- Feb 12, 2000
- 10,652
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The following is a copy and paste from an investment dsicussion board that I frequent. This is from one of the founders of the board. I think it is a very enlightening post. I have tried to remove all names of the other board.
This post was in response to someone calling Bush an idiot after his last speech for saying that the the US Treasuries in Social Security were practically worthless.
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I am not going to defend President Bush because he surely has failed to perform as I had hoped he would, But he is not an idiot either. What he said is true concerning the government's future bankruptcy. It is 100% guaranteed unless something changes. The question is, what will we change?
The problem we have today is that one party fights every change that will fix the problem in a way that makes sense. They have a vested interest in protecting the status quo which is exactly the thing that has created the potential for default. Raising taxes helps the problem in the short-run but kills the golden goose in the long-run. The golden goose is American business. That was exactly the point I was making in my earlier post on this subject.
If the spending on entitlements and discretionary keep going at the rates that have been established by our government through their over-zealous promises, we are doomed. Period!
The rich have to bail us out. The key is in the Capital Gains Tax and it is what created a surplus in 1999 and 2000 and it is reducing the present deficit as we speak. President Clinton begrudgingly signed the law that reduced the Cap Gain rate to 20% and the cash rolled in as expected.
Faced with a recession in 2001 and 2002, President Bush further reduced the rate to 15% and the cash is flowing again. The rich will pay their taxes if the rates are rational. If the governement raises their tax rate, they reduce their spending, stop selling equitiues and the revenues to Washington dry up. Meanwhile, the working stiffs of America still get up, go to work, and pay their taxes. But, that will not pay the government's bills.
The truth is, the lower 45% of taxpayers pay essentially no income taxes. Their entitlement taxes are merely recycled to someone else. The rich pay almost no S/S tax because they have little to no earned income. Meanwhile, the wealthiest 10% of us pay over 35% of all taxes. The top 50% pay close to 95% of the taxes. Thus, we have a stalemate in Congress. Half of the public want to tax the rich and vote for that idea while the other half pay all of the taxes. We have become experts at robbing Peter to pay Paul, but that has to change because Peter is in control. He is rich and he can decide to either pay his taxes or not. Peter is tax exempt...except for capital gains. That is the key to our future and it is why I continue to encourage all of us to gladly share our wealth by paying our Capital Gains Taxes. I think that a 15% tax rate is fair and I will pay it. I think more money could be generated if the rate was a little lower.
(At our last meeting), my argument went like this, "There is no middle class in America...we have just two classes. We have our rich and we have our poor and the dividing line is easy to spot. If you pay income taxes, you are rich and if you do not, you are poor...or you are a very smart rich person."
The data is irrefutable. We must operate our government to please business. We must raise the disposable income of the poor while keeping the wealth in the hands of the rich. As business grows over time, jobs will be produced, unemployment will remain low, interest rates will be low, inflation will be controlled, the rich will remain rich and the poor can improve their position in life and start paying taxes...which puts them among the rich. The government will receive growing revenues from business profits taxes and capital gains taxes.
What has actually happened since 2001 when President Bush came to office, is the trends have already been established. We have already turned the corner and the percent of revenues from earned income are going down, the percent paid from social security are going down and the capital gains and corporate tax payments are soaring at double digit rates.
So, you are free to call Bush an idiot, but I can prove beyond any doubt that he is not. He has managed the government in ways that are not visible to the average person. The worst thing that we can do today is to change the course that he has set concerning the economy. I just pray the Democrats can see what I see. It is obvious that the mainstream media is blind to it.
=================
This post was in response to someone calling Bush an idiot after his last speech for saying that the the US Treasuries in Social Security were practically worthless.
==========
I am not going to defend President Bush because he surely has failed to perform as I had hoped he would, But he is not an idiot either. What he said is true concerning the government's future bankruptcy. It is 100% guaranteed unless something changes. The question is, what will we change?
The problem we have today is that one party fights every change that will fix the problem in a way that makes sense. They have a vested interest in protecting the status quo which is exactly the thing that has created the potential for default. Raising taxes helps the problem in the short-run but kills the golden goose in the long-run. The golden goose is American business. That was exactly the point I was making in my earlier post on this subject.
If the spending on entitlements and discretionary keep going at the rates that have been established by our government through their over-zealous promises, we are doomed. Period!
The rich have to bail us out. The key is in the Capital Gains Tax and it is what created a surplus in 1999 and 2000 and it is reducing the present deficit as we speak. President Clinton begrudgingly signed the law that reduced the Cap Gain rate to 20% and the cash rolled in as expected.
Faced with a recession in 2001 and 2002, President Bush further reduced the rate to 15% and the cash is flowing again. The rich will pay their taxes if the rates are rational. If the governement raises their tax rate, they reduce their spending, stop selling equitiues and the revenues to Washington dry up. Meanwhile, the working stiffs of America still get up, go to work, and pay their taxes. But, that will not pay the government's bills.
The truth is, the lower 45% of taxpayers pay essentially no income taxes. Their entitlement taxes are merely recycled to someone else. The rich pay almost no S/S tax because they have little to no earned income. Meanwhile, the wealthiest 10% of us pay over 35% of all taxes. The top 50% pay close to 95% of the taxes. Thus, we have a stalemate in Congress. Half of the public want to tax the rich and vote for that idea while the other half pay all of the taxes. We have become experts at robbing Peter to pay Paul, but that has to change because Peter is in control. He is rich and he can decide to either pay his taxes or not. Peter is tax exempt...except for capital gains. That is the key to our future and it is why I continue to encourage all of us to gladly share our wealth by paying our Capital Gains Taxes. I think that a 15% tax rate is fair and I will pay it. I think more money could be generated if the rate was a little lower.
(At our last meeting), my argument went like this, "There is no middle class in America...we have just two classes. We have our rich and we have our poor and the dividing line is easy to spot. If you pay income taxes, you are rich and if you do not, you are poor...or you are a very smart rich person."
The data is irrefutable. We must operate our government to please business. We must raise the disposable income of the poor while keeping the wealth in the hands of the rich. As business grows over time, jobs will be produced, unemployment will remain low, interest rates will be low, inflation will be controlled, the rich will remain rich and the poor can improve their position in life and start paying taxes...which puts them among the rich. The government will receive growing revenues from business profits taxes and capital gains taxes.
What has actually happened since 2001 when President Bush came to office, is the trends have already been established. We have already turned the corner and the percent of revenues from earned income are going down, the percent paid from social security are going down and the capital gains and corporate tax payments are soaring at double digit rates.
So, you are free to call Bush an idiot, but I can prove beyond any doubt that he is not. He has managed the government in ways that are not visible to the average person. The worst thing that we can do today is to change the course that he has set concerning the economy. I just pray the Democrats can see what I see. It is obvious that the mainstream media is blind to it.
=================
