The Fiscal Cliff

[PaloAltoCougar]

Last night I heard the Fed made 16.7 billion on their bailout of AIG.

I have heard they made money on the bank bailouts.

Even though the taxpayer has made money on these financial institutions, it is popular to blame them for the calamity and hate them. OK

Seems where we have lost money is GM and government grants to clean air projects. I don't know if we can draw any conclusions from this, but I am going to think on it.

Forget the profits, if the Feds hadn't bailed out AIG, the resulting defaults by several foreign governments would likely have caused us vast amounts of capital in defense costs.

[Uncle Ted]

How Much Taxation Would Fund Current Spending?

To best understand this spending aspect of the current budget negotiations in Washington, we must answer one crucial question: how much taxation on the top income-earners would be required to fully fund the present level of government spending?

[...]

what would a 100% income tax on all those who earn over $10 million amount to? I'm not taking about a wimpy marginal rate, where one might tax only those dollars of income over $10 million (leaving the taxpayer $10 million). No, I'm saying you find all those who made more than $10 million and take every last penny -- an absolute tax of 100%.
Using 2009 data, the IRS says that 8,274 tax returns were filed with incomes over $10 million. The total amount of income on those returns was $240.1 billion.

Our federal government alone is spending more than $10 billion a day. Thus, a 100% confiscation of all income of those making more than $10 million would amount to less than 24 days of federal spending.

[...]

Confiscating 100% of all income from those who made over $1M funds the federal government for 72 days.

[...]

Confiscating 100% of the income from those who made more than $200K funds the federal government for only about six months.

[...]

The bottom line is that we cannot fund our current levels of spending even if we make unrealistically charitable assumptions about taxpayer response to confiscatory tax rates and confiscate the entire annual income of every American who made more than $100K in 2009.

[ERCougar]

How Much Taxation Would Fund Current Spending?

Wow. Those are some crazy numbers.

I heard an idea on Left, Right, and Center this morning that I like. Just do nothing and extend the deadline six months. You obviously run the risk of perpetually extending the deadline and never doing anything about the debt, but I agree with the notion that it may not be a very good time to aggressively attack debt, given what's happened in Great Britain. So add to the extension some hard triggers, say 2% growth and 7.5% unemployment (my completely arbitrary numbers), that will force austerity (and some across-the-board tax hikes), and prevent any further deadline extension. In the meantime, rework the entire budget from ground up so we're prepared for when we can no longer extend the deadline.

[Omaha 680]

How Much Taxation Would Fund Current Spending?

I've said many times here that the tax the rich mantra as a solution is pure fantasy. Apart from destroying jobs and taking incentive away from job creators, the math doesn't work and never has. Taxing the rich is about punishing and making the less fortunate feel better by sticking it to the man. It is about some nebulous and subjective concept of "fairness". It has nothing to do with really solving problems. It is demagoguery at its worst.

[byu71]

Wow. Those are some crazy numbers.

I heard an idea on Left, Right, and Center this morning that I like. Just do nothing and extend the deadline six months. You obviously run the risk of perpetually extending the deadline and never doing anything about the debt, but I agree with the notion that it may not be a very good time to aggressively attack debt, given what's happened in Great Britain. So add to the extension some hard triggers, say 2% growth and 7.5% unemployment (my completely arbitrary numbers), that will force austerity (and some across-the-board tax hikes), and prevent any further deadline extension. In the meantime, rework the entire budget from ground up so we're prepared for when we can no longer extend the deadline.

I would be for that if there was a trigger that if they didn't come to some agreement, all of them would be fined two years pay.

They could even do something like resolve the tax issue the first two months and the republicans and democrats agree that if they don't come up with the spending side of the equation after the next two months, the republicans are not held to their agreement on taxes.

What I would hate to see is another one of these settle and pass legislation on the tax issue and the President and his cohorts promise to work on the spending thing later.

[frank ryan]

I would be for that if there was a trigger that if they didn't come to some agreement, all of them would be fined two years pay.

They could even do something like resolve the tax issue the first two months and the republicans and democrats agree that if they don't come up with the spending side of the equation after the next two months, the republicans are not held to their agreement on taxes.

What I would hate to see is another one of these settle and pass legislation on the tax issue and the President and his cohorts promise to work on the spending thing later.

I like your thinking but I'd go further. Send congress to prison camps if they can't find a solution.

[FMCoug]

How Much Taxation Would Fund Current Spending?

That is great. Question for the taxation gurus on the board. How much would tax revenue increase if there were no changes to the tax code but GDP went up by 1%, 2%, 5%, 10%, etc.

[Uncle Ted]

That is great. Question for the taxation gurus on the board. How much would tax revenue increase if there were no changes to the tax code but GDP went up by 1%, 2%, 5%, 10%, etc.

Not sure but GDP growth was only 1.77% for the first three quarters this year or less than half of what Obama said it would be. Do you see a trend?

[U-Ute]

How Much Taxation Would Fund Current Spending?

Play it the other way: What would you have to cut in order to fund current spending?

You would have to cut everything outside of SS, Medicare, and defense. Not just the discretionary funding, but every entire program.

[Uncle Ted]

GOP: We'll accept higher taxes if President Obama gives us his dog.

[byu71]

FINALLY. Boehner offers tax increases on millionaire's and billionaire's. Let's see now if Obama's campaign against millionaire's and billionaire's was just misleading rhetoric.

[RC Vikings]

FINALLY. Boehner offers tax increases on millionaire's and billionaire's. Let's see now if Obama's campaign against millionaire's and billionaire's was just misleading rhetoric.

Obama will just say it doesn't go far enough and knows most of the country agrees with him. The Republicans just need to bite the bullet and go down to the $250,000 and then demand Obama give the cuts they are asking for.

[Uncle Ted]

Gérard Depardieu says he will give up French passport over tax rises

Actor attacks French government for punishing talent as he moves to Belgium

Gérard Depardieu has said he is handing back his French passport and social security card, lambasting the French government for punishing "success, creation, talent" in his homeland.

A popular and colourful figure in France, the 63-year-old actor is the latest wealthy Frenchman to seek shelter outside his native country by buying a house just over the border in Belgium in response to tax increases by the Socialist president, François Hollande.

The prime minister, Jean-Marc Ayrault, described Depardieu's behaviour as pathetic and unpatriotic at a time when the French are being asked to pay higher taxes to reduce a bloated national debt.

"Pathetic, you said pathetic? How pathetic is that?" Depardieu said in a letter to the weekly newspaper le Journal du Dimanche.

"I am leaving because you believe that success, creation, talent, anything different must be sanctioned," he said.

An angry member of parliament has proposed that France adopt a US-inspired law that would force Depardieu or anyone trying to escape full tax dues to forgo their nationality.

The Cyrano de Bergerac star recently bought a house in Nechin, a Belgian village a short walk from the border with France where 27% of residents are French nationals, and put his sumptuous Parisian home up for sale.

Depardieu has also inquired about procedures for acquiring Belgian residency.

He said he had paid €145m (£120m) in taxes since beginning work as a printer at the age of 14.

"People more illustrious than me have gone into [tax] exile. Of all those that have left none have been insulted as I have."

The actor's move comes three months after Bernard Arnault, chief executive of the luxury goods giant LVMH and France's richest man, caused uproar by seeking to establish residency in Belgium – a move he said was not for tax reasons.

Belgian residents do not pay wealth tax, which in France is now levied on those with assets over €1.3m. Nor do they pay capital gains tax on share sales.

"We no longer have the same homeland," Depardieu said. "I no longer have any reason to stay here. I will continue to love the French and this public that I have shared so much emotion with."

Hollande is pressing ahead too with plans to impose a 75% supertax on income over €1m.

"Who are you to judge me, I ask you Mr Ayrault, prime minister of Mr Hollande? Despite my excesses, my appetite and my love of life, I remain a free man," Depardieu wrote.

I don't understand. France is such a wonderful country. Why would anyone want to leave it?

[snowcat]

France is such a wonderful country. Why would anyone want to leave it?

Probably to get away from the French.

[byu71]

Obama rejected Boehner's plan.

I saw a poll last night that basically said the public would blame both parties equally for going over the cliff.

OK if that is the way Obama wants to play, let's go over the cliff. The country will be better off in the long run.

What's wrong with having everyone have skin in the game and cutting spending dramatically. Maybe we will be forced to quit playing world cop.