When President Obama is re-elected!!

Bacchus · Post by **Bacchus** » Sat Jun 09, 2012 2:30 am

Sounds like you've got it JScott. Government takes care of payment. Doctors cannot ask patients for money. They always bill the government. At least this is the informing principle. There are always grey areas or areas of debate of course. Nonetheless, that's the guiding light, so to speak.

JimHow · Post by **JimHow** » Sat Jun 09, 2012 2:44 am

I thought the Clinton capital gains tax cuts didn't go into effect til like the end of the 1990s... AFTER the successful decade of the 1990s and at the beginning of the unsuccessful decade of the 2000s....

JScott · Post by **JScott** » Sat Jun 09, 2012 2:57 am

Not sure, Jim. Clinton isn't doing Barack any favors right now. He's way the hell too smart not to know what he's doing. I don't understand the motivation. Also, on the heels of a fairly miserable week, we have the news conference from hell, the sound bite we'll be hearing for five months. All it takes is a two second lapse. I wouldn't run for this office to save my life....

stefan · Post by **stefan** » Sat Jun 09, 2012 7:42 am

>>
Stefan, the Wiki data seems to be quite a bit different to me, by 100%!
>>

No, Scott. Wiki says that the top 1% paid 20% of their income in income tax, while the IRS says that the top 1% pay 40% of all income taxes. There is no inconsistency in these two figures.

I personally see no justification for taxing capital gains at a lower rate than other kinds of income, nor any convincing evidence that doing so retards economic growth any more than taxing earned income. A reason for taxing capital gains less is that investors take into account the tax rate when selling, so that taxes affect the market and a higher tax rate conceivably leads to lower tax revenues. However, our experience since the Bush tax changes suggests that this effect is not as great as one might guess it would be.

Bacchus · Post by **Bacchus** » Sat Jun 09, 2012 10:43 am

I've never even been convinced that taxation retards growth at all! At most, it seems to me, it redirects a part of the growth from the private/corporate sector and puts it in the control of the public/government sector. The government will spend those tax dollars and to that extent contribute to the nation's overall growth. In fact, I see taxation as essential to growth. The growth of the private/corporate sector will be hindered if infrastructure isn't maintained, or simply isn't there. At one time the Republican party used to understand that.

Bacchus · Post by **Bacchus** » Sat Jun 09, 2012 10:44 am

With Bill Clinton doing a number on Obama in past days, I can't help but wonder about the nature of the pillow talk these days between him and Hillary!?

JScott · Post by **JScott** » Sat Jun 09, 2012 11:14 am

Stefan, got it, my bad. I clearly completely misread your initial post. I'm not certain in all honesty what the effective tax rate is by decile currently but the last time looked it did rise with income by bracket, i.e. each higher group paid a higher effective rate than the one below.

Regarding capital gains, there are, in my view, quite a few reasons not to raise the capital gains rate. Chief among them, as I've said above, is that it will very likely be much more regressive than you think. The sentiment is to try to tax the truly wealthy, who I have described as vaulting out of the income tax system into a realm where their chief source of revenue isn't earned income. As David points out, they will almost certainly avoid the tax by modifying how the allocate their money (which is the reason this usually leads to lower revenue, not higher). On an individual level, those who will likely pay the tax are everyone else - pensions, 401K's, etc. Those hardest hit will be seniors and those on fixed incomes who also don't earn income but live on invested money. They rely on interest income typically, but rates are so low that many are now relying on dividends and capital gains. From an economic point of view, it will likely stunt growth as capital dries up, much the same way current banking regulation has dried up capital for the real estate market.

Also remember that when you tax capital gains you are taxing money that has already been taxed. Somewhere along the way, with exceptions being the minority, that money was earned as income or inherited, was taxed accordingly, and now is being saved and invested. You are effectively trying to take another bite from what was already taxed. Individuals in this category - Buffett, Gates, Bloomberg, Al Gore, John Kerry (who famously was revealed to have paid a 4% tax rate during the '00 campaign and now parks his yacht upstream to duck the taxes he says the rich should be paying), and of course the infamous Koch Brothers - are effectively living pension plans. They earned income somewhere (or in Kerry's case, married well!) and paid the taxes contemporaneously along the way.

To be clear, my point on this is not that those in this category should be exempt somehow and permitted to accumulate wealth to infinity - quite the opposite. Frankly I don't argue this on moral grounds but practical grounds. I have no animus towards this group (except the hypocrisy of some); as long as they made their money legally, within the rules, there is no reason to despise them and making them poor doesn't make me rich. Rather, they are clearly people who are good at accumulating wealth, and while it may be perfectly "fair" for them to do so, it is not a sustainable activity and will ultimately lead to a very unstable society. We are heading down that road, in my view. I just think we need to have another mechanism to address this, as yet unimplemented.

JScott · Post by **JScott** » Sat Jun 09, 2012 11:25 am

Bacchus, posts crossed. We are both clearly the early risers! Obviously, I have a different take on taxation. Your view is Keynesian, clearly, and I am more of the Austrian school. The assumption you make is that the government will allocate those resources efficiently and effectively, without waste and in the right direction. True, hardcore Keynesians will go so far as to say that where it's spent is irrelevant; throw it around anywhere and it does equivalent economic good. I believe this is demonstrably false. The whole green energy gambit from this administration (Solyndra, A123, Chevy Volt, etc.) demonstrates this in a microcosm. For better or worse, the private market has demonstrated itself to be by far the most efficient distributor of resources.

Regarding Clinton, I would've accepted one of these statements as a slip, loose talk, whatever. But several right in a row looks undeniably like strategy. He's coming back and offering apologies but he's way too smart for this to be accidental. I'm just trying to figure out the angle. Why would you not prefer Obama here rather than have Hillary run against an incumbent Romney in four years? Unless he thinks there's a chance of a last minute draft Hillary movement? That seems so far fetched I'm still searching for a motivation....

Bacchus · Post by **Bacchus** » Sat Jun 09, 2012 3:05 pm

Indeed, JScott, nothing like getting up bright and early on a Sat morning to take in a hot cup of coffee, read a magazine watch the birds on the feeders, all while the town is still still!

I can't believe anyone will try a last minute draft of Hillary. I think that would be disastrous for the Dems.

If Keynesian economics doesn't think it's important where or how government spends money, then I'm not a Keynesian. I've never advocated thoughtless or wasteful spending. I do not think the way government spends its money is irrelevant, and I do not think government should "throw it around." I also do not assume that government will spend money efficiently or effectively any more than I assume the private sector will take care of its financial house effectively either (does the year 2008 ring any bells?). Where spending is concerned, I think the public has to keep government's feet to the fire, so to speak. Government doesn't have to spend unwisely any more than it is inevitable that it will spend wisely. It's goal, however, should be to spend wisely, and the public has a right, IMO, to see how they're doing in that regard. So openness and transparency are important. I guess I look for balance between the private and public sectors. There are some areas where I think the private sector is the best or most efficient distributor of resources, but other areas where I think the public sector is the best (I'm strongly against privatizing the penal system, for example. No thought of it happening up here; I'm thinking of Arizona). I also think it's possible for both the public and private sectors to screw up, mess up and even go bad. So it's important that there be a number and variety of checks and balances in the system. The public should know what government is up to with its tax dollars, and government needs to be able to regulate the private sector. Sure, sometimes even that can go wrong. Government can get too top heavy, put too many regulations in place, waste money. But the private sector can get too greedy, affect too many lives in a negative fashion and without concern (big coal anyone), become too controlling, and define too many aspects of life in solely corporate terms. Too easy for them to loose a sense of the system that allows them to become wealthy too, and too easy for them to loose a sense of what it costs others for them to become wealthy. So, IMO, it comes down to checks and balances. The exact nature and extent of the checks and balances will no doubt need to vary from place to place, and time to time. I see this approach, by the way, primarily as practical not ideological.

JScott · Post by **JScott** » Sat Jun 09, 2012 4:25 pm

Bacchus, thoughtful and well worded reply. You are not a true Keynesian, either! Much of what you say I agree with. Privatizing the penal system is a spectacularly bad idea, for example. However, I will still disagree that government has even a modicum of efficiency, either in the economic sense or common usage sense. The debacle of '08 is in my view at least as much a failure of government as private enterprise (I'm sure I will get plenty of disagreement on this). First, it was government that created, pushed, and ultimately enforced the lending practices at the heart of all of it. Second, numerous warnings at Congressional committee meetings were ignored about what was unfolding years in advance of the collapse. Lastly, in a true free market, those companies that made those bad choices would have been permitted to fail, but the government chose to rescue them (I feel the knives coming -- be kind, gents!**). In short, what we witnessed was not the sole doing of a free market system but of government attempting to manipulate a free market, which is my point from the beginning. They aren't good at it.

**full disclaimer and disclose, before heads explode unnecessarily!

I am in no way condoning the behavior of many involved at Lehman and the others, and don't expect me to defend them as anything other than what they are. I'm only saying the bad behavior and utter lack of character and decency on display was facilitated by many in the government who have done their best to deflect any responsibility.

JScott · Post by **JScott** » Sat Jun 09, 2012 4:31 pm

Bacchus, regarding Hillary, if they were going to try to pull that off it needed to happen a long, long time ago. Unless, Obama fakes an illness of something! (I have this mental image of him falling to the ground at a press conference, grabbing his knee and waiving to the sideline.

) Bill's got an angle. It will be really interesting to see what he's tilting at. In the meanwhile, he's an unbelievable thorn for the administration. Rendell is weighing in, too. Very helpful.

In '08 I felt throughout the campaign that Team Obama was savvy, out front, cutting edge and always ahead of the news cycle. McCain seemed constantly on defense, playing catch up and horse and buggy next to a Ferrari. This time around, Obama's crew just seems in disarray and outflanked so far. Maybe they haven't gotten into gear yet or maybe they've had the luster beaten out of them over the past three years and they're just out of gas. As I said, I wouldn't take this job if you handed it to me.......

Tom In DC · Post by **Tom In DC** » Sat Jun 09, 2012 5:01 pm

When capital gains rates are low, people are more willing to "realize" those capital gains by selling appreciated assets and pay the tax. When the rates go up, folks forestall selling winners, waiting for lower rates or the inevitable "stepped up basis" at their death. The net tax revenue realized isn't guaranteed to be lower when capital gains rates are raised, but it has worked that way so far.

stefan · Post by **stefan** » Sat Jun 09, 2012 9:37 pm

Not always, Tom. Maybe a 20% rate produces more revenue than a 15% rate:

http://www.adamsmith.org/sites/default/ ... ns-tax.pdf

Actually, the date supports the thesis that to maximize revenue the government should periodically change the capital gains rate. When the rate is due to be raised, revenue increases dramatically. When the rate is lowered, revenue increases for a time. The effect has been noted, but I do not know if there are scholarly articles about it.

http://www.jstor.org/discover/10.2307/2 ... 0842711041

JScott · Post by **JScott** » Sun Jun 10, 2012 2:08 pm

Stefan, I think your thesis is probably correct, that the initial effect may well be that many attempt to front run the tax increase with a resulting increase in revenue. Or at least that makes logical sense to me, any way, though I have no evidence for it. But even then, it isn't the tax that raises the revenue, but the threat of the tax. All of the data that I've seen - including the link you provided - still seems to show that the tax itself lowers revenue.

Regarding the ideal rate, that "Adam Smith" piece quotes an OSU study that suggests the ideal rate is closer to 10%. (I was only able to see the first two paragraphs of the second link.) Regardless, I still have some concerns about who's actually paying the tax, as I mentioned above. I wonder if a better system to get at this notion of "over-accumulated wealth" (in the sense that such concentration leads to an unstable society) wouldn't be via the estate tax. My thought would be to craft legislation that would strongly encourage the super wealthy to give away their wealth during their lifetime, with only relatively limited amounts to other individuals and most going to charities or causes. That's still fraught with difficulties, deciding which charities are worthy, etc.

DavidG · Post by **DavidG** » Mon Jun 11, 2012 4:21 am

It gets even trickier when you try to define the cutoff for "rich." Here in MD, Gov. O'Malley wants to double the income tax on individuals making >$100,000, households making >$150,000.

Jay Winton · Post by **Jay Winton** » Mon Jun 11, 2012 1:10 pm

done deal David and back to January 1st so time to adjust your withholding. MD now ranks fourth of the most taxed states.

Bacchus · Post by **Bacchus** » Wed Jun 13, 2012 5:13 pm

With Obama's poll numbers struggling, and Bill seemingly sabotaging the cause, here's an interesting analysis:
http://www.rollingstone.com/politics/bl ... s-20120612

JScott · Post by **JScott** » Fri Jun 15, 2012 12:16 pm

David and Jay, on the upside, a third of MD will be happy to know they've become part of the 1%! I've personally never felt that retroactive taxation was straight pool, but apparently it's passed legal muster.

Bacchus, interesting article and analysis, but I cringe whenever I see the conclusion that the overriding explanation for losing is that the other side cheated. That said, I have no doubt cheating took place - on both sides. Always does, sadly. The solution isn't to become a better cheater than your adversary; the solution is to work to eliminate the avenues for cheating (good luck!) and ultimately to win by so much it can't be stolen from you. If they lost a third of the union vote they need to take a little deeper look....

JScott · Post by **JScott** » Fri Jun 15, 2012 12:21 pm

I read another analysis (and I forget where now so I don't have a link) that the Clinton strategy has more to do with cycles than opponents. The idea is that the public tends to get weary of either side after a while and tends not to permit more than two or three consecutive terms. I guess they figure the mood is more likely to go Democrat in '16 if everyone gets another brief taste of Republican.

So is Monday the day?

Bacchus · Post by **Bacchus** » Mon Jun 18, 2012 6:27 pm

Looks like you live in a relatively sane place, Jim. What's going on there?

Maine: Romney vs. Obama WBUR/MassINC Obama 48, Romney 34 Obama +14

JimHow · Post by **JimHow** » Mon Jun 18, 2012 6:37 pm

I've said a million times, Maine is the greatest place on Earth.
I don't know if you saw a couple weeks ago Maine was deemed to be the "least religious" state in the country.
The northern Congrsssional district in Maine is somewhat more conservative that the southern district, however, which could possibly be a problem because Maine is one of two states (Nebraska being the other) that splits its electoral votes by Congressional district. There is actually a scenario where Obama and Romney could tie at 269-269 each, and that's if the unlikely but not impossible scenario occurs that Maine divides its 4 votes by giving 3 to Obama and 1 to Romney. this would result in a victory for Romney, of course, because a tie would go to the Republican controlled House of Representatives. (I believe that would be the newly elected House, and not the lame duck House.)

Bacchus · Post by **Bacchus** » Mon Jun 18, 2012 9:16 pm

All that non-religious, progressive thinking -- no doubt due to the fact that so much of the state borders on Canada!

JimHow · Post by **JimHow** » Mon Jun 18, 2012 9:47 pm

OFFICIAL SONG OF THE STATE OF MAINE

State of Maine Song
Written by Roger Vinton Snow
Composed by Roger Vinton Snow

Grand State of Maine, proudly we sing
To tell your glories to the land
To shout your praises till the echoes ring
Should fate unkind send us to roam
The scent of the fragrant pines,
The tang of the salty sea will call us home.

Oh, Pine Tree State
Your woods, fields and hills
Your lakes, streams and rockbound coast
Will ever fill our hearts with thrills
And tho' we seek far and wide
Our search will be in vain
To find a fairer spot on earth
Than Maine! Maine! Maine!

Bacchus · Post by **Bacchus** » Tue Jun 19, 2012 6:09 pm

Looks like Marco Rubio is off Romney's list of potential VPs! If so, who then becomes the most likely candidate?

JimHow · Post by **JimHow** » Tue Jun 19, 2012 6:30 pm

Saw that. He's just too young. If Romney were smart, he'd pick Jeb. If you didn't see Jeb's interview with Charlie Rose last week, you should check it out, I'm sure it must be on YouTube. Brilliant guy. Why can't there be more Republicans like Jeb Bush? (Heck, or like John McCain's daughter, even.) I mean, I would never vote for him, but he's at least got a little rationality in him!

stefan · Post by **stefan** » Tue Jun 19, 2012 9:35 pm

Jeb has been accused of possessing something that his brother Dubya was never suspected of having; i.e, a three digit IQ.

JScott · Post by **JScott** » Tue Jun 19, 2012 10:03 pm

Jeb does have poise and presence but I still don't know if this pick makes sense outside of Florida. Don't you think the country's a little "Bush-ed out" at this point? If I'm Obama I'd love this pick - perfect fodder to paint him as trying to resurrect Bush policy, which is their number one theme.

I assume we're basing this on the ABC report that Rubio's not been vetted? Not sure how much I trust that report. I still think he's in play along with the rest of them, and I still think he's the pick if Team Romney thinks they're behind. Early reports had him announcing well ahead of the convention; now I'm not so sure.

DavidG · Post by **DavidG** » Tue Jun 19, 2012 10:30 pm

I'm still betting on Rob Portman. Again - "nobody votes for VP" but MAYBE a favorite son can make a difference if it's close, and Ohio is a key state. Can anyone say "LBJ?"

JScott · Post by **JScott** » Tue Jun 19, 2012 10:52 pm

Romney has come out today saying that the ABC report is false, that Rubio is absolutely being vetted. Who the hell knows?

David, Portman is as good a bet as anyone. Probably the frontrunner.

JimHow · Post by **JimHow** » Tue Jun 19, 2012 11:31 pm

Since he who wins Ohio wins the presidency, Portman has definitely got to be a favorite.
ABC said tonight that Pawlenty might be the frontrunner.
Don'r rule out Jeb, he's not like his brother. He's actually very impressive. Plus, old man Bush is popular, I think Jeb is more like the old man than like his brother.
I saw Rubio do a fairly extensive interview yesterday. I can't decide whether he lacks depth or maturity or both, but there seems to be something just a tad missing.

Bacchus · Post by **Bacchus** » Wed Jun 20, 2012 12:24 am

Any hope for the governor of New Jersey?

JimHow · Post by **JimHow** » Wed Jun 20, 2012 12:47 am

I would not think they would go with two governors from northeastern liberal states.

Bacchus · Post by **Bacchus** » Wed Jun 20, 2012 6:06 pm

But I thought Mitt comes from La Jolla, CA.

This poll is surely an outlier, but it's a happy outlier nonetheless:
http://www.bloomberg.com/news/2012-06-2 ... touch.html

JimHow · Post by **JimHow** » Sat Jun 30, 2012 12:54 am

So... The historic Supreme Court decision....

A good thing for Obama's reelection chances, or a negative?

JimHow · Post by **JimHow** » Sat Jun 30, 2012 12:54 am

I say: A net positive.

JimHow · Post by **JimHow** » Sat Jun 30, 2012 2:24 am

Is the Tea Party a myth?

Do any of you know anyone who is a "member" of the Tea Party?

I don't.

I think the whole idea of the Tea Party is a myth.

I know that conservative candidates won in 2010, but I believe that was more of an economy thing than any great "Tea Party" <rolls eyes> thing.

DavidG · Post by **DavidG** » Sat Jun 30, 2012 4:07 am

JimHow wrote:So... The historic Supreme Court decision....

A good thing for Obama's reelection chances, or a negative?

It's the economy that will determined the outcome. And while healthcare is an important economic factor it doesn't get played that way in the media. Instead it's played as a "freedom" issue. What a joke. We're headed towards the falls in a barrel but we're so busy screaming at each other over which side to paddle on we don't see it coming.

robertgoulet · Post by **robertgoulet** » Sat Jun 30, 2012 4:28 am

I have to assume Romney will pick someone who will effect the outcome in a key swing state

Bacchus · Post by **Bacchus** » Sat Jun 30, 2012 8:32 am

General Election: Romney vs. Obama Newsweek/Daily Beast Obama 47, Romney 44 Obama +3
General Election: Romney vs. Obama Gallup Tracking Obama 48, Romney 43 Obama +5
General Election: Romney vs. Obama Rasmussen Tracking Obama 45, Romney 44 Obama +1
General Election: Romney vs. Obama Democracy Corps (D) Obama 49, Romney 46 Obama +3
General Election: Romney vs. Obama FOX News Obama 45, Romney 40 Obama +5
General Election: Romney vs. Obama NBC News/Wall St. Jrnl Obama 47, Romney 44 Obama +3

Michigan: Romney vs. Obama NBC News/Marist Obama 47, Romney 43 Obama +4
North Carolina: Romney vs. Obama NBC News/Marist Romney 44, Obama 46 Obama +2
Florida: Romney vs. Obama Quinnipiac Obama 45, Romney 41 Obama +4
Ohio: Romney vs. Obama Quinnipiac Obama 47, Romney 38 Obama +9
Pennsylvania: Romney vs. Obama Quinnipiac Obama 45, Romney 39 Obama +6
Ohio: Romney vs. Obama PPP (D) Obama 47, Romney 44 Obama +3
Colorado: Romney vs. Obama WeAskAmerica Obama 47, Romney 43 Obama +4
Virginia: Romney vs. Obama Virginian-Pilot/ODU Obama 49, Romney 42 Obama +7

JScott · Post by **JScott** » Sat Jun 30, 2012 3:36 pm

Agree with David -- it's still the economy stupid. The Right will try to make some hay out of the mandate being formally christened as a tax. There may be some points scored that way, most notably with Obama's "read my lips" moments, but the truth is most people already had a notion of what the mandate was and I doubt many minds will be changed by calling it a tax now. I actually believe Obama would've been in the best place politically if the mandate had been struck down and the rest left (the outcome I expected). His problem is that ACA still polls poorly and now it's his completely to own, along with virtually every Congressional Democrat. I think it's a net negative for all of them unless they can convince people to fall in love with it over the next few months.

I have honestly thought from the beginning it was a truly crappy piece of legislation. Whether you favor universal coverage or a fully private system, there's something in it for everyone to hate. It takes the worst elements of each system and combines them into an incoherent mess. It will not bring down costs - costs will skyrocket (the CBO re-scored it a few months ago as adding $1.5T to the debt because of the backloaded accounting initially). The argument often made, rightly so, is that those without insurance still access the system sporadically and the costs are shifted to those with insurance, costing up to $1,000 additional per insured individual. The uninsured are by far either those who can't afford a policy or those denied with pre-existing conditions who utilize lots of care, with a much smaller healthy segment simply choosing not to buy insurance. Formally putting a card in their hands doesn't make their care free; they still can't pay for their care and others will still pay the difference, and it won't remotely be offset by forcing healthy non-utilizers to opt in. They will likely access the system quite a bit more. The additional regulatory stuff is a full on nightmare - I'm already seeing it. The only way this could be viewed as a positive is as a painful, ugly step toward universal coverage, if you believe that is a worthy goal, but that still polls poorly, too. Most people will truly hate this new system, I think, and I'm already seeing that, too.

The additional problem will be the way Medicaid is handled. In one scenario many states opt out and the number of uninsured is still very high. Even if they play ball, states will have to pay for the additional surge and taxes and levies will surge at the state level, likely not a welcome development in this economy. Despite all of it, many with Medicaid will still not have access to general care because the reimbursement structure is so poor. Those folks will have a card in their hand and very few will accept it. They will effectively still have trouble getting seen and will still end up with catastrophic visits to the ER.

Regarding the Tea Party, it is very real. I think those of you on the coasts don't see it as much. I also think there are many who are sympathetic with the agenda but prefer not to label themselves as part of the group. I still believe it will be a major factor in November, and, again ominously for Obama, many who previously had a "throw the bums out" philosophy will now pragmatically fall in line with Romney and the GOP as a result of this decision. If it had largely been struck down, we may have seen third party effects.