce enough even to finance the debt and no fundamental understanding of why a free society is crucial to reversing these trends.

If this is not recognized, the recovery will linger for a long time. Bigger government, more spending, more debt, more poverty for the middle class, and a more intense scramble by the elite special interests will continue....

We Need an Intellectual Awakening

Without an intellectual awakening, the turning point will be driven by economic law. A dollar crisis will bring the current out-of-control system to its knees.

If it’s not accepted that big government, fiat money, ignoring liberty, central economic planning, welfarism, and warfarism caused our crisis we can expect a continuous and dangerous march toward corporatism and even fascism with even more loss of our liberties. Prosperity for a large middle class though will become an abstract dream....

Dependency on Government Largesse

Today we face a dependency on government largesse for almost every need. Our liberties are restricted and government operates outside the rule of law, protecting and rewarding those who buy or coerce government into satisfying their demands. Here are a few examples:

Undeclared wars are commonplace.
Welfare for the rich and poor is considered an entitlement.
The economy is overregulated, overtaxed and grossly distorted by a deeply flawed monetary system.
Debt is growing exponentially.
The Patriot Act and FISA legislation passed without much debate have resulted in a steady erosion of our 4th Amendment rights.
Tragically our government engages in preemptive war, otherwise known as aggression, with no complaints from the American people.
The drone warfare we are pursuing worldwide is destined to end badly for us as the hatred builds for innocent lives lost and the international laws flaunted. Once we are financially weakened and militarily challenged, there will be a lot resentment thrown our way.
It’s now the law of the land that the military can arrest American citizens, hold them indefinitely, without charges or a trial.
Rampant hostility toward free trade is supported by a large number in Washington.
Supporters of sanctions, currency manipulation and WTO trade retaliation, call the true free traders “isolationists.”
Sanctions are used to punish countries that don’t follow our orders.
Bailouts and guarantees for all kinds of misbehavior are routine.
Central economic planning through monetary policy, regulations and legislative mandates has been an acceptable policy....


and the part "both sides" had a problem with

Supporters of all government edicts use humanitarian arguments to justify them.

Humanitarian arguments are always used to justify government mandates related to the economy, monetary policy, foreign policy, and personal liberty. This is on purpose to make it more difficult to challenge. But, initiating violence for humanitarian reasons is still violence. Good intentions are no excuse and are just as harmful as when people use force with bad intentions. The results are always negative.

The immoral use of force is the source of man’s political problems. Sadly, many religious groups, secular organizations, and psychopathic authoritarians endorse government initiated force to change the world. Even when the desired goals are well-intentioned—or especially when well-intentioned—the results are dismal. The good results sought never materialize. The new problems created require even more government force as a solution. The net result is institutionalizing government initiated violence and morally justifying it on humanitarian grounds.

This is the same fundamental reason our government uses force for invading other countries at will, central economic planning at home, and the regulation of personal liberty and habits of our citizens.

It is rather strange, that unless one has a criminal mind and no respect for other people and their property, no one claims it’s permissible to go into one’s neighbor’s house and tell them how to behave, what they can eat, smoke and drink or how to spend their money.

Yet, rarely is it asked why it is morally acceptable that a stranger with a badge and a gun can do the same thing in the name of law and order. Any resistance is met with brute force, fines, taxes, arrests, and even imprisonment. This is done more frequently every day without a proper search warrant.


http://www.economicpolicyjournal.com/2012/11/ron-pauls-farew...

Much more. Read it.

A real kook he was.

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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111147 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 6:29 AM
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Oh, please, by not allowing his delegates the seats they won (much of it illegal), which were clearly in the minority, and not counting their votes during the count AT ALL accomplished what? The GOP changing and making up rules as they went, which up until that time the GOP thought served them well, sneaking out back doors, lying about and to "Paulistas" accomplished what?

______________________

You are making an assumption that Paul had not made clear he was going to make his point and his point was going to lose a ton of votes.

You are making an assumption that the Republicans were not willing to offer Paul stuff to not make that happen

Do you really truly believe that?

The Republicans did not want to do what they did, that was a win for Paul not for the Republicans, the republicans took what they believed was the lesser of two losses.

There are always 2 parties involved. Your side, whichever side is 'Your' is always complicit to some degree --- always

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Author: Stonewashed Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111148 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 6:35 AM
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You are making an assumption that Paul had not made clear he was going to make his point and his point was going to lose a ton of votes.

___________________

YOU DO NOT DENY DELEGATES THEIR SEATS ILLEGALLY BECAUSE YOU DON'T LIKE THEIR POINT.

THEIR POINT WOULD HAVE BEEN OVERULED.

You did lost their vote.

Now live with it.

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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111149 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 6:42 AM
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YOU DO NOT DENY DELEGATES THEIR SEATS ILLEGALLY BECAUSE YOU DON'T LIKE THEIR POINT.

THEIR POINT WOULD HAVE BEEN OVERULED.

You did lost their vote.

Now live with it.
__________________________

I did not lose anything, I side with them. I agree more with Paul than any other candidate.

I do not agree with what they did.

I do however understand what they did. I also understand what they did was what they thought would lose them the least amount of votes. I also understand that I will not ever know if they were correct. They may have lost fewer votes but not had enough either way once this fight was on

I do know had the libertarians compromised through Paul before the convention, and cut a deal, rather than in libertarian style refuse being flexible what would have been done

You did win the election for Barrack Obama
Now live with it

Do you think haughty pronouncements sound better when someone makes an equally valid though useless statement?

That Republicans would have won the election.

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Author: Stonewashed Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111150 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 7:03 AM
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You did win the election for Barrack Obama
Now live with it

_____________

Did I now?

I voted for Romney, despite the merciless, corrupt shennanigans the GOP as a whole pulled, who in fact were more against Romney than Paul was and despite the overzealous, obnoxious behavior of certain unamed enthusiastic supporters of Romney who probably did things in his name, that blew up in Romney's face.

Nope. The GOP and obnoxious, spoile brat brown nosers, gave it to Obama because they thought they were masters of the game of manipulation.

They can live with it and double down on luring those who in reality they have zilch, zero respect for or grow up.

Fascism, for now, is here to stay.

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111156 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 8:38 AM
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Did you even bother to read the thread? That notion has already been covered.

I missed xLife's comment on the issue.
However:

Could you run the "yacht tax" plan past me one more time?

That seems to me to be a total non-sequitur to what xLife (or I) said.
How is this supposed to address it? (Sorry should I have missed any more comprehensive statement in the thread on the issue)

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Author: iamski Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111157 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 8:46 AM
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While they are it, can they stop pretending that the middle class has a higher tax rate than the rich? Even being vague is preferable to outright lying.

You can tell that story if you compare marginal rates of the poor to effective rates of the rich.

Look at that middle class taxpayer in the 28% bracket paying more tax than my effective 21%.

Easy peezy chicken sqeezy to get the uninformed to buy into. If you try to explain it. you're a poor people hating racist.

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Author: twopairfullhouse Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111166 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 9:39 AM
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While one could argue there's "no specific number" inherently, that doesn't mean there can't be a specific number practically. Engineering is full of situations where factors can barely be expressed in complex graphs, but none the less engineers come up with a single rule-of-thumb number that can be used to forge ahead in all but the most obscure cases. That's what the Republicans need to pin the Democrats down on. Some number that will serve as guidance in general. If it has to be two numbers, one for the modestly rich and another for the very rich, that'd be fine too. As long as it is well quantified. Currently (and historically) the Republicans face a moving target. No matter how much "the rich" pay, the Democrats will always say it isn't enough. The target needs to be nailed down.

Exactly, which highlights why xLife and others don't want to answer the question, preferring instead to call it stupid. Once you answer what that percentage would be, you start a whole cascade of mathematical and logical progression, which ends with the realization that you can't tax the rich until everyone is prosperous. It's much better to state that 'the rich aren't paying their fair share' without numbers that people might actually have to think about.

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Author: drebbin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111168 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 9:56 AM
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Radish: I have to disagree. You should see the faces on the liberals when they say that a fair tax for "the rich" would be x, only to immediately be informed that the rich are already paying well over that. It's basically end-of-argument. How can you continue to argue that the rich don't pay enough taxes when they already pay more than the amount you've designated as fair?

While you are doing a fine job exposing the intellectual dishonesty of the troll, that was something that was never in doubt. If there is no "specific" number, then how about a ballpark figure? No, they don't want that either. It just always has to be "more". The "rich" don't pay enough and have to be taxed more. This is the war chant of people who don't even want to know if what they are clamoring for makes any sense. It is simply their perpetual rallying cry. How do they know the rich need to pay more, if there is no number that represents how much they should pay? What if the rich were paying 98% of their income in taxes, would they still need to pay more? Apparently so.

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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111173 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 11:32 AM
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What if the rich were paying 98% of their income in taxes, would they still need to pay more? Apparently so.
___________________

I was reading a liberal post earlier today

the basic thought was that another few percent would not be a problem, it is not like if we charge them more they will have to shop at Walmart

WHich I thought was kind of cute. It really encapsulates the liberal mindset -- if they have enough to not be in poverty, bring them to poverty, if they are in poverty cause the places they shop to be more expensive to be fair.

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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111174 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 11:35 AM
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Hint: that top 1% already pays almost 37% of the Federal income taxes paid.

What percentage of all income does the top 1% earn?


Apparently someone can't read the thread.

what percentage of all taxes?

Irrelevant, because we aren't talking about state taxes.

why always talk only about federal Income tax?

Because it's the large majority of federal taxes, and the most readily available figure.

( any reason to think even that 37% isn't just made up?

Well, it comes from the IRS. If you don't trust them to tell us the truth about the taxes they collect, then why do you think we should trust them with more of our money?

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Subject: Re: Best move for Republicans Date: 11/16/2012 11:46 AM
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Wonderful. Now do you have anything to show that Lindert, Williamson, Piketty, and Saez didn't just make those stats up?

Nope. Read the article, not the paper. Do you have any reason to beleive they're made up?

If you like, I could make some stats up for you too.

No thanks. There are enough completely made up stats proffered on this board already.

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Subject: Re: Best move for Republicans Date: 11/16/2012 11:51 AM
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The reason for that is easy - additional funds for the middle class to a large degree go into consumption increasing aggregate demand or into paying down debts, whereas (in the current economic climate) additional funds for the rich go into buying treasury bonds.
---
Did you even bother to read the thread? That notion has already been covered.


"Covered" as in raised? Or "covered" as in addressed and rebutted?

I think the original question was something like "why, if tax cuts are good for the economy, then why just cut taxes for the middle class and not the rich?" The above is a good answer to that question.

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Author: twopairfullhouse Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111223 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 3:59 PM
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I think the original question was something like "why, if tax cuts are good for the economy, then why just cut taxes for the middle class and not the rich?" The above is a good answer to that question.

I think that the whole discussion about tax rates is akin to complaining about the comfort level of a deck chair on the Titanic. What the h#ll difference will 36% or 40% tax rate mean if we become Greece? We're at $16 trillion, headed for $20 trillion before The One leaves office and can blame the whole mess on his successor. Does anyone else see this as a problem? Jeez Louise.

I understand that the Republicans are fighting to keep a progressive tax system from becoming more progressive, and that's a key point. The Democrats have been able to lie about how much the rich already pay, but that's why the Republicans should not just b!tch about the situation, but keep repeating the truth. We see how effective repeating the lies are for the Dems. At the end of the day, though, I think they lose on the tax cuts for those above $250K, but they need to bloody the nose of Obama with respect to the lies he's been telling about how 'the rich don't pay their fair share.'

The other key point is that there is a massive spending problem, and the Republicans need to address this proactively. Yes, military spending will be cut, but there needs to be a pro rata cut of all entitlements, and throw Big Bird under the bus, too. Hair cuts for everyone! Well, feather cuts for Big Bird, but you know what I mean. He's had a cushy nest for too long.

The Republicans should embrace Simpson-Bowles, and then use it as a cudgel against the Dems (and especially the corrupt media, when they look to insert 'obstructionist' before each instance of 'Republican'; it's so often, it must be an Auto-correct setting in the journalist version of Word). Simpson-Bowles is both a shield and a sword at this point. The first one to claim it gets to use it. Let the Hunger Games begin, and may the odds be ever in your favor!

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111242 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 7:57 PM
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AdvocatusDiaboli,

I missed xLife's comment on the issue.

He said "The lower you go on the income ladder, the more likely it is that marginal income is immediately spent.", which is pretty much what you said. To your credit, you did specifically mention treasury bonds. However, you gave nothing to support your notion that "the rich" would use the money they don't have to pay in taxes to buy treasury bonds as opposed to any other investment (or expenditure).

Could you run the "yacht tax" plan past me one more time? — Radish

That seems to me to be a total non-sequitur to what xLife (or I) said.


It's not. xLife apparently realized it was all that needed to be said on the topic. It refers to the 1990 "luxury tax" on yachts which was supposed to raise revenues, but in reality caused layoffs in the yacht-building industry, a shift of yacht buying to sources outside the US, and a loss of the taxes on the yacht sales, the income taxes on the yacht-building companies, the income taxes on the workers who were laid off, and the added expense of unemployment compensation to the yacht works.

Basically, it highlights the complete lack of understanding liberals in general seem to have of finances, particularly financial transaction involving "the rich". Aside from government bonds, which you mentioned, and sending their money outside the US, "the rich" essentially have no choice but to spend their income in some way. If they "invest" in stocks, those stocks have to be bought from someone. The largest holders of stocks in the US are the large funds that middle-class American has their retirement money in. So a lot of "the rich"'s money they get to keep from a tax cut goes pretty much straight to the middle class. If they buy stock from an IPO (a rare event, these days), the company gets the money, and that company buys stuff and hires people. Again, the money goes straight to mainstream America. And so on. "The rich" don't tend to stick their money under a mattress... which is (aside from the two methods I just mentioned) virtually the only way to not "immediately spend" the money (as xLife put it).

The idea that money that the middle class is permitted to keep (rather than pay in taxes) will result in more consumption than such money kept by "the rich" is ridiculous.

Phil

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111245 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 8:04 PM
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xLife,

Do you have any reason to believe they're made up?

Yes. 83% of all facts on the Internet are just made up. See http://drtimball.com/2011/83-percent-of-all-statistics-are-m... So the odds are pretty good.

Phil

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111246 of 132660
Subject: Re: Best move for Republicans Date: 11/16/2012 10:15 PM
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It refers to the 1990 "luxury tax" on yachts

I know the story. It's just that a tax on conspicuous consumption, targeting a specific item, has absolutely nothing to do with the tax proposition at hand, which is a tax on income.
It's economic effects are of a totally different nature (though they both affect the economy negatively in different ways and to different degrees, of course).



"The rich" don't tend to stick their money under a mattress... which is (aside from the two methods I just mentioned) virtually the only way to not "immediately spend" the money (as xLife put it).

No, "the rich" can invest their money into TREASURY BILLS. In other words, they can lend the government the money that the government needs to finance their tax cuts. This is what they are doing currently due to the economic situation. That is the very definition of a useless exercise.
Corporations are flush with cash, and profit margins are at a high. Yet businesses are not investing because there is a lack of aggregate demand and because of the risk of a European meltdown and the fiscal cliff.

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111254 of 132660
Subject: Re: Best move for Republicans Date: 11/17/2012 7:09 AM
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Phil, sorry I didn't address this paragraph fully:

Aside from government bonds, which you mentioned, and sending their money outside the US, "the rich" essentially have no choice but to spend their income in some way. If they "invest" in stocks, those stocks have to be bought from someone. The largest holders of stocks in the US are the large funds that middle-class American has their retirement money in. So a lot of "the rich"'s money they get to keep from a tax cut goes pretty much straight to the middle class. If they buy stock from an IPO (a rare event, these days), the company gets the money, and that company buys stuff and hires people. Again, the money goes straight to mainstream America. And so on. "The rich" don't tend to stick their money under a mattress... which is (aside from the two methods I just mentioned) virtually the only way to not "immediately spend" the money (as xLife put it).

I really don't see how shuffling stockholdings around benefits the middle class. Yes, you can make the case that a tax cut for the rich increases demand for stocks and thus marginally increases share prices. That's really not a good way of boosting the economy and does extremely little for the middle class. What a tax cut does mostly is give the rich money to invest. What they invest it in depends on what the economic demand situation is like. If it is like it is now, they won't invest it into creating new capacity (which is what the IPO does), they'll invest it into existing stocks or bonds or T-bills. This will not lead to increased capacity in the absence of an uptrend in demand.
Again, most companies are flush with cash, they have no need of additional capital to expand. They're not expanding due to the absence of demand.
And to get an uptrend in demand, you got to give the money to those who spend it on actual stuff.

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Author: iamski Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111258 of 132660
Subject: Re: Best move for Republicans Date: 11/17/2012 8:43 AM
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they'd like to hear from the Democratic leaders exactly what the rich's fair share is. That is, as a specific number.

That would be like asking what to id the correct temperature for our Globe so that we could intelligently discuss the validity of global warming, it's causes, interim and final solutions and metrics to realize in order to know if our solutions has been a success.

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Author: Jim2B Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111259 of 132660
Subject: Re: Best move for Republicans Date: 11/17/2012 8:57 AM
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No, "the rich" can invest their money into TREASURY BILLS. In other words, they can lend the government the money that the government needs to finance their tax cuts. This is what they are doing currently due to the economic situation. That is the very definition of a useless exercise.
Corporations are flush with cash, and profit margins are at a high. Yet businesses are not investing because there is a lack of aggregate demand and because of the risk of a European meltdown and the fiscal cliff.


You are not wrong about the rich's ability to invest in T-Bills. But you are wrong about whether the rich *are* investing in T-Bills. It is the US Federal Reserve that is investing in T-Bills to keep interest rates low, not the rich or corporations.

As for corporations "flush with cash"... You do realize that they don't just have a bank vault filled to overflowing with currency, right?

When a company discusses "cash", they are actually talking about short term financial instruments, that possess good liquidity, and whose capital value is relatively secure.

They could purchase T-Bills but that doesn't mean they are. They could be purchasing short-term corporate bonds, money markets, CDs, etc. They can also buy-back stock, increase dividends, or invest in other companies.

Putting this in more simple terms, that money goes back into the economy in some manner and is not removed from circulation.

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111301 of 132660
Subject: Re: Best move for Republicans Date: 11/17/2012 10:43 PM
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AdvocatusDiaboli,

No, "the rich" can invest their money into TREASURY BILLS.

Yes, they can, and so can the middle class (especially easy with Treasury Direct). And if either do, for the economy that's pretty much the same as not getting the tax cut (that is, the money stays with the government either way).

But do you have any evidence that "the rich" would invest a significant portion of any tax cut into government bonds? It seems like there are plenty of higher-yield alternatives... especially for "the rich".

Phil

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111302 of 132660
Subject: Re: Best move for Republicans Date: 11/17/2012 10:49 PM
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AdvocatusDiaboli,

I really don't see how shuffling stockholdings around benefits the middle class.

I said it benefits the economy, not the middle class. When "the rich" buy stocks, the money doesn't just hide in some mysterious corner of some stock market building. To give just one example, some of the larger funds contain a great deal of retirement plan investments. When "the rich" buy shares of that fund, someone else (generally) sells those shares to them. If that's a retirement plan selling, odds are the money goes to cover the retirement payouts. In other words, directly into the general economy.

Again, no matter where "the rich" invest their money, it's going into the general economy in some form or another. The only significant exceptions are when they buy government bonds or take the money out of the country. It's really not significantly different, to the economy, than the middle class rushing out and spending their money.

Phil

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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111305 of 132660
Subject: Re: Best move for Republicans Date: 11/17/2012 11:03 PM
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Again, no matter where "the rich" invest their money, it's going into the general economy in some form or another. The only significant exceptions are when they buy government bonds or take the money out of the country. It's really not significantly different, to the economy, than the middle class rushing out and spending their money.

On the latter point, there's one exception:

If the rich spend their money on creating new capacity - whether it be new factories to produce stuff, or new stores to sell stuff to customers, or new trucks to move stuff from factory to store, or anything else - then there is at least a chance that it is making the country as a whole richer.

(And if that doesn't happen, the rich take the hit first. Because wealth doesn't trickle down. It trickles up. The workers get paid to BUILD the new capacity - and taxes get paid on that. Then the workers get paid to OPERATE the new capacity - and taxes get paid on that. Then, if there's anything left, it goes to the people who put up the money in the first place - and to the extent that it is profit, taxes get paid on that too.)

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111306 of 132660
Subject: Re: Best move for Republicans Date: 11/17/2012 11:24 PM
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If that's a retirement plan selling, odds are the money goes to cover the retirement payouts. In other words, directly into the general economy.

So without the tax cut, the retirement plan wouldn't manage to sell their assets?
That is obviously not the case. As I said, the most this achieves is that *maybe* asset prices are marginally higher so the pension fund gets a tiny amount of additional money for its sale.

If you want to increase demand for goods and service, you give money to the people who are most likely to spend it on goods and services, not those who will buy assets or lend the money to others.

Everything else is inefficient.

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111312 of 132660
Subject: Re: Best move for Republicans Date: 11/18/2012 3:20 AM
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AdvocatusDiaboli,

So without the tax cut, the retirement plan wouldn't manage to sell their assets? That is obviously not the case.

Clearly they would, but probably at a lower price.

As I said, the most this achieves is that *maybe* asset prices are marginally higher so the pension fund gets a tiny amount of additional money for its sale.

Agreed, but that additional amount is, of course, the tax cut money. Going directly into the general economy.

So let's hear your example of how "the rich" would invest the money they keep from a tax cut, other than in government bonds or moving it out of the country, that wouldn't flow into the general economy. What closet can they stick their money in where it just sits there, with no cascading of transactions?

If you want to increase demand for goods and service, you give money to the people who are most likely to spend it on goods and services, not those who will buy assets or lend the money to others.

Who said anyone wanted to increase demand for goods or services? We're talking about a boost to the economy, which could take many forms. And why on Earth would you "give money" to anyone? Where would that money come from, some Money Fairy? You'd have to take it from someone in order to give it to someone else. Pretty narcissistic to think that you, Lord Of All Things Financial, know which people should have money taken away and which should have money "given". (Or any person, not "you" specifically.)

And if they buy assets or lend the money to others, how does it not then flow into the general economy? What does the person who sells the assets do with the money? Or the person who borrows it? How is a "rich" person buying an asset different from a middle-class person buying a big-screen TV? Of course Warrl has already pointed out that "the rich" might buy new equipment for factories, thus turning out products for a lower cost, and enriching everyone who can then buy those products for less. A poor person is unlikely to do this. A middle-class person... maybe.

Everything else is inefficient.

Unless of course you take Warrl's point where "the rich" improving a factory so a company can make big-screen TV's for cheaper, so everyone who buys those TV's can get them for a little less (then buying a slew of other products with the remaining money) might be, just maybe, more economy-boosting than a bunch of middle-class people spending the same money on buying a bunch of big-screen TV's for the same-old price.

But even if it is "inefficient", it can hardly be more inefficient than The Central Committee trying to run the economy by deciding who gets what. At least historically speaking.

Phil

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111313 of 132660
Subject: Re: Best move for Republicans Date: 11/18/2012 4:14 AM
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Agreed, but that additional amount is, of course, the tax cut money. Going directly into the general economy.


No, that's not how it works. All asset prices are marginally higher (possibly), meaning that everyone pays and gets higher prices for their assets, not only the guy who got the tax cut.
That said, it's not even clear that asset prices would be higher at all, because because with a debt-financed tax cut demand for assets rises BUT SO DOES SUPPLY, as there's now additional T-bills available for purchase. So I am not sure if asset prices increase at all.
In any case, if you want to pump asset prices, you can do that far more cheaply by increasing demand for assets simply by having the Fed buy T-bills, forcing people to buy other assets (stocks etc.) instead.
That doesn't require a costly tax cut.

So let's hear your example of how "the rich" would invest the money they keep from a tax cut, other than in government bonds or moving it out of the country, that wouldn't flow into the general economy.

Basically, it's t-bills. Either directly or down the chain (e.g. the recipient of the tax cut buys stocks, the person selling those stocks buys the t-bills instead).


And if they buy assets or lend the money to others, how does it not then flow into the general economy? What does the person who sells the assets do with the money? Or the person who borrows it? How is a "rich" person buying an asset different from a middle-class person buying a big-screen TV? Of course Warrl has already pointed out that "the rich" might buy new equipment for factories, thus turning out products for a lower cost, and enriching everyone who can then buy those products for less. A poor person is unlikely to do this. A middle-class person... maybe.


When I am talking about assets I mean assets such as securities, not consumer etc. Rich people will largely use the money to buy securities, poor people and the middle class will use it to finance consumption, increasing demand for real good.
The kind of company that benefits from a general increase in the investment into stocks and bonds is currently not capital constrained. If you're, say, IBM, Microsoft or McDonalds (but also if you're a mid- to large sized private company) you have all the capital you need to finance investments. If a company isn't making such investments right now it's because it doesn't think they are wise from a business standpoint. Providing such a company with more money is not going to change that.
There are a great many countries (third world nations) where this is very different mostly due to dysfunctional capital markets, title insecurity (real estate) and lack of a reliable justice system. There companies on all levels tend to be capital constrained and facilitating access to capital is the number one priority to promote economic growth.

In the US, however, company growth is demand-constrained.

You said:
Of course Warrl has already pointed out that "the rich" might buy new equipment for factories, thus turning out products for a lower cost, and enriching everyone who can then buy those products for less.

Given that there is no shortage of capital for such investments in most companies, why is the company not doing that right now?
Your argument would make sense if there was an apparent capital constraint, but that just isn't currently the case for the majority of companies.

Pretty narcissistic to think that you, Lord Of All Things Financial, know which people should have money taken away and which should have money "given".

Well if trying to understand the workings of the economy is narcissistic, then I guess I'm a narcissist.

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Author: Jim2B Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111328 of 132660
Subject: Re: Best move for Republicans Date: 11/18/2012 11:58 AM
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No, that's not how it works. All asset prices are marginally higher (possibly), meaning that everyone pays and gets higher prices for their assets, not only the guy who got the tax cut.

Actually, that is not how it works.

You play around with averages and equilibrium concepts but the market definitely does not work that way.

You might buy a car with your tax break. I might buy new windows for my house. In each case we invest our money in what we perceive to bring us the highest value for the money spent. In my case, that would be reduced energy bills. In your case it might be decreased fuel bills.

In each case we receive (or at least perceive) a return greater than our investment! This is almost always true.

The government also works on averages and equilibrium concepts and CANNOT make the correct decisions for us. Instead it invest in green energy companies (which go bankrupt) and automobile makers (who lose value). Investments made by the government almost always destroy wealth by earning returns less than the investment.

Here's a simple rule of thumb, not always true but on average it is true:

Government investments of $1, return < $1
Private investments of $1, return > $1

Jim

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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111351 of 132660
Subject: Re: Best move for Republicans Date: 11/18/2012 4:01 PM
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AdvocatusDiaboli,

So let's hear your example of how "the rich" would invest the money they keep from a tax cut, other than in government bonds or moving it out of the country, that wouldn't flow into the general economy. — Radish

Basically, it's t-bills. Either directly or down the chain (e.g. the recipient of the tax cut buys stocks, the person selling those stocks buys the t-bills instead).


You're saying t-bills, which are bonds issued by the Federal government, are an example of an investment which isn't a government bond. I think we're done here.

Phil

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 111363 of 132660
Subject: Re: Best move for Republicans Date: 11/18/2012 6:38 PM
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You're saying t-bills, which are bonds issued by the Federal government, are an example of an investment which isn't a government bond.


No, I was referring to an investment in government bonds. My assumption is that in the current economy, this is where a tax cut that is invested and securities, and not spent on consumption, ends up.

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