American Politics during the Obama Presidency

[QUOTE=WorldTravel69; 419300]I hope all mongers, are not thinking this thread is a Independent News Thread.

This is a Republican Business Man Thread.

They are not for the Workers, they are for taking away your Dreams of a House, Home, and a Living wage, Away.

Democrats are not much better, but they are the only Working Man's Hopes.[/QUOTE]The operative word here is 'Republican'. Businessmen are not the problem per se.

What we've learned in this thread I think is that Republican businessmen think very highly of themselves and their business achievements. Moreover, they also think the government's top priority should be business success and profitability.

What they repeatedly ignore is that the government's role goes beyond creating conditions to help business. The role of government is to serve all people through the programs and services it provides. And this is a reflection of the will of the people.

If the government tries to do something that may benefit many people, but may have some downside for a particular business or industry, it is the Republican businessman who will complain first and loudest.

[QUOTE=Punter 127;419340]Austrian business cycle theory is that artificial credit expansion through central bank policies ultimately results in unsustainable booms, leading to asset price bubbles, which leads to recessions. Theoretically, this is the most precise explanation of the Great Recession.[/QUOTE]I give you credit for bringing up a worthy angle in the discussion, on credit expansion and interest rates. I've heard the argument before that Greenspan kept interest rates too low too long, which drove investment seeking higher returns elsewhere. Is that your argument as the main cause of the housing bubble?

[QUOTE]Would you like to tell us what percentage of Americans now pay zero income tax? Who was that guy that said [i]'Spread the Wealth Around'[/i]?[/QUOTE]Sure it's a big number, due to Republican low-tax philosophy, and the effect of capitalism shifting wealth from bottom and middle to the top. From an economic perspective, the single most important thing we can do now is to shift that wealth back from the top down, in a manner which still encourages and rewards individual effort.

[quote= Punter 127]Austrian business cycle theory is that artificial credit expansion through central bank policies ultimately results in unsustainable booms, leading to asset price bubbles, which leads to recessions. Theoretically, this is the most precise explanation of the Great Recession.

[QUOTE=Esten;419354]I give you credit for bringing up a worthy angle in the discussion, on credit expansion and interest rates. I've heard the argument before that Greenspan kept interest rates too low too long, which drove investment seeking higher returns elsewhere. Is that your argument as the main cause of the housing bubble?[/quote][/quote]Esten I'm not an economist but here are some 'Recession Facts and Explanations', I didn't write it but I think it has merit.

[quote]A chain of events led to the economic recession of 2007 – 2010. After the bursting of the NASDAQ Bubble or the Dot Com Bubble in 2000 (where bubble refers to temporary and unnatural price hikes) the Federal Reserve System started lowering the Federal funds rate to historic levels (up to around 1%) and eased credit conditions, where the federal funds rate is the interest rate at which private depository institutions (mostly banks) lend balances (federal funds) at the Federal Reserve to other depository institutions, usually overnight.

This expanded the money supply to such an extent that financial institutions started offering loans to buyers with low credit scores, where a credit score represents the creditworthiness of a person. These borrowers are called 'subprime borrowers'. Government Sponsored Agencies such as the Federal National Mortgage Association (commonly known as Fannie Mae) , Federal Home Loan Mortgage Corporation (Freddie Mac) etc. Channeled a large number of these credit flows into the real estate market to expand the secondary market for mortgages through mortgage backed securities. Due to lower federal funds rates, the adjustable rate mortgages charged lower interest rates, and since asset prices are inversely related to interest rates, this credit flow led to increases in housing prices.

After the initial success of offering subprime mortgages, the practice expanded dramatically and the terms on which borrowers were given loans started becoming more creative and risky. Now, financial institutions consider the current value of the borrowers' property to find out whether a person is eligible for mortgage refinancing or not. For this reason, since housing prices were rising, many of these subprime borrowers took loans they could not afford in the anticipation that they would be able to refinance at more favorable rates once the prices of their houses increased. Easy credit also resulted in excessive investment on housing as well, as a result of which demand for housing started rising and more and more houses were being built.

By late 2004, the Federal Reserve System thought that the US economy was growing fast enough and started raising the federal funds rate up to 5. 25% in January of 2007. As an immediate result of this, it became much more expensive to borrow money, so less people could afford to buy a house. This caused a fall in the demand for housing and house prices, which had been increasing rapidly in the previous years, began falling moderately. For this reason, subprime borrowers could not refinance their loans, which caused many of these borrowers to default and their houses were foreclosed on. The values of the 'Mortgage-backed securities' in USA declined sharply as a result of those defaults. These events led to a decline in mortgage cash flows for the banks, banks started facing losses, capital levels of the banks depleted and banks started failing. This created the 'Liquidity crunch' or Credit crunch' in USA, which slowed down business activities, decreased the values of stocks of the banks and businesses and created massive unemployment. Through the financial markets, this crisis spread throughout the world.[/QUOTE]It really doesn't matter what caused the recession, what's important is the fact that Obama said he could cure what ailed us and he has failed miserably.

[quote][quote=punter 127]Would you like to tell us what percentage of Americans now pay zero income tax? Who was that guy that said 'Spread the Wealth Around'?[/quote][QUOTE=Esten;419354]Sure it's a big number, due to Republican low-tax philosophy, and the effect of capitalism shifting wealth from bottom and middle to the top. From an economic perspective, the single most important thing we can do now is to shift that wealth back from the top down, in a manner which still encourages and rewards individual effort.[/quote][/QUOTE]We've all heard your jiberish before but no intelligent person believes such tommyrot, it's utter foolishness, and complete nonsense.

Look I'm sure you think your theory is very Robin-Hoodnistic but you need to remember Robin Hood was a thief.

Esten, we all wait with bated breath for your latest missive on Obama's 'Buffett Rule'.

Since the IRS just blew Obama and company out of the water with the actual rates the approximate 320, 000 Americans making $1 million or more pay an effective rate of 27% while the average middle class family pays an effective rate of 15.

What a shock that must have been for Obama to be stabbed in the back by one of his own agencies, not only does this small segment of Americans pay the bulk of the taxes, not only do 47% of Americans pay no income taxes at all, these evil rich are paying an effective rate 80% higher than the average middle class American.

I just can't wait to see you try to turn this one around as Obama purportedly tries to save the middle class from the evil rich with an outright lie.

By the way, Warren Buffett's Berkshire Hathaway acknowledges it owes back taxes from 2002 to 2004 and 2005 to 2009 totaling nearly $1 Billion dollars. I would think Mr. Buffett would get his personal and professional house in order before he starts preaching to the rest of us about tax matters.

Punter,

I read the piece you quoted. I think there is wide agreement that there were multiple reasons for the housing bubble. I have no problem believing interest rates and easy credit were among them.

But you just haven't made a convincing case that these factors, or that "Keynesian Economists", are mainly responsible for our current situation. The Stimulus is what is commonly referred to these days when talking about Keynesian theory, and that has actually been a big part of how we stabilized the economy and avoided a Depression. You claim the Stimulus buried us in debt, which is untrue since Stimulus spending is a very small piece of current debt.

It appears you expand the definition of Keynesian theory to include efforts to stimulate the economy through interest rates. Fine. But the argument you present makes it sound like the bubble was almost entirely policy driven, with interest rates in effect the first domino setting in motion all the other dominos. What a convenient scapegoat! I am sure some of the best and brightest minds on Wall Street have spent many hours refining this explanation, to divert attention away from the central role that reckless Wall Street behavior played.

The role of Wall Street and other private sector (real estate) players is glaringly absent in your argument. Your article states "... asset prices are inversely related to interest rates...". So with record-low rates now, how come we don't have another housing bubble forming now? Oh wait, it's a different asset now. Maybe gold. This proves there is nothing automatic about low interest rates fueling housing bubbles. Investors will put their money where they see the best, or safest, opportunities depending on their risk appetite. Wall Street created what was marketed as a safe and attractive investment in MBSs, sold not just to GSEs but also global investors with huge pools of cash seeking good returns. I see no evidence that investors would not have purchased them if rates had been a few points higher. The entire trail from mortgage origination to securitization was well-greased to enrich private sector players at every step. To keep the money flowing, more and more mortgages needed to be fed in, like fueling a train with coal. This encouraged even lower payment ARMs and laxer underwriting. And then there was speculation. Even the Austrian theory proponents agree that speculation played a huge role, and this is evidenced by the corresponding bubble in commercial real estate. Not to mention the "get rich through real estate" mentality that people like Donald Trump peddled while the bubble was growing.

In short, the private sector was the protagonist in the housing / financial bubble. Greed, fraud, and poor risk management were key elements. Charles Munger, vice chairman of Berkshire Hathaway and a Republican, described it colorfully: "The bubble in America was caused by some combination of megalomania, insanity and evil in, I would say, investment banking, mortgage banking." To ignore these factors and blame it all on 'Keynesian Economists' is absurd.

Face it, our current situation is largely a result of reckless free-market capitalism.

Still nothing to say Esten? Your silence is deafening!

Strange you only wish to argue abstract theory regarding the housing bubble and economic theory rather than address issues you have raised.

Regarding the housing bubble, it is pretty obvious the root cause was the Democrats attempt to expand home ownership by using lower credit thresholds at Freddy and Fanny which led to the conditions allowing the market to take advantage of the situation with mortgage backed securities. All the items you list regarding greed are true to a certain extent but you ignore the fact the SEC was asleep at the switch, failing to enforce the statues in place to prevent these excesses from occurring. Instead the SEC was watching porn.

As far as Obama's 'Buffett Rule', he is still beating the class warfare drum in the face of hard evidence provided by the IRS directly contradicting his statements.

I can only assume Obama attended the Paul Joseph Goebbels' school of public communication.

Goebbels' quote:

[quote]If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and / or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.[/quote]

Our President is now out stumping on the theme that his soak-the-rich tax proposal "isn't class warfare. It's math."

This has to be one of the most absurd statements to come out of his mouth. If it truly is "math" then we should all be very afraid. He's relying on a lie, told by Warren Buffett, that his secretary paid a higher rate of tax than Buffett. That's pure drivel and has been exposed as such repeatedly this week. The truth is starting to come out that the so-called rich pay far, far more than the middle class in taxes, measured by dollars or rates. Obama knows this but couldn't pass up on the opportunity for a sound bite. Unfortunately for him, this one bit him in the arse. When he talks about "shared sacrifice" someone needs to ask: How much more are those paying zero being asked to contribute?

In his recent NY Times article, Buffett didn't actually say that he paid a lower rate of tax than his secretary. I think that's because he knows that's a lie and got away with saying it several years ago. Instead, he said he paid a lower rate of tax than any of the other 20 people in his office, which may or may not include his secretary. He also made a bunch of wild claims that they all pay between 33 and 41 percent.

Back in 2007 when he was campaigning for Hillary Clinton, Buffett [b]did[/b] _ say that he paid a higher tax rate than his secretary. Here was his claim back then:

[i]Mr Buffett said that he was taxed at 17. 7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60, 000, was taxed at 30 per cent. [/i]

[url]http://www.timesonline.co.uk/tol/money/tax/article1996735.ece[/url]

Buffett, of course, is lying. The top tax bracket for someone earning $60, 000 is 25 percent, and that only applies to income over $35, 000. Income below that is taxed at a much lower rate. Plus, Buffett expects us to believe that his secretary: (a) had no deductions; (be) had no exemptions; (see) did not contribute to a 401k, etc, etc. No retirement plan contribution by Buffett's secretary? That's a laugh. Plus, there is no top tax bracket that would push anyone into a 41% rate, as Buffett recently claimed. He'll argue that he was bundling up a whole bunch of taxes, medicare, social security, SDI and state taxes. I still think he's lying on that. But, of course, then he's comparing apples (his own federal income tax rate) to oranges (the sum of all taxes paid by others) to arrive at a misleading proposition.

There are a whole variety of reasons why someone like Warren Buffett would tell these lies. But, the more interesting phenomenon is, why hasn't a single member of the left wing media bothered to investigate this obvious fabrication? Now that Obama has turned this into a campaign theme, and simultaneously demonstrated that he doesn't understand taxes or math, will the left wing media investigate? Remember how they called for Trump to release his tax returns after he challenged Obama's birth certificate? Why don't these same folks ask for the equivalent from Buffett and his secretary, especially since Buffett (unlike Trump) put his own taxes directly at issue?

Unfortunately, these are the sorts of things that happen every day in the United States. It's the primary reason why Fox News is such a huge success. People got tired of being lied to by left wing acolytes, who took them for granted. Fox may not be any better in the Truth Department, but if you're going to watch the news, you may as well get your slant from someone who shares your perspective.

[QUOTE=Esten; 419370]But you just haven't made a convincing case that these factors, or that "Keynesian Economists", are mainly responsible for our current situation. The Stimulus is what is commonly referred to these days when talking about Keynesian theory, and that has actually been a big part of how we stabilized the economy and avoided a Depression. You claim the Stimulus buried us in debt, which is untrue since Stimulus spending is a very small piece of current debt.

It appears you expand the definition of Keynesian theory to include efforts to stimulate the economy through interest rates. Fine. But the argument you present makes it sound like the bubble was almost entirely policy driven, with interest rates in effect the first domino setting in motion all the other dominos. What a convenient scapegoat! I am sure some of the best and brightest minds on Wall Street have spent many hours refining this explanation, to divert attention away from the central role that reckless Wall Street behavior played.[/QUOTE]It's not my place to convince you of anything, I present my opinion and you can take it or leave it. But I will point out a few things and then move on. The USA Was already in a hole and all the excess spending has buried us. The USA Economy is fucked and it will take drastic changes to dig our way out of this [strike]hole[/strike] grave.

I'm not expanding the definition of 'Keynesian theory', monetary policy (including interest rate) and the use of stimulus is very much Keynesian economics. Perhaps you should research Keynesian economics a bit.

[url]http://en.wikipedia.org/wiki/Keynesian_economics[/url]

[b]All your finger pointing is just a smoke screen to direct us away from the fact that Obama promised he could cure what ailed us and he has failed miserably.[/b]

[i]Obama: 'The Economy's Gotten Better Than It Was When I First Took Office'[/i]

[url]http://www.theblaze.com/stories/obama-the-economys-gotten-better-than-it-was-when-i-first-took-office-really/[/url]

Lets take a look at that claim and the economy over the last two-and-a-half years.

The president advocated a $787 billion stimulus bill that would keep unemployment below 8 percent. Since then, our economy has lost more than 1.3 million jobs and the unemployment rate has averaged over 9 percent.

[url]http://www.upi.com/Top_News/US/2011/08/13/GOP-Obama-made-weak-economy-worse/UPI-79031313237917/[/url]

In March, the average price for a gallon of gas doubled Since President Obama took office. It Averaged $1.79 then. It averages $3.59 today.

[url]http://www.washingtontimes.com/blog/watercooler/2011/mar/30/gas-prices-double-under-obama/[/url]

The national debt totaled about $10.7 trillion in December 2008. Today the national debt stands at almost $14.6 trillion.
[url]http://nationaldebtbusters.blogspot.com/2009/01/newest-national-debt-statistics-posted.html[/url]

[url]http://www.brillig.com/debt_clock/[/url]

Standard & Poor's downgraded the USA credit-rating for the first time in history.

[url]http://www.theblaze.com/stories/standard-poors-downgrades-u-s-credit-rating-for-first-time-in-history/[/url]

And those are just a few stats,' for you to spin.

I was getting around to you Doppel.

I appreciate you took the time to try to explain more how Obama is hurting your business. I am open to listening to legitimate arguments.

[QUOTE=Doppelganger; 419341]For single and multi-specialty medical group clients:

The problem is folks don't have the money for co-pays and deductibles or want to hold on to the cash and seek only that care which is urgent reducing my client's gross receipts while expenses continue to rise causing layoffs of physicians and support staff which means they have less money to pay my firm as well for our services. Don't give me ObamaCare will turn medicine around, my clients see it for the unmitigated disaster it will be and they are the ones delivering the services.

Commercial construction clients:

No new significant construction projects are being initiated by their clients and those that were slated for starts in 2009, 2010 and this year have been shelved unless they were already out of the ground. Their clients are holding on to their money and waiting to see what happens within their individual business sectors, ie uncertainty. My clients are getting by doing what smaller jobs are available and again we are looking at cut backs which include my firm's services.

General business clients:

Same problem here, folks are not spending so their receipts are down with the same results as the other two groups of clients.

Conclusion:

My company is tied to the fiscal health of my clients and they are a pretty gloomy bunch. Their income has declined each year since 2008 and none of us see any hope of it becoming better any time soon.[/QUOTE]Unfortunately, you let me down. I was hoping you'd have some specific example of how Obama is hurting your business, like a tax or regulation which was clearly, demonstrably affecting your business.

But all you got is the 'general malaise' argument. That things aren't better, people don't have money, or aren't spending, and it's Obama's fault.

That's the type of 'shallow analysis' I was talking about. Yes, Obama did inherit the worst economic downturn in decades, and things WOULD likely have been even worse without the steps that have been taken. You can stay in your pretend-world where you believe things would have magically been much better with a Republican president, but I prefer to look a little deeper than that.

I suspect that despite the facade, you recognize that free market capitalism itself is at the root of much of your clients situation and behavior. Giant real estate bubbles (commerical and residential) and mass layoffs, all contribute to the factors you described. I understand it's hitting your wallet, but that's no excuse for a superficial analysis.

Face it, you're just another casualty of boom-and-bust capitalism. Looking for an easy scapegoat that doesn't conflict with your ideology.

BTW, if nothing Obama has done has improved the economy, how do you explain the chart below. I shall await your answer.

[url]http://thinkprogress.org/economy/2011/09/09/315347/gop-second-stimulus/[/url]

[QUOTE=Stan the Man; 419377]Our President is now out stumping on the theme that his soak-the-rich tax proposal "isn't class warfare. It's math."

This has to be one of the most absurd statements to come out of his mouth. If it truly is "math" then we should all be very afraid. He's relying on a lie, told by Warren Buffett, that his secretary paid a higher rate of tax than Buffett. That's pure drivel and has been exposed as such repeatedly this week. The truth is starting to come out that the so-called rich pay far, far more than the middle class in taxes, measured by dollars or rates. Obama knows this but couldn't pass up on the opportunity for a sound bite. Unfortunately for him, this one bit him in the arse. When he talks about "shared sacrifice" someone needs to ask: How much more are those paying zero being asked to contribute?

In his recent NY Times article, Buffett didn't actually say that he paid a lower rate of tax than his secretary. I think that's because he knows that's a lie and got away with saying it several years ago. Instead, he said he paid a lower rate of tax than any of the other 20 people in his office, which may or may not include his secretary. He also made a bunch of wild claims that they all pay between 33 and 41 percent.[/QUOTE]This is too funny! LOL

Ranting and accusing Obama and Buffett of lying. I guess this guy just doesn't understand effective tax rates and how investment income is taxed.

Esten you make this too easy. What a liberal rag of a web site. Your cited chart is titled "Job Changes" and uses the same slippery terminology as Obama with the touchy feely "created or supported" jobs. That's right up there with "equivalent jobs".


By looking at your little graph I am at a loss to understand how we could be still be at 9. 1% unemployment since you graph shows "Job Changes" above that prior to the recession in 2007 and 2008. Well what can I expect from you but the same old tired liberal trash with cooked numbers.


By the way just in case you missed it, the top tax rate is 35% on TAXABLE income, that is line 32 income which is after all deductions and adjustment and it's been 35% for several years. How in the world Obama and Buffett came up with his employee paying, depending on which version of the story you hear. 36% up to 41% in federal income tax is beyond me but as you can see below is a bald face lie. Here are the actual rates from the IRS, now remember these are TAXABLE income.


2011 IRS Tax Brackets.

2011 IRS Tax Brackets
Here are the 2011 tax tables, which make it easy to find which marginal tax bracket you are in:
Tax Bracket Single Married Filing Jointly Head of Household
10% Bracket $0 – $8,500 $0 – $17,000 $0 – $12,150
15% Bracket $8,500 – $34,500 $17,000 – $69,000 $12,150 – $46,250
25% Bracket $34,500 – $83,600 $69,000 – $139,350 $46,250 – $119,400
28% Bracket $83,600 – $174,400 $139,350 – $212,300 $119,400 – $193,350
33% Bracket $174,400 – $379,150 $212,300 – $379,150 $193,350 – $379,150
35% Bracket $379,150+ $379,150+ $379,150+

Esten, guess you did not read the diesel post or just have a problem with the facts. That one post on just one item which has caused expenses to rise explains why my clients, especially in construction are having problems.

Still waiting on you 'Buffett Rule' missive. Probably going to wet my pants LMAO on that one.

Esten the one who does not understand the tax laws is you. Go to www.irs.gov and do a little reading so you don't continue to screw it up.

Federal income tax is progressive, meaning higher incomes are taxed at higher rates. But there is an important exception. The tax rate on certain types of investment income such as long term capital gains and dividends is capped at 15%.

The greater the share of your taxable income comprised of such investment income, the closer your overall, net tax rate will be to 15%. This is called the effective tax rate --- total tax / total taxable income. Many wealthy people derive a large share of their total income from such investments, which significantly lowers their effective tax rate.

The Buffett Rule would ensure the effective tax rate of filers with 1-million+ taxable incomes would not be lower than that paid by middle-class filers, which can be up to 28% or higher depending on how you define middle class.

PolitiFact gives Buffett's claim a 100% True rating
Warren Buffett says the super-rich pay lower tax rates than others.
[url]http://www.politifact.com/truth-o-meter/statements/2011/aug/18/warren-buffett/warren-buffett-says-super-rich-pay-lower-taxes-oth/[/url]

Esten, wrong again!

I guess you didn't read the Internal Revenue Service's release of the ACTUAL tax rates paid by households making $1 million per year or more.

There are only 320, 000 households in this group.

The average "middle class" households paid an effective rate of 15%

The households making $1 million and greater paid an effective rate of 29%

I'm not even going to try to explain "effective rate" to you since you already know what it is but continue to ignore the FACTS for political expediency.

PolitiFact = PolitiCrap and so does your argument. Buffett and Obama's argument is a lie start to finish.

The number of households deriving their entire income from long term gains at the 15% tax level, which is the group we are talking about here, is so small as to be irrelevant when discussing tax policy. If I recall the number correctly it is one one hundredeth of a percent of the population. Just another attempt to raise the capital gains tax.

Hope you looked at who else will be affected by the 'Buffett Rule'. Like everything else coming out of Obama's mouth it's smoke, mirrors and half truths.

Obama's 'Buffett Rule' is a lie, he knows it, you know it and so do most folks with a wit of intelligence. I look for him to make some 'adjustment' to his pitch shortly as his new class warfare pitch fails to get traction.

There has been some excellent pushback exposing Obama's and Buffett's lies about taxes. This is one of the better ones, in my opinion:

[i]President Obama is right. It is time for 'fairness. ' It is time to ask some Americans to do more, contribute more, sacrifice more. But like most things Mr. Obama does, he has singled out the wrong group. The rich and business owners already pay far too much in taxes. They already sacrifice too much. They already share their wealth too much. The top 1 percent of income earners (almost all of whom are small-business owners) already pay 40 percent of the personal income taxes in America, more than the bottom 95 percent combined.

The top 20 percent of income earners pay almost 100 percent of the income taxes in this country. That means 80 percent of the population pays almost no income taxes and a full 50 percent pay zero income tax.

Mr. Obama said, 'Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. ' The problem with that statement is that it's a lie. Let's get the facts straight. The typical household with more than $1 million in income will pay an average of 29. 1 percent in federal taxes this year. The typical household making between $50, 000 and $75, 000 will pay 15 percent in taxes. Lower-income households (below $50, 000) will pay an average of 12. 5 percent in federal taxes (most in the form of Social Security taxes). In dollar terms, that means the typical millionaire will pay $290, 000 in taxes and the typical middle-class family earning $50, 000 will pay $7, 500. But most importantly, almost all of that $7, 500 is Social Security taxes, which theoretically they will get back after they retire.

Why doesn't Mr. Obama quote the actual numbers and ask Americans if this sounds fair? One American pays $290, 000 in taxes. The other pays $7, 500. Mr. Obama calls this 'unfair. ' As you can see, he's right. It's definitely unfair. Unfair to the 20 percent of the citizens who pay virtually 100 percent of the cost of government benefits, which are enjoyed for free by the other 80 percent of the population. [/i]

Full article here:

[url]http://www.washingtontimes.com/news/2011/sep/21/obama-is-right/[/url]

The author also makes a good point. The majority of middle class taxes at 15% or less are made up of the social security and medicare portions. According to those who don't believe that social security is a ponzi scheme, these taxes are being set aside for these taxpayers when they retire or need medicare. It's like counting 401k or IRA contributions as a "tax." Again, the premise is that you don't believe social security is a ponzi scheme, and that all the money [i]you[/i] Put aside today will be there when you retire.

The final point here is one that is simmering just beneath the surface. The truth is that social security [b]is[/b] A ponzi scheme. It relies on "fresh" money coming in to pay benefits promised to those who already contributed, and the promised benefits exceed what was contributed. Not through investment gains. But what are the Left's latest proposals to fix this mess they've created? To means-test social security so that the rich wouldn't be able to get [u]anything back. [/u]

Sadly, this and other fixes will absolutely be necessary to even start fixing this poorly designed social program. But, then, what's the upshot? The "millionaires and billionaires" will pay a much higher tax rate, much, much higher absolute tax dollars, and will pay the full bore of their social security contribution which literally will become just another tax on them since they will never see any benefit. In other words, the same guy in the example above, who paid $290, 000 in taxes, can flush the $7, 000 or so allocated to social security down the drain. To him, it's other people's money. He'll see no benefit. Meanwhile, the middle class taxpayer whose $7, 500 in tax was made up of about $4, 000 in social security, will see $7, 500 in benefit from that program. He'll necessarily get more benefits than he paid in. That's the whole reason to do means-testing.

Where is the fairness in this?

Esten's response will be simple.

They can pay more so they should pay more. Fairness is a sham arguement, Obama's Trojan Horse.