Warran Buffett Comes Out Against Current Tax System

Warren Buffett wanted to illustrate how lopsided our tax system is, so to prove his point he compared his tax rate to that of his employees.  He polled his office and 15 out of 18 people participated.  The finding was that his total tax rate including payroll and income tax was 17.7%.  The average for his employees was 32.9%.  The interview is about 5 minutes long and well worth the time. 

The GOP's Strategy: Starve the Beast

"Starve the Beast" is a political strategy of Conservatives to create or increase budget deficits through tax cuts to force future reductions in the size of government; government reduction by revenue reduction (tax cuts). Example is the tax cuts of President Bush's administration. 


Presidencies since WWII and percentage of debt to GDP. All red numbers are under Republican presidents:



Conservatives Grover Norquist and Milton Friedman have both advocated tax cuts to bankrupt America in order to keep down government spending beneficial to the lower economic classes. In The Fiscal Times Bruce Bartlett summarized Bush's use of the STB doctrine.

Bush inherited a budget surplus of 1.3 percent of the gross domestic product from Bill Clinton in fiscal year 2001. When Bush took office in January 2001, we were already well into fiscal year 2001, which began on Oct. 1, 2000. He immediately pushed for a huge tax cut, which Congress enacted. In 2002 and 2003, Bush demanded still more tax cuts, even as the economy showed no signs of having been stimulated by his previous tax cuts.

The tax cuts and the slow economy caused revenues to evaporate. By 2004, they were down to 16.1 percent of GDP. The postwar average is about 18.5 percent of GDP. Spending did not fall in response to the STB decimation of federal revenues; in fact, spending rose from 18.2 percent of GDP in 2001 to 19.6 percent in 2004, and would continue to rise to 20.7 percent of GDP in 2008.

GOP's goal is to create such a fiscal disaster that government is forced to end social programs that the less fortunate and middle and lower classes depend on.  It is unfathomable that this is the same party that uses their Christian values as a reason they should be elected.

The Shrinking Republican Party

Since the 2010 election, unions have been under a steady attack by the far right leaning, newly elected governors and state representatives. It has turned out to be the best thing to happen to labor in decades.

The Tea Party supported GOP have drawn a stark contrast to the middle of the road Republicans.  Within their first 120 days, with a laser focus on unions, they have worked to diminish worker's rights and cut their benefits and also cut funding for education while handing out millions in tax cuts to corporations.

The consequence has been these middle of the road conservatives are now switching parties in growing numbers. Garrett Lamp, a lifelong Republican from Florida, recently told the Huffington Post,

As a public safety employee, as a fireman, as a father of three children and my sister has a special needs child, I'm fed up with the ridiculous cuts that are being made right and left. It's almost like the Republicans are in a feeding frenzy, decimating working-class families. You can't do away with taxes for corporations and put it on the backs of middle-class working people, and that's what they're doing.

If you're the CEO of a large company, you should help the people who helped you become the CEO of a successful company, saying closing loopholes for CEOs shouldn't be a partisan issue. How many millions and billions do people need to make, while the standard of living and the average income for the hardworking men and women who put their company in that position is dropping every day?

By the GOP blaming the public sector unions on the fiscal crisis and our current economic problems, they are having the unintentional effect of driving away the Reagan Democrats that moved to their party over the previous decades. They are increasingly becoming a party for the wealthy white and evangelical Christians, which will undoubtedly shrink their size.

BofA Says Not to Think of Your Home as an Asset

Bank of America CEO, Brian Moynihan , said on Tuesday at the 2011 National Association of Attorneys General conference that homeowners need to look elsewhere for long-term investments rather than their home due to slow growth in population in certain areas.

"It's sobering to think, but some people shouldn't be thinking of (their home) as an asset. They should be thinking of it as a great place to live."

Mr. Moynihan cited the situation of an Ohio customer who complained that his 100-year-old home was valued at $50,000. Mr. Moynihan said it would be valued as "some multiples of that figure" if located elsewhere, but due to population levels that have remained unchanged, the demand for homes in that state are low, which in turn drives down home prices.

Joe Rauch reported many attorneys general attended and are in the process of negotiating with BofA and other lenders about a settlement to allegations that the industry cut corners on foreclosures.

Why Taxing Corporations and Wealthy Can Fix our Economy

It has been said that our country is broke, hence the need to cut entitlements that, lets face it, help the lower and middle classes. A recent study by The Institute for Policy Studies released in April this year showed that our country actually is not broke. It lists two reasons why.

One, we have indeed become wealthier than ever. But our wealth has become incredibly more concentrated at our economic summit. U.S. income is cascading disproportionately to the top.

Two, we are taxing the dollars that go to our ever-richer rich — and the corporations they own — at levels far below the tax rates that America levied just a few decades ago. We have, in effect, shifted our tax burden off the shoulders of those most able to bear it and away from those who disproportionately benefit from government investments the most.

Since there are more dollars at the top and the taxes collected on these dollars are at record low levels, this has caused a fiscal tsunami. This report offers both an analysis of our current predicament and a series of proposals that can help open our eyes to a far more equitable — and brighter — future.

Key Tax Facts

• 15,753: The number of households in 1961 with $1 million in taxable income (adjusted for inflation).

• 361,000: The number of households in 2011 estimated to have $1 million in taxable income. The number of households in 2011 estimated to have $1 million in taxable income.

• 43.1: Percent of total reported income that Americans earning $1 million paid in taxes in 1961 (adjusted for 2011 dollars) Percent of total reported income that Americans earning $1 million paid in taxes in 1961 (adjusted for 2011 dollars) .

• 23.1: Percent of total reported income that Americans earning $1 million are likely to pay in taxes in 2011, estimated from latest IRS data. Percent of total reported income that Americans earning $1 million are likely to pay in taxes in 2011, estimated from latest IRS data.

• 47.4: Percent of profits corporations paid in taxes in 1961. Percent of profits corporations paid in taxes in 1961. The number of households in 1961 with $1 million in taxable income (adjusted for inflation). 

• 11.1: Percent of profits corporations paid in taxes in 2011.

GOP: A Party of Homophobes

Alan Simpson, former Senator of Wyoming, was interviewed by Chris Matthews on Monday and took on his own party and their stance on both abortion and gay and lesbian issues. 

On abortion, he said male legislators shouldn't even vote on the issue because it is an "intimate and personal decision" that a woman makes.  On gays and lesbians, he said he isn't "sticking with people who are homophobic and anti-women, moral values." 

Thank goodness there is a Republican with some common sense.