Income Restribution Day

[Naturist Mark]

Don't you remember back in July of 2010, Obama and the liberal controlled congress were referring to them as "the Bush Middle-Class Tax Cuts."

Nice attempt at revisionism. But what was really being said is that they wanted to let the "Bush Millionaire Tax Cuts" expire, without changing taxes on the first $250k in income.

[Gloria]

Nice attempt at revisionism. But what was really being said is that they wanted to let the "Bush Millionaire Tax Cuts" expire, without changing taxes on the first $250k in income.

So apparently there really was a very nice "middle class" tax cut (Thanks Pres Bush) that the liberals did not want to expire...............

My original point:.....You cannot say that the Bush Tax cuts only benefited the 1%.

[Gloria]

You mean like trickle-down laissez faire economics.

No...more like trickle-up poverty.

[Kouak]

Yes, Kouak, that is true, but increased taxes on dividends and capital gains will effect the VALUE of pension plans, IRA's etc. The individual stocks that make up mutual funds, Pensions, IRA's, 401's will not be attractive investments.

No, it will have no affect. Even if it were 100% tax. Would not make a difference for pensions and IRAs.

[Naturist Mark]

You mean like trickle-down laissez faire economics.

No...more like trickle-up poverty.

Good point Gloria, trickle-down economics IS the same thing as trickle-up poverty. Flip sides of the same coin.

[nimrod]

Recently someone was trying to tell me that income taxes were not constitutional and that no amendment after the bill of rights has been ratified. I got a good laugh out of it. It did get me thinking and found some believe that because of a clerical error Ohio was not officially a state and therefore should not be counted towards the 3/4's needed to ratify the amendment. The courts have said otherwise though.

[Gloria]

No, it will have no affect. Even if it were 100% tax. Would not make a difference for pensions and IRAs.

Let's say that Kouak Industries Inc. has a pension plan that is worth $20 million. Gloria Financial Inc. manages the fund and has done quite well by making shrewd investments, trading stocks at the right time and reinvesting dividends. The fund is paying out nice retirements but with GF Inc's management and contributions from KI Inc. the fund is actually growing. Suddenly dividends and capital gains are taxed at a higher rate........stock prices fall. GF Inc. must pass on additional taxes to the pension fund. The entire value of the fund begins to crumble. GF Inc notifies KI Inc. that their pension fund is now losing money and KI Inc's contributions will not meet the retirement payout obligations much longer. KI Inc. announces to all employees that pension benefits will no longer be available to new employees, retired employees will have their benefits reduced and employees who are currently enrolled in the pension plan must now contribute twice as much or drop the plan. Furious KI Inc. executives exercise their stock options causing a serious drop in KI Inc stock prices. Union employees begin violent strikes at KI Inc plants and Occupy Wall Street sets up a 5000 person encampment in front of KI Inc's CEO's home. The Securities Exchange Commission and the IRS begin an in-depth investigation of KI Inc's finances. Stock holders hold an emergency meeting and file lawsuits against the CEO and CFO of KI Inc. and declare bankruptcy. The CEO is hospitalized with third degree burns caused by OWS students who tried to tar and feather him while occupying his living room.

So you see, Kouak......there really would be an affect.

[Gloria]

Good point Gloria, trickle-down economics IS the same thing as trickle-up poverty. Flip sides of the same coin.

Excellent observation, Mark.

But what would like better?

Getting a little richer...(Trickle down)

or

Making everyone equally poor....(Trickle up Poverty)

????????

[Naturist Mark]

Excellent observation, Mark.

But what would like better?

Getting a little richer...(Trickle down)

or

Making everyone equally poor....(Trickle up Poverty)

????????

Oh, its not an either/or thing. When you implement 'trickle down' policies, the money does not trickle down, and the poor become poorer. The proof is that when top marginal tax rates are cut, income inequality increases and the share of national income going to those at the top increases. Trickle down IS Trickle up poverty.

But when you do the opposite - increase the top effective marginal tax rate, all boats are raised, the poor become less poor AND the rich become richer.

Trickle down under Reagan and the Bushes increased poverty, but a tiny increase in top marginal rates under Clinton resulted in the rich still getting richer AND a reduction in poverty.

[Kouak]

Let's say that Kouak Industries Inc. has a pension plan that is worth $20 million. Gloria Financial Inc. manages the fund and has done quite well by making shrewd investments, trading stocks at the right time and reinvesting dividends. The fund is paying out nice retirements but with GF Inc's management and contributions from KI Inc. the fund is actually growing. Suddenly dividends and capital gains are taxed at a higher rate........stock prices fall. GF Inc. must pass on additional taxes to the pension fund. The entire value of the fund begins to crumble. GF Inc notifies KI Inc. that their pension fund is now losing money and KI Inc's contributions will not meet the retirement payout obligations much longer. KI Inc. announces to all employees that pension benefits will no longer be available to new employees, retired employees will have their benefits reduced and employees who are currently enrolled in the pension plan must now contribute twice as much or drop the plan. Furious KI Inc. executives exercise their stock options causing a serious drop in KI Inc stock prices. Union employees begin violent strikes at KI Inc plants and Occupy Wall Street sets up a 5000 person encampment in front of KI Inc's CEO's home. The Securities Exchange Commission and the IRS begin an in-depth investigation of KI Inc's finances. Stock holders hold an emergency meeting and file lawsuits against the CEO and CFO of KI Inc. and declare bankruptcy. The CEO is hospitalized with third degree burns caused by OWS students who tried to tar and feather him while occupying his living room.

So you see, Kouak......there really would be an affect.

Hopefully Gloria Financial Inc. knows not to pay taxes on dividends or capital gains taxes on their sales. Wealth can accumulate tax free until the funds are cashed out and given to the recipient...who would pay the taxes.