The Housing Bubble

More outhouses less jacuzzi’s

I call for a fiscal cliff… If we are 40% over budget.. cut 40% across the board… If dedicated funding program (SS ) is currently self sufficient, leave it alone in round 1. If not, immediate cut in paid out benefits across the board.

You make it sound so simple.

How do you cut 40% across the board? Lets look at Medicaid. Do you require states to cut reimbursements to doctors by 40%? Pay for 40% fewer procedures/visits? Just tell people that if they get an expensive cancer they are on their own?

What about the EPA? Are they supposed to enforce the same rules with 40% few people? Are you going to change the rules so 40% fewer people can still enforce them? What rules will you change? Maybe you want to just get rid of all rules related to air polution and only worry about keeping the water clean?

Guaranteed loans of all kinds? Make them smaller? Make fewer people eligible? Just try to keep doing the same thing with fewer people?

Scientific reasearch? Which kinds of basic reseach do you want to defund?

Nukes. Presumably we still need to babysit our nukes. Can’t really cut that, can you? Maybe we should have a yard sale on some of those. I bet Pakistan and Iran would be interested.

Veterans benefits. How do you want to cut 40% from veteran’s benefits? Stop providing them with medical care? No money if you don’t have a disability rating of at least 60%?

Military. The pay is still a little low. So I guess most of this is going to come out of new planes and ships and weapons systems. Actually, that might be fun to watch. The vanity ads from the defense contractors on the Metro would explode.

I guess you don’t care if it takes a year to get a passport renewed or if we eliminate a bunch of embassies. Let the diplomats use skype for pete’s sake.

Come on, mathguy. You are a numbers person, no? Lets see your real numbers.

“Scientific reasearch? Which kinds of basic reseach do you want to defund?”

Mathematical research?

What is the expected payoff on that, given that many new ideas in mathematics don’t translate into applications until their discoverer is six feet under?

You’re right.. I don’t care if it takes a year to get a passport renewed. Yes, cut reimbursement 40% to hospitals for medicaid. What is the budget for the EPA? What are we getting for that 40%? Cut it 60%….

Nukes.. hmm, yeah, I think the military will just roll them out onto the city streets if we cut budgets by 40%.. No way they could figure out how to do it without just setting one or two off over Chicago I’m sure.

Scientific research? Cut that 90%. Keep 10% so we can mothball our current facilities.

Don’t be a dumb ass. The world will not end with some cuts in gov’t funding.

By the way, 40bln a month in bond purchases.. Cut that 100% … Any new purchases of mortgage debt by Fannie Feddie… cut 100%… 0% discount window to banks? turn off the spigot.

Now I’m not unreasonable.. I think we can phase these cuts in over the next 2 years. In addition I propose a 1% tax on all stock or (non-municipal) bond transactions. So you can have the tax increase on the rich you want as well.

Mathguy, don’t you think your “proposal” would drive unemployment through the roof?

Just sayin’…

Polly said: “You make it sound so simple. How do you cut 40% across the board?”

My face has met my palm. Your sentiment is why spending never gets cut.

Every department has a budget. A budget ultimately has one number, called the “total”. This is far removed from rocket science: CUT THAT TOTAL 40%. In every department. How each department handles such a cut is its business. Each department has 100s to 1000s of employees. Even cutting personnel, there are still people left over to determine how such a cut is fully managed.

And if the department tries to claim it can’t even do that much, then you may as well cut their budget 100% and padlock the doors on it.

At any rate, THAT is called “across the board”. It’s not difficult. It’s not incomprehensible. It’s English. It’s math. And eventually you’ll have to do it, and the longer you wait to do it, the harsher it becomes. So why not just do it, and do it now?

The real answer is that you can’t do it when 98.5% of the voters in 2012 selected Democrats and Republicans who refuse to make any cuts whatsoever, or make such a pittance of cuts ($80 billion, maybe, out of a $1200 billion deficit) that it just doesn’t matter. Americans obviously want the government to collapse, but before it does, it’s going to force Americans to endure the worst effects of the collapse before it allows itself to suffer. Ultimately taxpayers will just keep being forced to pay for government services they can never actually receive. We’ll have to deal with that for some time, since Americans have no spine.

“CUT THAT TOTAL 40%. In every department. How each department handles such a cut is its business.”

Spurious assumptions underlying this nonstarter of a recommendation:

1) All programs are equally valuable.

2) All programs are equally robust to a 40% reduction in their budgets.

3) It would be better to do an across-the-board 40% reduction, without considering 1) or 2) above, and face the severe curtailment or elimination of high-value programs in order to treaty low-value programs “fairly” (aka “communistically”) than to prioritize cuts according to the value of programs.

Fuggetaboutit.

CIBT, there’s no such thing as determining the value of programs, since when you do that, nothing gets cut. All programs have defenders and their presence crowds out the fiscal conservatives entirely.

An across-the-board cut is the only thing that will work… at least, according to plan, before catastrophes impose natural cuts. I’m talking about managing the disaster, not letting chaos manage it.

That’s the unfortunate cost of having an empire. Military spending is automatically a major budget item.

Just imagine how wonderful if the USA (4.5% of the world population) spent a similar % of the world’s total military expenses. We’d see military spending here drop over $500 billion. That’s about 30-40% of the budget deficit right there. And America doesn’t need to spend much at all on real defense, since we have oceans protecting us by default, and the only border threat possible is with Mexico, and that’s not much of a threat except for purposes of illegal aliens who largely come here for work.

Sadly, our military spending is not for defense. It’s for being very offensive. That’s what empires do: Attack other nations, almost constantly. And it automatically dooms the empire.

Simpson-Bowles.

Not enough cuts for TODAY’s seniors relative to tomorrow’s.

I agree but you do see that for “TODAY’s seniors” they have no chance to rearrange their lives to compensate for these changes. It isn’t fair but at the same time their ability to adapt at this point for most of them has passed.

“…bring them all home….”

Aren’t you arguing against your own self-interest here? There are an awful lot of American funds invested in multinationals, including, I might venture, some that support your enterprise. Do you think it wise to just abandon American infrastructure abroad to fend for itself?

Then there’s the sticky fact that American military is itself an infrastructure– and a highly lucrative one at that. Lotsa Murkin pension funds tied up in defense stocks, neh? Face it, American military bases are there to protect American corporate interests. Think of the jobs!

We can create a lot of jobs blowing up perfectly good buildings. Think of all the jobs it creates. Think of all the materials we’d need to buy from multinationals.

This is the same old tired broken window example given out in economics class as an example fallacy. Not all GDP is created equal. Some GDP is a rent (or a tax if you will) and does not increase the capital base or the nations wealth. It is a waste of U.S. human resources.

It’s high time Japan, the EU, England, Korea and the rest funded their own defense. I’m not saying we can’t work together. But there is no reason for the U.S. to borrow $1,200 billion / year from Japan et al each year to pay for the defense of Japan et al. In fact it is madness. When we leave these countries will build up their own military and fund it themselves. Although they may need to cut some domestic programs to do so.

And how our self interest played out in Vietnam? Laos? Cambodia? Iraq? Afghanistan? That’s just paid off in spades.

Guess I needed my sarcasm tag.

OK sorry I didn’t catch that.

+1 - Agreed with all implied and specified.

How many countries do we have needless military bases in?

How many countries are there? OK, I see…………

Let’s accept reality for a moment. If you are in the median income bracket and look at those in the 90% income bracket, do you not say “They can afford to pay more” when the politicians or the media give you a choice of cutting government services or increasing taxes?

And now you understand my comment… why should you do without when I can pay more? There’s plenty of fat to cut before you get to the meat…

The bottom 80% are the turnips that can’t be squeezed anymore for tax revenue.

The top 10 have been manipulating Congress for years to change the tax code/laws to benefit them, and to cost-shift onto the middle class.

Simple logic dictates that the majority of any tax increases are going to those who have the greatest ability to pay. The bottom 80% will “pay” by getting services cut.

Simple logic and common sense.

Rich people don’t want to pay their fair share, period. That’s why the best investment in the USA is buying a Congressman/regulator.

First they bitch about paying for stuff “they don’t use” and lobby for user fees. Then they lobby to be exempted from the user fees.

And the fact that you think it’s the top 10% income bracket that is manipulating DC politics to their benefit is surreal. It is a political system for the .1% by the .1%…

For 2011, the top 10% income percentile puts you at $160k gross. If you think that is living well in MA, you need to come here and experience “Taxachusetts” for yourself. We have some of the highest costs for education, health benefits, food, energy, taxes, and of course real estate, in the country.

Just because that income would let you live well in fly-over country doesn’t mean you could do the same on the coasts.

thank you for your “Romney Moment

Romney’s 15 minutes of fame are over. And not a moment too soon.

Wow…I’ve been manipulating congress…sweet!

These comments are so far of the mark it’s ridiculous.

“The bottom 80% are the turnips that can’t be squeezed anymore for tax revenue.”

Seriously X-GS, I did not expect you to roll out the victim card. The bottom 80% in America are the top 1% in the world.

Wtf is going on in greece right now with a 50% unemployment rate for those under 25.. I guess Bush is/was a better leader than those oligarchs because we don’t have 50% unemployment???

How about some common sense. We take in about 2T in tax revenue per year in our current screwed up system. We spend about 3.6T. All we do is go back to *just* spending 2.0T per year with NO increase in following years. Our debt magically goes own. Yes, lots of people lose jobs.

Then they get jobs again… with a balanced budget… and things are peachy!

The bottom 80% in America are the top 1% in the world.

You forget that EVERYTHING is far more expensive here.

The bottom 80% in America are the top 1% in the world.

Then where are our top 10%?

You forget that EVERYTHING is far more expensive here.

We’re still in the 1% in standard of living—in other words, even factoring in the increased expenses.

“Yes, lots of people lose jobs.

Then they get jobs again… with a balanced budget… and things are peachy!”

Could you kindly elaborate on the second part of your prediction? In particular, what is different now versus during the 1930s that will lead to rehiring of the greatly-increased unemployed share of the workforce?

“…tell me what that’s about…”

Ronnie Reagan’s tenure as President of SAG?

Really? Because all those hourly wage earners, part-timers, and retired types in the bottom 80% work harder than the people who start small businesses and employ them? When that wage earner gets to work at 9 and leaves at 5 and doesn’t have to worry about payroll, government regulation, taxes, sales, etc? He or she is working harder?

You’ve obviously never started or run your own business or managed one. Physical labor or working “overtime” does not mean “harder working”…

Oxide has never run a successful business. You have no clue how hard us 1%’er have worked. I had 20 years without a single vacation. It’s not like running a small construction business or something like that. You don’t get into the 1% by picking low hanging fruit and putting in forty hour weeks. It’s one continuous push past all your personal boundaries.

I had 20 years without a single vacation. It’s not like running a small construction business or something like that. You don’t get into the 1% by picking low hanging fruit and putting in forty hour weeks. It’s one continuous push past all your personal boundaries.

That’s fantastic, seriously. Congrats to you on your achievements.

However, I don’t want to allow people with money to buy politicians and set up a system to extract value from me and mine.

The bottom 80% or whoever? These are cops, firefighters, infantry who guard the walls and keep you and yours safe and secure. They’re the garbage men, asphalt layers, butchers, cashiers who allow you to live in a clean and tidy society with lots of services.

I’ve met the working class. They’re not monolithic. I’ve met shiftless scumbags, felons even (white by the way) whose raison d’ etre is stealing. Who are dumber than a bag of hammers. I’ve also known hardworking people, which most of these are, who are the ones who provide the goods and services which keep the real economy moving.

I respect hard workers, and high achievers. I don’t idolize them. They fit into society in their place. They organize workers to do big things. Without leaders, the workers would be milling about aimlessly. Without workers, the leaders would be sitting around, dreaming. It takes both. Just like to make water, you need oxygen and hydrogen. You need less oxygen and more hydrogen, just like you need less leaders than labor. But they’re both important. To be a leader, one has to have a strong ego and a thick skin. But they have a tendency to mythologize themselves too.

However, I don’t want to allow people with money to buy politicians and set up a system to extract value from me and mine.

Exactly. I have a lot of respect for those willing to push past all their personal boundaries to achieve. But I don’t want to allow them or their trustafarian peers to enslave everyone else who just wants to put in their day’s work and go home to their family.

“OOohhhh, look at me, I’m special because I started a business and, oooohhh, ooohhhh, look at mee, look at meee, look at what I’ve done, look at meee.”

Narcissists suck.

http://narcissists-suck.blogspot.com/

Once upon a time…

Once upon a time GrizzlyBear Americans couldn’t wait for the chance to fire their boss.

Once upon a time GrizzlyBear Americans wanted to be productive and run their own businesses.

Once upon a time GrizzlyBear Americans thought that adding value and being of service was noble and in and of itself worth the burden regardless of the reward.

And then I clicked on your link…

And learned you are in a support group for major depression…

I have no defense because what you are experiencing is the deepest depths of hel. I’m sorry!

Please find a good psychiatrist (a medical doctor not a psychologist) today and get antidepressants.

I’ve seen them change lives around in a couple of months. There is hope. They do work. Hang in there and have faith! 30 years from now you’ll look back and realize you’ve had a wonderful 30 years.

Peace

Truth hurts, doesn’t it? I hate narcissists.

“No life is ever a complete failure; it can always serve as a bad example. At least a narcissist is good for something.”

Amen, Robin, Griz.

The self-congratulation and narcissism exhibited by these posters is grotesque– and the silly amateur diagnoses in the face of unpleasant truths, embarrassing.

“…Physical labor or working ‘overtime’ does not mean ‘harder working’….” AYFKM?

Try thirty years of 16-hour days at minimum wage jobs to put your kids through college like my neighbor does. Try a career in third world medicine after 10 years of post doctoral training like my father did and sister does now. Try literally picking that “low-hanging fruit” and cultivating it for a living, or cleaning people’s houses seven days a week all your working life, and maybe, just MAYBE I’ll listen to your spew about how “hard” you’ve worked in your air-conditioned offices. I can almost see the bloodied fingerprints all over the keys of your laptop….

Writing code at 3AM because it’s your project and cleaning office building lavatories at that hour because you need the money to feed your kids are not equivalents.
No, they’re not.

Of course. This is the divide and conquer game, and it’s working…

Before the election, the anger was directed at the 1%, now that Obama has won and the election is over, it’s “stick it to the 10%”.

Wait for Greece-like action in the US… it will come if the crooks and socialists continue to squeeze those of us who are still productive and not on the government dole…

Before the election, the anger was directed at the 1%, now that Obama has won and the election is over, it’s “stick it to the 10%”.

How many of us actually know what bracket we are in?

http://www.visualnews.com/2012/01/16/compared-to-the-us-what-percentage-income-are-you/

With all the talk about the 1% in recent months, it’s been pretty common to wonder where we all measure up compared to that famous percentage of wealth. To help answer the question, the New York Times has put out two graphics analyzing what the wealth distribution of the nation really looks like. The first is a detailed interactive graphic allowing you to directly compare your household income to the national average, state averages and even your local county. By inputting your household income, the graphic generates your percentage compared to the area you select. The second graphic, a colorful grid, examines which professions hold the highest percentage and number of 1 percent-ers in that field in the nation.

How about you increase the long term capital gains from 15% to 20%

20%??? How about we increase the capital gains rate enough that the 1% pay the same rate that I do? I’ll even take a rate-reduction sufficient to meet them in the middle…

Your taxes buy your market.

And there you have come upon the incomprehensible truth: Our society has reached an inflection point where too many are dependent upon government tax dollars for their livelihood.

Whether it be the welfare queens and SNAP recipients, the state and municipal Unions, the public educators, the MIC, the FIRE sector, etc., our society can no longer function without the wealth transfer from private industry. There was a time when the majority were not dependent upon government, rather private industry. Are we doomed to continue to fall down the rabbit hole of diminishing socialist returns?

That apparently “incomprehensible truth” is that the taxes you pay ensure that you will have an income with which to pay them.

“our society can no longer function without the wealth transfer from private industry”. How the privet company is functioning please? It employes the employees, who works 8 hour, but gets 1/4 of the pay out of the value he created. Other 1/4 goes to your expenditures and 1/2 goes to you. Privet industry doesn’t create wealth out of thin air… in some way he “cheats” his employees and the customers to whom he sales his products or services. Privet entrepreneurs also depend on government to help them to “cheat” by creating laws defending them against Unions and lowering taxes on their incomes. You consider yourself a hero , but what you do is very well reimburses your efforts and motivation.If you did not go to vacation for 20 years it is not a heroism , it is just a greed… I had a small business too and I know that feeling…

“If you did not go to vacation for 20 years it is not a heroism , it is just a greed… I had a small business too and I know that feeling…”

Interesting contrast to the self-congratulatory attitude expressed by another business founder above. Makes me wonder whether most entrepreneurs feel morally superior for their sacrifices, or merely recognize the sacrifice as the price of success…

Lol. And what do you think I’ve done in my life to get to this point? Join the infantry and hump TOW missiles in the desert and come talk to me. Go work 16 hour days on a commercial fishing vessel in all types of weather and come talk to me. I’ve done the working class hero crap. It leads nowhere.

As CIBT said, want to actually get ahead? Make some sacrifices… Sweating in 120 degree heat just means you need to drink more water. Nothing special about it.

and phase it out very gradually (but absolutely!) over a period of decades,

+1. This is the smart way to make major changes: with lots of transparency and plenty of lead-time.

Unfortunately, our Congress apparently is not smart enough to structure change in that manner.

Changing carried interest to all ordinary income would raise about $30 billion annually. Candidly, it’s not as much as people think.

$470 Billion to go (to cut the deficit in half only).

What’s next?

It’s a handout to those who absolutely don’t need it. It needs to die a quick death…

It’s $30 billion that should go to the treasury without an if’s or’s or but’s - let’s pass that bill today. Make it retroactive for 2012 please.

The rest comes out of Medicare / Medicaid and Defense.

Paul Ryan is the staunchest supporter of the carried interest exception in Congress.

The “hand-out” is from the investor to the manager, allowed by the law. It is not a handout by the government. Changing the law alters taxation for different ways of investing.

So, if you want to make carried interest illegal, fine.

The only way to fairly change it would be net neutral to the treasury, giving 100% of earned capital gain to the investors, a deduction for the fee they pay the manager who is managing their investments, and 100% ordinary income to the manager.

No more giveaway to the manager, the investor keeps all of their capital gain for the investment capital they put at risk, and the Federal government gets $0 in additional taxes.

But I’m sure that would be disagreeable as well, since it doesn’t raise revenue, even though it removes the “giveaway”.

BTW, I’ll be willing to bet that if you look at the capital gains earned by founders of companies (who also put someone else’s money at risk to make it all work), the amount is a significant multiple of carried interest…why are they not in the crosshairs?

Because the investor class is the favorite punching bag.

If you want to raise revenue, fine. Tell me, what’s wrong with the Simspon/Bowles method of lowering rates, and taxing ALL income the same (capital gains as well).

This hits Warren Buffett, it hits carried interest, it hits other wealthy folks who make a huge amount of income from capital gain, hit hits billionaire founders of companies, and places less burden on the folks working their butts off for 100% ordinary income.

It simplifies the tax code, and since it is still progressive, the capital gains for lesser income earners is still taxed at pretty darn low rates (lowest rate is 12%, middle 22%, highest 28%).

What is the objection to the Simpson/Bowles tax plan? That capital has already been taxed and shouldn’t be taxed again?

Please…this is exactly what is proposed through changing the carried interest law…it is adding more tax to capital that has already been taxed…

And doing it in a way that doesn’t give anything special to the manager, and shifts all the capital gain benefit back to the investor is revenue neutral to the government, so people don’t like it.

Paul Ryan is the staunchest supporter of the carried interest exception in Congress

Yes, but neither he nor Romney was campaigning on a platform of raising taxes on what is a middle-class income on the coasts.

But… Obama won reelection and the majority of his supporters favor a “tax the rich” mentality. Too bad for us that for those poor sobs, “rich” is everyone above them on the income scale…

And to pile on…if carried interest was changed, in a way that was NOT revenue neutral to the US Government, don’t you think that managers would change the nature of their relationship with their investors–so that their investors were NOT at a disadvantage as compared to investing the money themselves?

Instead of being in a partnership, subject to partnership taxation, don’t you think they would simply become consultants? That way, the investor would keep 100% of their capital gain, and the manager would get their ordinary income, and the Feds would get $0.

In other words, the $30 Billion is an illusion.

Rental Watch, I must be missing something in your math regarding carried interest. I’m not saying you are wrong. So please correct me.

2012 Current revenue
Gain $100
$80 => Investor
$20 => Manager
Tax paid ($80 + $20) x 15% = $15

2012 with no carried interest:

Gain $100
$80 => Investor ($100 cap gain - $20 fee)
$20 => Manager (Ordinary income)
Tax paid ($80 x 15%) + ($20 x 39.5%) = $19.90

That’s not revenue neutral - it is a net gain of 33% for the U.S. treasury on the same transaction pair.

Make my day - pass Simspon/Bowles. At least the band-aide will be ripped off and the uncertainty will be over and business people like myself can set a course. This foolishness needs to end now. Because I may not have built that - but I sure as heck can rip it down.

they would simply become consultants? That way, the investor would keep 100% of their capital gain, and the manager would get their ordinary income, and the Feds would get $0.

Why don’t they do that now?

Why don’t they do that now?

Because of carried interest tax benefit.

@SF Bay Area:

2012 With Carry, $100 capital gain
Total tax of $15k, I agree.

2012 With Carry change
Investor:

$100k capital gain=$15k tax
-$20k consulting expense (managers are employees, right?)=$7k tax benefit to offset this expense against other ordinary income

$20k ordinary income (managers are employees…)= tax of $7k, offsets the $7k tax benefit from the investor…

Total tax to the government is $15k.

This all assumes that there is a structure that allows the investor to call the expense to the Manager an employment or consulting expense that can be offset against other ordinary income (of course they will try).

BTW, I used 35% tax rates for ordinary income.

@SF Bay Area…I agree 100% on passing Simpson/Bowles today…however, I have no confidence in our politicians to get it done.

They could try that and go to jail.

It’s basically a mutual fund. You take the fees out of your total gain at a 15% rate. Then the administrator has to pay his take at 39.5% (or 35% in 2012 per your example).

Otherwise the IRS already knows what a financial adviser is and dictates how they must be deducted:
http://www.irs.gov/pub/irs-wd/0721015.pdf

Their fees can’t be added to the cost basis and carried forward. If they are an adviser then as you suggest then their fees could be taken against ordinary income. But we are talking about extremely wealthy clients. So first the fee will be subject to a 2% of AGI threshold of the client. Next they will be limited by the AMT on the clients income. All things being told I don’t know any wealthy wage earners who are not already limited by the AMT so I suspect 100% of the deduction would be wiped out. So *NONE* of this could be deducted this way.

The IRS would be all over their a.. if they tried to make a financial adviser an employee - they have made this perfectly clear. See the memo above. They are not managing a property. They are acquiring and selling.

But they’re not mutual funds. Hedge funds could be thought of this way perhaps, but their carry is generally not capital gain anyway, since they generally are traders with short term income, and no matter what people think, the PE managers can’t magically turn ordinary income generated from investment activities to capital gains.

Venture Capital will run into the 2% of AGI problem.

What about other types of private equity that don’t trade in public (or even non-public) securities?

How will they deal with managers of property and partnership interests? Real assets (timber, energy, real estate), etc.? In these cases, the people ARE managing property, not simply acquiring and selling securities with the click of a mouse.

Sometimes the fees are subject to the 2% AGI threshold, many times when property is involved, not.

And THESE are the cases where capital gains are actually more likely to be generated in the first place, where assets are held and managed for many years, NOT bought and sold many times per day like Hedge Funds.

How do you think the IRS will view small partnerships, with a sweat equity partner and a cash partner? When they sell the company, how will the “carry” be treated? They weren’t dealing with securities or investments at all.

It’s messy–another reason to go for reform rather than changes that tend to make accountants and attorneys more money and make the tax code even more complex. Where my analysis totally breaks down is when the investors are non-taxable entities (since there is no benefit to the expense from the investor side).

I admit, the benefit will be greater than $0 to the US, but it won’t be $30 billion–and you better believe attorneys will be working around the clock to make it as close to $0 as possible. But I also think you and I agree–pass reform like Simpson/Bowles…rip off the bandaid…get it done.

I’m just letting you know I came back to read your response and find it well stated. But I’ll have to respond another time.

Surely the private equity guys have at least some claim to carried interest. However, the typical equity hedge fund has no valid claim to such - it is absurd. I’m sure you would agree. And I say that in full disclosure having some hedge fund clients.

When it come to alternate investments in real property the IRS document I posted does not apply. Timber actually looks like a excellent investment to me. I’m actually thinking about it.

Partnerships — I’ll have to get into another day.

When you look at the issues with double taxation it makes you wonder if corporate rates might be too high and if things like dividends might need to just be passed through and taxed as normal income once by the recipient and end special tax treatment -and- double taxation at the same time. But I know… oh the humanity - the windows and orphans!

“Simpson/Bowles…rip off the bandaid…get it done.” That is what I totally agree with. But I think you and I both think it is unlikely at best. That doesn’t undermine the validity of the cause. On the receiving end of the income we need to equalize the tax on income from all sources.

I hear you 100%. You seem to get it.

I get frustrated that people seem to think that carried interest law somehow magically turns ordinary gains into capital gains, and that such laws ONLY benefit billionaires, when they benefit every “sweat equity” partner in the country, big and small. They also think this was some loophole engineered by PE funds, when it has been a fundamental part of partnership taxation for decades.

In any event, making partnership taxation more complicated is not the answer, because it doesn’t address the “Buffett Rule” issues, the small matter of others utilizing outside investment in order to get themselves capital gains, etc.

The only “fair” and reasonable solution to the undertaxation of the super-wealthy who get mainly their income from capital gains is to somehow make capital gains progressive to some extent. Simpson Bowles does this by virtue of lumping all income together.

We need big and bold plans…otherwise, you continue to put your fingers in leaks in the dam, and you don’t ever stop the flood.

It has got to be equalized on the income level. That’s the bottom line. The “Buffett Rule” - don’t get me started!

My main concern is international. Harmonizing this is important. But possibly with some time given to phase it all in…

13.56% for the entire top 1.91% is capital gains. Some of this is just normal run of the mill capital gains and it’s spread across the whole group. What you are thinking about is a few thousand households in the entire U.S. More than 1,000 and less than 10,000. Let’s call it 2,000 (by some estimates it is a little over 2,000). Our of 142 million tax filing households 0.000014th that or the 0.0014% is who you are talking about. This whole class warfare thing is bunk. The rest of the 1% are paying out the nose in taxes. If you want war have war against the HIPI’s - Hedge funds, Investment bankers, Private equity and IPO ponzi’s aka the “HIPI’s.” The rest of us will be paying up to 60.5% of our income in income taxes in 2013.

If you want war have war against the HIPI’s - Hedge funds, Investment bankers, Private equity and IPO ponzi’s aka the “HIPI’s.”

That’s what I’m doing.

@SFBA

There was a paper about progressiveness of the tax code written by a Berkeley economist posted here a while back.

His conclusion?

1. Income taxes are progressive enough (which is why Obama’s push only on the high end even higher was so offensive to me–he’s further left of a Berkeley economist on this matter as it relates to the progressiveness of the tax code)

2. Lack of progressiveness found it’s source in two places, 1) Capital Gains taxes being too low (an argument for Simpson-Bowles) and 2) actual taxes being paid by corporations being too low (too many loopholes and the like).

I went to Berkeley. Was it Brad DeLong? He’s OK. I’m a little more Austrian than him. But I do agree the tax code is more than progressive enough. The debate was really class warfare. But to Obama’s credit - it worked - he won.

Hey but be thankful we live in the states. At least here we have a fairly conservative agenda on both the left and the right. In many places in the world like Brazil for example you have a choice between the totalitarian Marxist International Socialist and the totalitarian Nationalist Socialist Fascist. It’s really a joy to work there. Some time I’ll have to set “90% Rio” straight. He has no idea that a family member of mine was the U.S. Ambassador to Brazil - that I learned Portuguese in College, that I’ve been there and that I know all about this commie hell hole. Did you know their current president was a little gun carrying Marxist that set bombs, robbed banks and kidnapped diplomats. Oh but I’m sure that it was for the kids… yeah right.

I’m thankful every day…not only do I live I live in the States, but I live in fantasyland within the States (mid-Peninsula). I just hope my kids somehow realize how good they have it…

I don’t know if it was DeLong or someone else…I just remember someone posting it on this board trying to make the point that our tax code needs to be more progressive (higher income taxes on the wealthy)…I don’t think they read the conclusion…that income taxes were plenty progressive, but capital gains and corporate tax code needed work.

“At least here we have a fairly conservative agenda on both the left and the right.”

Great point, and one I wish could have been kept in sight during the presidential election campaign.

The flat tax thing is just the silliest notion in the world and clearly comes from people who know nothing about economics and business in the real world.

There is nothing wrong with a progressive income tax system as a baseline. People on the bottom end that have a 100% consumption because they live hand to mouth on essentials clearly should be paying less than someone like me that has excess.

But when I’m supposed to pay 60.5% of my income in 2013 and people are telling me I’m not paying my fair share while 50% pay nothing? That’s just class warfare.

Polly, incorrect. Wage income is no longer taxed. Interest income and capital gains income can continue to be taxed. No person can ever be arrested for failure to pay a wage income tax. A business owner could be arrested for failing to pay a wage tax.

Corporate taxes can continue to be taxed at a 35% income tax rate . You want the wage tax to be higher??? Fine! You can fight with the businesses to raise their tax rates instead of picking on people earning the wages. Since there would be no more wage taxes, the whole deduction/paperwork thing for wage taxes can go out the window also… Now tell me there isn’t an increase in efficiency due to less paperwork..

You want the wage tax to be progressive so that the lower wages paid to an employee the lower the tax rate? Really? You want to reward companies for firing 1 employee @$20/hr and hiring 2@$10/hr?? I would think you would want companies to pay a higher tax rate for something like the first $7/hr of wages so that the country can get actual benefits for their work. You aren’t saying we should get rid of the minimum wage are you?

Why don’t we implement a sliding scale tax rate on sales tax then? The higher the purchase $$ amount of an item the higher the tax rate… ??? If you can afford to buy a higher priced item, you must be able to afford more, right?

SF bay.. why should a company be effectively paying less wage tax for someone living hand to mouth? Shouldn’t the people (business owners) benefiting from “indentured labor” basically have to pay more to support the social structure needed to support those people? Isn’t that incentive to business owners to increase productivity of the underclass to lower their effective tax rate as they can afford to pay a higher wage?

mathguy most of the guys I’ve hired for $20 / hour can’t even make me money. They surf porn all day, call their friends on the phone, show up late, make mistakes that actually end up costing me money. No thanks! They guys I hire for $200 / hour make me a ton of money. They go above and beyond the service of duty, have incredible ethics and think for themselves. I’d gladly pay a higher percentage tax for the $200 / hour guy. Hiring the $20 / hour guy is a gesture of welfare on my part already. I hardly need to be taxed for the $20 / hour guy on top of it. It’s like adding insult to injury.

But we had a big storm over a week ago.

Which was predicted by Bill Gray based on natural cycles without any AGW, years ago. Is the Atlantic warm? Yes, but it is primarily due to natural cycles not man made activity.

Maybe the 1998 record is bogus and was made up by the corrupt NASA/NOAA cabal. It’s been proved by the scientist over at WUWT that most of the official temperature records are BS and much lower than the MSM lets on. BTW why did Dr. Gray stopped forecasting hurricanes?

I don’t know do you? I know he never went along with the AGW theory.

I do not know what WUWT even is. I hardly think they proved anything. However, to the degree the data is corrupt it appears to be the other way. Measuring instruments moved to heat islands etc.

Emissions up 50% since 1990, but Global temperatures flat since 1998, seems to break the causal chain that claims man made activity has been the primary reason for the clear increase in global temperatures between the late 70’s and 1998.

Are there no lagged effects on your planet?

Gray’s model was based on historical frequency and was modified in the last few years to reflect his theory of ocean cycles. Turns out using historical models has been a poor forecasting tool the last decade. Who’s forecast got Sandy right? It was the European models that started using SST and global humidity back about 5 years ago and they now rank #1 over everything the US puts out including Joe Bastardi.
Do you know where the big controversy about urban heat islands can from? That right, WUWT = WattsUpWithThat.com

Even your side concedes that heat islands have contributed:

phys.org/news/2011-10-urban-island-effect-small-global.html

There is a big difference between including the GW that has occurred but is primarily due to nature in a model and showing that man has caused the warming.

BTW, you are toast on the bet that this year is going to be warmer than 1998, two more months and I win.

“lagged effects.”

Or latent heat effects. The air temperature will not rise if all the heat is consumed in melting the Arctic ice cap.

And Oxide, why did that not happen between 1977 and 1998 when there was more ice?

I see what you mean Dan, that single indicator, estimated to .001 degrees overrides every other measurement. Now if we use the global number of discrete actual recorded high temperatures then 2012 blew 1998 out of the water 4 months ago. http://www.ncdc.noaa.gov/sotc/global/2012/9

You lost the bet when you made it.

No blue star, the global temperatures combined water and land will be less this year than 1998, that was the bet. You lost it when you made based on the data available there was not way it was going to be a record year. BTW, it is called GW not global mesa. It should go up if not every year at least every few years since Co2 is the primary driver of the warming and it has done nothing but go up every year.

I realise you would like to change the bet but you made it and now you know you have lost, you would like to change it but no it does not work that way.

From the NOAA report September 2012 global rankings:
Land and Ocean
+0.67 ± 0.11 +1.21 ± 0.20
Racking:
1st Warmest
Warmest: 2005, 2012 +0.67 +1.21
133rd Coolest Coolest: 1912 -0.55 -0.99

How can you read that report an come away with the impression that GW has stopped? It seems we are arguing past each other. In the real world AWG is not a contest, it’s a struggle of adaption for most of the lifeforms on the planet who normally would have thousands of years to adjust to what is now happening in decades.

PS: I have a confession to make, I really thought Romney was going to win. My calculation was the super PACs + voter suppression + FOX 24/7 attacks would have put Romney on top. Lucky I didn’t make any bets on that contest.

Because one month when we had a budding el nino which has now stopped is not an entire year. Yes, we are on a high mesa where records are easy to make, however, there has been no meaningful change in 15 years. That suggest natural and not man made causes. Thus, any money we spend on global warming should have been spent on mitigating the impact of the warming not reducing co2 which is not the primary cause of the warming.

However, it is probably too late or necessary to mitigate since after we get out of this peak sunspot cycle probably sometime in the Spring of 2013, we will see that records are less and less frequent and natural cooling has began. This natural cooling will be far more than some warming that can be attributed to co2, which I have never claimed had no impact. I have just said that it is a very small part of the warming perhaps 1/7th.

China led the table of emitters in 2011 with 8.9 billion metric tons, up from 8.3 billion a year earlier. Its CO2 output was 50 percent more than the 6 billion metric tons in the United States.”

I read in a few years all middle east oil will go to Asia and the USA will be energy independant. Not that energy will be any cheaper it will probably cost more as the cheap Arabian oil is Bid up by China.

that’s alot of oil burning thats going to come on line in the next few decades

So far with 10 months of the year gone by the average global temperature combined ocean and land, is .526 C above the base compared to .59 C for the entire year of 1998. Thus, while it is theory possible for this year to be warmer, in reality it is impossible. People like cherry pick and use just the global land or just use continental U.S. but if you are going to call it global warming you need to use the entire globe, land and water. The base is determined as follows:

GLOBAL Land-Ocean Temperature Index in 0.01 degrees Celsius base period: 1951-1980

You are correct. If we go into a Maunder minimum period (50 years with no sun spots) then global cooling will begin to neutralize(not reverse) co2’s effects on the atmosphere. When that happens there will be a new panic about too much co2 in the ocean I guess.

too much co2 in the ocean I guess.

Correct.

Had I called this election with my gut, I would have guessed Romney. The youth vote usually disappoints and I would have guessed 2008 was a fluke. The fact that Rasmussen had the LV’s so close kept my from going with my gut. It may not have been his best year but he was still close enough. It is a credit to this generation that they are so politically active at a young age.

Interestingly, what almost tipped this election to Romney, contrary to what many people predicted on this board who though Obama would win, the swing states did not vote differently than the popular vote, in fact states like Florida were even more for Romney than the national vote. Rasmussen did catch that swing, if he did miss the extent of the popular vote.

Dan, didn’t you think the hundreds of millions of super PACs $$, the lopsided Republican redistricting and the surge in voter ID laws would be icing on the cake? Maybe the real tell was McCain got more Mormon votes than Romney did. What’s up with that!?

Maybe the real tell was McCain got more Mormon votes than Romney did. What’s up with that!?

I thought that was really interesting, too.

Goes great with saltine crackers

Thanks for the reminder, ahansen.

It is a sad state of affairs when comedians are a more reliable news source than, say, Fox.

Certainly MSNBC. By the way Pew rates Fox far more fair than MSNBC.

Prices of used cars have been going up out here since 2010. Anything worth owning is $5-6K around here.

Since 2009, we’ve been seeing convoys of auto transporters on the highways, hauling used cars east and west. You very rarely saw this before then. Like farmland, the locals are being outbid by people on the coasts.

The main problem is that new cars cost EXACTLY THE SAME whether you buy them on Manhattan, or out here in BFE. Most families out here are barely making 50-60K year.

$70K buys you a fully loaded Suburban. It will also buy you a semi-decent 2-3br, 1 bath house in 90% of the country.

Prices of used cars have been going up out here since 2010.

You can thank Cash for clunkers for part of that. There would be far more serviceable used vehicles on the market if not for that. Supply constraints caused by government intervention in yet one more market in an attempt to head off deflation.

$70K buys you a fully loaded Suburban. It will also buy you a semi-decent 2-3br, 1 bath house in 90% of the country.

That same 2-3br/1 bath house in eastern MA will cost you anywhere from $150k in the decaying urban mill towns surrounded by retires and Section 8 to $250k in the blue collar subburbs. Go over to the tonier town of Newton and that 3/1 heads up over $400k. Closer to Boston and that 2 bed 1 bath SFH becomes a condo and it’s price also heads north of $400k…

When it comes to real estate prices, we’re not San Francisco stupid, but we’re close.

When you need a diagnostic computer just to get the car to tell you what is wrong with it?

A surprising number of things can be done without talking to the computer, such as the starter above.

One frustration I do have with the news cars such as the BMW that I bought, is that even something as simple as a battery change requires telling the computer to recalibrate to the new battery if you want to get decent life from the battery. I’m not happy about that. But soon enough people will be sharing little utility tools that you can run on your laptop through an OBD-II cable to take care of that under the proverbial shade tree.

But yes…if you’re completely computer illiterate, you’re very limited.

I do find it interesting that platinum and palladium are taking off today. Since I own them, in fact more than gold, I am quite happy. Gold today does seem to be an outlier. That is why gold is not and cannot be in a bubble. Plenty of forces trying to hold it down so it does now show the true inflation in the economy. BB wants house and stock appreciation, he does not want gold to go up.

“…trouble in the U.S. as the fiscal cliff causes the opposite.”

Don’t increased prospects of a compromise work to strengthen the dollar and hammer gold?

Not if the “compromise” does not really put us on the path of a balanced budget and allow the Fed to let interest rates rise to a real rate. As long as interest rates are below inflation, gold will rise even with the Fed trying everything in its power to keep it down.

I do find it interesting that platinum and palladium are taking off today. Since I own them, in fact more than gold, ”

way more useful metals than Gold

I agree with that but I think China is loading up on the gold so it can be the world’s reserve currency.

I agree with that but I think China is loading up on the gold so it can be the world’s reserve currency.

You think anyone actually trust them if they said that the yuan was exchangeable for gold??

Ha!

Dump gold today or suffer devastating losses later.

You can easily move gold to where the demand is, mainly Asia, you cannot move, easily, that house that is in a slum anywhere. If you can’t see that you are not trying to see the difference.

As long as the Fed continues with its serial QEs, the precious will do fine.

Until it doesn’t.

“You can easily move gold to where the demand is, mainly Asia, you cannot move, easily, that house that is in a slum anywhere. If you can’t see that you are not trying to see the difference.”

Not seeing your point, as apparently Asians can come to the U.S. to buy houses. Why does the asset have to be moved to where the investors are when the investors are completely mobile?

Lots of people are moving to twitter exclusively…since they seem to get very little response from a FB posting even if you have thousands of friends/fans…….FB is the back up plan…..

For someone who uses social media socially rather than to support a business, I see it exactly the opposite. Twitter is only useful to me as a quick world new update.

“Main purpose is to preserve wealth not gain it. ”

Good idea.

“However, if you can borrow enough fiat currency at a low fix rate and then buy gold with it, you can get rich or add greatly to your wealth and that is what many in the PTB are doing.”

Sounds more appropriate for a Megabank w/ access to ZIRP financing than something for individual investors to try.

It’s been a rough day. My compassion meter is on “E”.

Wow, many of the the best schools and hospitals are in the northeast, and now (according to GS) you’re getting all of the used cars — which, you don’t really need, because you have decent public transportation up there, too.

And you’re still hatin’…

Yes, most definitely. No wet cat food for the wretched refuse. We’re talking dry cat food, and water to wash it down…

“…and water to wash it down…”

That better be cold faucet water.

No canned tuna on alternate days, as my MIL’s cat used to enjoy…

I’ve got the “Grizzly Man” plan.

Go to Kodiak Island, and live with my friends, the Grizzlies…

That, or the old “running car in a garage” plan. I’ve heard that it doesn’t work with new cars, because the air coming out the tailpipe is cleaner than the air that the car breathes.

You’re going to make some grizzly very happy someday.

Undue influence - ?

“Death with Dignity” act.
This has been allow in Oregon for years

Under similar circumstances, if Bush II was in office you would be calling for a special prosecutor, that is what I object to, the nothing to see here move along mentality.

I’m not defending Obama or the Dems. Yeah I still think Bush II, Cheney and Rumsfeld are war criminals.

So speculation is Obama wants to put Kerry in as head of DOD, what’s next Jane Fonda for Secretary of State!? But seriously if Obama goes outside of the Military Industry Complex for the two most influential foreign policy positions then change is in the wind.

Well he did cheat with a very smart woman, probably very pretty outside her military uniform, would you rather he cheated with a stripper with HIV?…..its not right but understandable

It is interesting how quickly Petraeus went down over an “affair”.

It doesn’t pass the smell test. Too many discrepancies in all the various reports coming out of the Obama administration for this not to be a cover-up.

Here’s a couple of issues that I noticed:

It was stated by media sources that Obama struggled with the decision to accept Petraeus’s resignation, meanwhile, it was National Security Advisor Donilon who told Patraeus to resign, according to the media reports. So which is it? Was he forced to resign or did he voluntarily resign?

The FBI says Petraeus was not the target of the probe, rather Broadwell was, yet it is Petraeus who was told to resign from the top post at the CIA. Meanwhile, it is Broadwell who has stated that the CIA was interrogating suspects in the consulate… how did she know? Was it classified information? Is that why that location was attacked, while the Obama administration continued to push the “video” and “riot” as the reason?

Lastly, Democrats stuck behind Clinton during his affairs and fought Republican efforts to impeach, and yet Patraeus lost his job as Director of CIA over an affair that was already ended? Again, doesn’t pass the smell test. Also, why was Congress kept in the dark for so long, especially when Petraeus wasn’t the target of the probe?

It was stated by media sources that Obama struggled with the decision to accept Petraeus’s resignation, meanwhile, it was National Security Advisor Donilon who told Patraeus to resign, according to the media reports. So which is it? Was he forced to resign or did he voluntarily resign?

Perhaps a clue as to where the real power is?

…the schism between Pentagon and State Dept. is culminating in a purge of neocons.

Always a silver lining!

I understand the two are not directly related, but it goes to the idea of an imbalance in the application of moral standards, especially in the Democratic party… Clinton got a pass but Petraeus didn’t.

Personally, I don’t care who Petraeus was shagging or when. That’s his business. All this did was hurt the country given Petraeus was a gifted military mind with a lifetime of experience…

Petraeus sounds more like the DOD/CIA equivalent of Lance Armstrong. He was one of the best, a model for our kids and a inspiration to our empire.

If the two aren’t related then it makes no difference that the results are wildly different. You want all ethical standards to be the same? Across what? Across government? Across the country? Who is going to enforce this?

The head of the CIA works for the president. He isn’t elected. He could get asked to resign just because someone the president likes better is willing to do the job.

Petraeus sounds more like the DOD/CIA equivalent of Lance Armstrong. He was one of the best, a model for our kids and a inspiration to our empire.

Possibly just as flawed. Not just the affair. He doesn’t seem completely clean when it comes to things like the Tillman coverup either.

Personally, I don’t care who Petraeus was shagging or when. That’s his business.

He can hardly be the first high-level military officer to ever have an extramarital affair, and I have to guess he has plenty of company in the various branches of the service. So it seems more plausible that the affair was brought to light as a cover for the real reason Petraeus was relieved of his duty.

There, I said it — showing my inner conspiracy theorist again…

It’s never about the sex.

http://www.latimes.com/business/money/la-fi-mo-mortgage-delinquency-transunion-20121113,0,5224511.story

Less and less distress, more and more money chasing it.

just bid up the price to whatever it takes to buy the house. In those cases

Wow. To what end? Are they renting them, or fixing/reselling?

My understanding is renting them out, building their rental portfolio…I suspect we will see some REIT IPOs in the coming year with this as their main strategy.