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Author: rclaussen Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1950572  
Subject: Fiscal Cliff & Debt Ceiling Date: 12/12/2012 10:56 PM
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My representative sent me an email requesting I complete a survey. I did complete the survey and provided the following comments. In addition, I elected to share my comments with the leaders who will be making decisions in the near future that will have an impact on our investments, our economy, and our county’s future. Perhaps your elected official will seek your comments. Even if they do not, it is important for you to take the responsibility and communicate with them.

Thanks,
Bob




Wednesday, December 12, 2012

President Barack Obama
Vice President Joe Biden
The Honorable John Boehner, Speaker of the House
The Honorable Eric Cantor, Majority Leader
The Honorable Kevin McCarthy, Majority Whip
The Honorable Nancy Pelosi, Minority Leader
The Honorable Steny Hoyer, Minority Whip
Senator Dan Inouye, President Pro Tempore
Senator Harry Reid, Majority Leader
Senator Mitch McConnell, Minority Leader
Senator Sherrod Brown
Senator Rob Portman
The Honorable Steve Stivers

I commend my representative Steve Stivers for reaching out and requesting thoughts from his constituents on the Fiscal Cliff. I sent a reply, and then thought about it. I decided to send a second reply to elaborate and clarify thoughts from the first reply. Given the effort of Representative Stevens, I thought it would be appropriate to share my responses with you.

Robert B. Claussen

The choice I used in the survey was:

“:If you selected "I have another solution", please share your solution here.”

First response:

“Combination of raising taxes at the top, moderate spending cuts (not involving entitlements - raising the age for Medicare is a net cost to the economy and simply passes an increased cost to individuals [need to purchase private insurance for the two years from 65 - 67 at an estimated cost of 11.2 billion and only save 5.1 billion for Medicare for a net cost increase to the economy of 6.1 billion]); get busy and pass jobs bills - best way to whittle down the deficit and debt.”


Second response:

“This is not necessarily related to the Fiscal Cliff, but it is something likely to come up early next year - raising the debt ceiling. In 2011, while there was damage to the U.S. economy, the monetary damage was 1.3 billion for 2011, and more than 18 billion over the next ten years. If you and your party attempt to hold the country hostage again, I suspect the damage will be far more critical and long lasting as the faith in the U.S. Dollar and our commitment to meet our obligations crumbles. That would be devastating and add to the perception we cannot govern. The deficit and debt are long term problems. Our immediate problem is to restore confidence that we can govern effectively and create an environment in which the gains from our current level of job creation can be exponentially enhanced. That is why in my first response I emphasized job creation. That more than anything else will address the deficit and debt. It actually is a two fold benefit. First it reduces spending as those who are now reliant on the safety net reduce or eliminate their reliance. Second, the revenue received from the newly employed can be used to further address the deficit and debt. If you and your party cannot understand the benefit of growing the economy through the creation of jobs, then perhaps we need to find and elect individuals who can. And if you chose to use raising the debt ceiling to hold the country hostage to your idea of spending cuts, you will lose. The election was held and your ideas of how to address the issues lost. Persistence in pushing those discredited ideas will do serious damage to our economy and our standing in the eyes of the world, leading to a far greater impact on your party in 2014.”




Record of Sent Times:

President Barack Obama Sent Wednesday, December 12, 2012 @ 10:09 PM
Vice President Joe Biden Sent Wednesday, December 12, 2012 @ 10:11 PM
The Honorable John Boehner, Speaker of the House Sent Wednesday, December 12, 2012 @ 10:15 PM
The Honorable Eric Cantor, Majority Leader Sent Wednesday, December 12, 2012 @ 10:51 PM
The Honorable Kevin McCarthy, Majority Whip (Unable to Contact)
The Honorable Nancy Pelosi, Minority Leader (Unable to Contact)
The Honorable Steny Hoyer, Minority Whip Sent Wednesday, December 12, 2012 @ 10:21 PM
Senator Dan Inouye, President Pro Tempore Sent Wednesday, December 12, 2012 @ 10:23 PM
Senator Harry Reid, Majority Leader Sent Wednesday, December 12, 2012 @ 10:25 PM
Senator Mitch McConnell, Minority Leader Sent Wednesday, December 12, 2012 @ 10:27 PM
Senator Sherrod Brown Sent Wednesday, December 12, 2012 @ 10:29 PM
Senator Rob Portman Sent Wednesday, December 12, 2012 @ 10:30 PM
Representative Steve Stivers Sent Wednesday, December 12, 2012 @ 10:33 PM
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Author: jerryab Big gold star, 5000 posts 4 Year Anniversary! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1844633 of 1950572
Subject: Re: Fiscal Cliff & Debt Ceiling Date: 12/13/2012 10:44 AM
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I would add the following, which I wrote and posted some time ago. It does exactly what you stated needed to be done IF the claim "the wealthy create a lot of jobs in the US" is actually true. Perhaps that claim is NOT true? That would explain why conservatives do NOT want their claim to be tested and then exposed as a lie with irrefutable facts documented by the IRS over a number of years....

----------------------------------------

Use tax benefits (= "tax cut") to offset tax increases exclusively on the the wealthy only if they create jobs in the US (additional benefits can be offered at the state level by the states if they should choose to do so). Tax benefits are only available for full-time jobs, hiring part-time workers will not be rewarded with this tax benefit.

The obligation of the government is to take in enough income (fees, taxes, etc) to cover the cost of running the government and providing public services.

The claim by conservatives is tax cuts (especially to the wealthy) create jobs. Ok, "We, the People" will you up on that claim--and tie tax benefits to jobs created by those specific alleged "job creators".

Here is how to do it responsibly:

Step 1: Create a new tax exclusively on the wealthy--enough to help with the current budget. Result: The government is now getting substantially more tax revenue. Say it is $150,000 per year per wealthy taxpayer.

Step 2: Create a new tax benefit of $XXXX/year for each new/additional job created for a minimum number of months (to be determined, i.e. 36 months? 48 months?). The benefit can be used for up to 2-4 years (as long as the new/additional job still exists), depending on the economy and government policy. Benefits need to be tiered by the year so no one is able to run a scam. Tax benefits are paid after the year is over, so it is only for real businesses that last a significant length of time.

Example of how the tax benefit works (numbers are for illustrative purposes only):

Rates:

Year 1: $2000
Year 2: $3500
Year 3: $4500

First year: $2000/new employee who worked the entire year (no benefit for new employees less than 6 months, pro rate for 9+ months?), 100 new employees = $200,000 benefit ($2000 x 100). Business has 100 total full-time employees. Hires 50 new employees to start the second full year.
Second year: $3500/employee who worked the entire second year. Original 100 employees work second year = $350,000 tax benefit. The 50 new employees worked that full year, they count for the first-year deduction and the amount is 50 x $2000 = $100,000 additional deduction. Now 150 total full-time employees.
Third year: $4500/employee who worked the entire third year. Same 100 employees work third year = $450,000. Same 50 newer employees work second year = $175,000. 150 total full-time employees. Hires 100 new workes to start the fourth year. Total employees = 150.
Fourth year: Benefit ends for the first 100 employees. This is third year for those same 50 employees who started the second year= $225,000. If the 100 new workers work all year, that is another $200,000 deduction for fourth year, $350,000 the fifth year, and $450,000 the sixth year. Total employees = 250.

Total tax benefits paid = $200k + $350k + $100k + $450k + $175k + $225k + $200k + $350k + 450k = $2.725-million vs a tax increase of $900k.

Analysis: $2.725-million tax benefit less $900k higher taxes over six years = net cost of $1.825-million to govt. Cost per job created = $1.825-million/250 = $7300.

Can not fire existing workers and hire new workers to restart benefits. Must be *additional* jobs created. No additional jobs created = no tax benefit.

Given the above information, the business is obviously successful (hired more people and kept them on), so the business venture is also profitable.

Because the wealthy create large businesses with many new employees, the tax benefit more than offsets the tax increase and will help fund the cost of new workers. Hiring new employees is a business decision made by the business. The tax benefit is designed to help in the first few years of adding new workers, when business needs the most help with expansion.

This is the "put up or shut up" point in the entire discussion:

If the wealthy actually create a lot of new/additional jobs in the US (as claimed by conservatives), then they will create more jobs in order to take advantage of the tax benefit. They can choose to create many more jobs in the US--which would create an even bigger tax benefit for them than was available previously.

The only jobs eligible for the tax benefit would be additional jobs created by those who pay that higher tax rate, not replacement jobs (i.e., transferring jobs between companies to get the tax benefit would not count). This would also be available to all those "small/medium" business owners who do create jobs AND pay the higher tax rate on the wealthy. If they do not pay the higher tax rate for the wealthy, they can not get the tax benefit of the deduction.

If new jobs are created by the wealthy who pay the higher tax rate, the country will receive additional taxes, spending, and a nice stimulus from the new employees to offset the tax benefits issued. Net cost to government: Reasonably close to zero over the long term because new jobs generate taxes and additional new jobs.

Now the arguing can commence over the amount of the tax benefit, how long it would last (for each job created), and how much taxes on the wealthy go up.

The budget deficit is smaller--and we can get on with our lives.

If the wealthy do create additional jobs (as alleged), they will be rewarded with tax benefits and profits from their business ventures. That is the definition of a "business friendly" environment.

If the wealthy do not create additional jobs in the US, that is their choice. They simply pay more in taxes here to offset their choice of creating jobs elsewhere (or not at all). That is fair for everyone.

It's not personal, it's business.

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Author: rclaussen Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1844704 of 1950572
Subject: Re: Fiscal Cliff & Debt Ceiling Date: 12/13/2012 1:29 PM
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Hi jerrab,

Thank you for your thoughts. To give them a wider and perhaps more influence audience, I incorporated them into an email with our political leadership. A copy of that email appears below.

Thanks,
Bob


Thursday, December 13, 2012

President Barack Obama
Vice President Joe Biden
The Honorable John Boehner, Speaker of the House
The Honorable Eric Cantor, Majority Leader
The Honorable Kevin McCarthy, Majority Whip
The Honorable Nancy Pelosi, Minority Leader
The Honorable Steny Hoyer, Minority Whip
Senator Dan Inouye, President Pro Tempore
Senator Harry Reid, Majority Leader
Senator Mitch McConnell, Minority Leader
Senator Sherrod Brown
Senator Rob Portman
The Honorable Steve Stivers

I wrote to you on Wednesday, December 12, 2012 in response to a survey by my representative Steve Stivers. In my response, I suggested an approach to resolving the deficit and debt involved growing the economy by building on our current job growth. Not only will an increase in job growth deal with the deficit and debt, it will address issues with the “entitlement” programs. In sharing my thoughts with others, jerryab brought up an idea that offers promise and may settle the argument about taxing ”Job Creators.” I’ll share some of his thoughts here. For a full explanation, please follow the attached link.

I appreciate jerryab’s willingness to look at different and innovative ways to resolve our issues. It is time our elected leaders expanded their horizons and thinking to incorporate solutions not based on ideology, but based on facts and what works for the country to enhance our growth.

Thanks,
Bob Claussen



“I would add the following [in response to what was shared with jerry], which I wrote and posted some time ago. It does exactly what you stated needed to be done IF the claim "the wealthy create a lot of jobs in the US" is actually true. Perhaps that claim is NOT true? That would explain why conservatives do NOT want their claim to be tested and then exposed as a lie with irrefutable facts documented by the IRS over a number of years....”

“Use tax benefits (= "tax cut") to offset tax increases exclusively on the wealthy only if they create jobs in the US (additional benefits can be offered at the state level by the states if they should choose to do so). Tax benefits are only available for full-time jobs, hiring part-time workers will not be rewarded with this tax benefit.”

“If the wealthy do create additional jobs (as alleged), they will be rewarded with tax benefits and profits from their business ventures. That is the definition of a ‘business friendly’ environment.”

“If the wealthy do not create additional jobs in the US, that is their choice. They simply pay more in taxes here to offset their choice of creating jobs elsewhere (or not at all). That is fair for everyone.”

“It's not personal, it's business.”

http://boards.fool.com/fiscal-cliff-debt-ceiling-30429335.as...



Record of Sent Times:

President Barack Obama Sent Thursday, December 13, 2012 @ 12:48 PM
Vice President Joe Biden Sent Thursday, December 13, 2012 @ 12:51 PM
The Honorable John Boehner, Speaker of the House Sent Thursday, December 13, 2012 @ 12:54 PM
The Honorable Eric Cantor, Majority Leader Sent Thursday, December 13, 2012 @ 01:11 PM
The Honorable Kevin McCarthy, Majority Whip (Unable to Contact)
The Honorable Nancy Pelosi, Minority Leader (Unable to Contact)
The Honorable Steny Hoyer, Minority Whip Sent Thursday, December 13, 2012 @ 12:56 PM
Senator Dan Inouye, President Pro Tempore Sent Thursday, December 13, 2012 @ 12:58 PM
Senator Harry Reid, Majority Leader Sent Thursday, December 13, 2012 @ 12:59 PM
Senator Mitch McConnell, Minority Leader Sent Thursday, December 13, 2012 @ 01:02 PM
Senator Sherrod Brown Sent Thursday, December 13, 2012 @ 01:04 PM
Senator Rob Portman Sent Thursday, December 13, 2012 @ 01:06 PM
Representative Steve Stivers Sent Thursday, December 13, 2012 @ 01:08 PM

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Author: jerryab Big gold star, 5000 posts 4 Year Anniversary! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1844791 of 1950572
Subject: Re: Fiscal Cliff & Debt Ceiling Date: 12/13/2012 5:46 PM
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Ok, thanks. I already sent message that to my Congresscritters and Obama because that is a perfect hammer to crack Boehner and the Tea Party.

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