http://www.moneynews.com/St...al&promo_code=A061-1

quote Tax hikes expected to hit after the expiration of the Bush tax cuts will cause today's corporate profits to tumble next year — probably right after a stock market collapse, says economist Arthur Laffer, chairman of Laffer Associates and inventor of the Laffer Curve. “My best guess is that the train goes off the tracks and we get our worst nightmare of a severe 'double dip' recession,” Laffer says. Laffer warns of these coming tax hikes: • the highest federal personal income tax rate will go to 39.6 percent from 35 percent; • the highest federal dividend tax rate pops up to 39.6 percent from 15 percent; • the capital gains tax rate will hit 20 percent from 15 percent; • the estate tax rate soars to 55 percent from zero. “Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts,” he wrote in the Wall Street Journal. “Tax rate increases next year are everywhere.” Laffer says the coming hikes — coupled with the prospect of rising prices, higher interest rates and more regulations next year — are causing businesses to shift production and income from 2011 to 2010 to the greatest extent possible. “As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be,” Laffer says. "It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates,” he says. "Likewise, who is gobsmacked when they are told that the two wealthiest Americans — Bill Gates and Warren Buffett — hold the bulk of their wealth in the nontaxed form of unrealized capital gains?" Laffer notes that, according to a 2004 U.S. Treasury report, high income taxpayers accelerated the receipt of wages and year-end bonuses from 1993 to 1992 — more than $15 billion — in order to avoid the effects of the anticipated increase in the top rate from 31 percent to 39.6 percent. At the end of 1993, taxpayers shifted wages and bonuses yet again to avoid the increase in Medicare taxes that went into effect beginning 1994. Reagan's delayed tax cuts, Laffer observes — which were passed under the Economic Recovery Tax Act in 1981 but didn’t take effect until 1983 — were the mirror image of President Barack Obama's delayed tax rate increases. “For 1981 and 1982 people deferred so much economic activity that real GDP was basically flat (i.e., no growth), and the unemployment rate rose to well over 10 percent,” he points out. However, in 1983, the economy took off like a rocket, with average real growth reaching 7.5 percent in 1983 and 5.5 percent in 1984. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011. In 2010, Laffer points out, people can cash in their Individual Retirement Accounts (IRAs), Keough deferred income accounts and 401(k) deferred income accounts without prepayment penalties. After paying their taxes, these deferred income accounts can be rolled into Roth IRAs that provide after-tax income to their owners into the future. The result will be a crash in tax receipts once the surge is past, Laffer says. "Incentives matter," Laffer says. “If you thought deficits and unemployment have been bad lately, you ain't seen nothing yet,” adding that if the government taxes people who work and pays people not to work, the result will be that fewer people will work. According to a survey from the National Association for the Self-Employed, businesses will experience a 1,250 percent increase in the amount of tax-related paperwork required of small-business owners come 2012, making economic progress even more difficult. "To the mom and pop shop, time is money, and this new regulation is going to require plenty of both," NASE Kristie Arslan told the Earth Times. "The bottom line is that the Form 1099 expanded reporting requirement affects companies small and large, increasing the number of forms issued and received many times over."

Roubini: US Nears Disaster as Euro Zone Faces Zero Growth
http://www.moneynews.com/St...al&promo_code=A061-1

quote The euro zone is facing a period of zero growth if not recession, and the United States is heading for financial trouble, U.S. economist Nouriel Roubini was quoted as saying. There was a risk of renewed recession in Europe, Roubini said in an interview with Swiss daily Tages-Anzeiger. "There is that risk, at least for the euro zone. Growth will fall toward zero. Even if that is perhaps not a real recession, it will feel like one. Greece was just the tip of the iceberg," he said. "And the Americans too will run into the wall at some point if the carry on the way they are," he said in the interview published in German. Roubini, known as Dr. Doom and best known for predicting the U.S. housing crisis, said there was a risk of a second financial crisis, with countries becoming insolvent and being forced out of the euro, and banks collapsing. Countries such as Spain and Greece were now under pressure to cut spending and raise taxes to retain access to the capital markets, even though they had no growth to speak of. If governments implement austerity measures too soon they risk snuffing out demand and recovery, but delays could provoke a catastrophe with high interest burdens and inflation. "You're damned if you save and you're damned if you don't," he said. Roubini said it was "possible to square this circle" if governments committed to a credible medium-term plan to restore their budgets. But such policies, which carry the risk of a deflationary recession, must be compensated for with a loose pan-European monetary policy to stimulate demand. Any resulting further decline in the euro would make European exports more competitive and allow Germany to raise wages and purchasing power at home to stimulate exports from other euro zone countries, he said. Roubini said that a Japanese-style period of deflation, stagnation and high unemployment was a much greater risk to Europe for the next two or three years than inflation.

yes, the economy will collapse - but not from that BS

it is due to the simple fact that the USA spends more than it makes

we've already seen how effective all the above crap has been for the last 10-15 years as we decided Asia should be the new world power

nice try tho

I've been writing about the tax increases for at least a year or so, surprised that Polesi hasn't repealed the Bush tax cuts and made it retroactive to the beginning of this year yet.
Now is the time to pay the taxes and move your standard IRA into a Roth IRA. This is the first year and possibly the last that you can do this. I'm taking advantage of this because I really don't expect the government to lower taxes.

I didn't know you could move 401K to a Roth without penalty this year. I'm going to do that with the quickness.

Can't be. Obama promised taxes wouldn't increase.

quote Originally posted by Wichita: I didn't know you could move 401K to a Roth without penalty this year. I'm going to do that with the quickness.

This depends on your plan, because my understanding is that this isn't an option with my 401k plan. I looked into it a year ago with a financial planner and it was no go. Most plans will require you stay in the game, only out is early withdrawl which carries stiff penalties. This is the way I know it, is there something I don't know?

[This message has been edited by ditch (edited 06-08-2010).]

this is the same Laffer as the VOODOO curve
and we know how well that DIDNOT WORK

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Question wonder and be wierd
are you kind?

quote Originally posted by Wichita: I didn't know you could move 401K to a Roth without penalty this year. I'm going to do that with the quickness.

Double check on the 401K part with you tax advisor. I'm in the process of transfering my standard IRA into the Roth, I looked into doing the same with my 401K and, like ditch, it was a no go. There is alot of control on those company sponsored 401K programs.

Matter of fact, I attempted to get a withdrawl in late 2009 out of my 401K *and* pay the 10% penalty on top of the taxes but was totally shot down. I crunched the numbers and found that I would come out ahead of 2011 tax rates on a limited withdrawl as long as I stayed in my current tax bracket. Not only was I totally shot down but also told to shut up, they didn't want trouble with every employee in the company asking about this.

With the government spending like no tomorrow, taxes have got nowhere to go but up, in my opinion. This Roth IRA may be a nice hedge on taxes unless the government re-nigs on their promise not to tax it.

The government still doesn't tax you on off-shore accounts under 10,000 aggregate, property in foriegn countries or those little silver coins in the bottom of your sock drawer but give them time, some congressman will put a tax on it.

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jetman
Silver 86 SE 2M6 4-speed, with "check wallet light"
Now fortified with 8 essential slices of bacon goodness

The popular idea of increasing taxes on the rich to get a predictable increase in revenue doesn’t work too well in practice as Oregon recently found out. According to the Tax Foundation:

quote High-income people have much more volatile income than middle-income wage-earners, largely because capital gains and business income are sensitive to changes in the economy and fluctuate rapidly. Relying too heavily on these sources of income for tax revenue leads to unpredictability in tax revenues in the long run, with revenues surging in good economic times and plunging in bad. Increasing the progressivity of a state's tax system will exaggerate these effects, and states need to consider this when evaluating their fiscal situations

Oregon (tied with Hawaii for the highest income tax rate) has proven the Tax Foundation's point. The State made an income tax increase on high-income people retroactive to the previous tax year to prevent income shifting. But the targeted group knew the increase was a possibility and made adjustments before that. This in turn lessened revenue in the current fiscal year and made matters worse. (High-income people pay the majority of Oregon income taxes).

Again from the Tax Foundation:

quote When deciding in which state to live or locate their business, one of the factors that top earners must weigh is the marginal tax rate they will face in each state. While high statutory tax rates on high incomes may bring a revenue increase in the short term, they can harm long-term economic growth as providers of jobs and capital choose to locate in lower tax states.

And Laffler points out:

quote It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates.

Progressive taxation of income is very popular and the majority of Oregon voters thought it was a great idea to let the rich cover a revenue shortfall. It didn’t work out as expected.

quote Originally posted by ray b: this is the same Laffer as the VOODOO curve and we know how well that DIDNOT WORK

The Laffer Curve was proven right and is taught in economic courses as a truism. It's just the government doesn't listen.

See also the Economy Watch thread.

mr lol curve looks to me to get max results at the center point
exactly at 1/2 way or 50% total tax rate

so why did the neo-conned reduce the rate below 50% way below 50%
to 28% under raygun and down from 39% under clintons projected surplus to 35% under BuSh2

and also want unearned capital gains be taxed at the super low 15% rate

the curve is just a model and a FAILED MODEL at that
we tryed it it failed
when raygun and bush1 cut taxes the deficit grew
and the same happened under rerun BuSh2's tax cuts
less tax rates = less tax income to the feds

yes I get the idea that too high a tax rate can produce less collections
and agree a cut from the WW2 rate of 90% can and did produce more collections
but the CURVE shows under 50% tax rate cuts PRODUCE LESS INCOME
so I guess the question is why do not you support your own CURVE DATA
and real world results clearly show that cutting taxes below 50%
cuts income and raised the deficit
only clinton's tax INCREASE raised funding to a point where there was a surplus
20 years of neo-conned leadership had NOT ONE SURPLUS

quote Originally posted by ray b: mr lol curve looks to me to get max results at the center point exactly at 1/2 way or 50% total tax rate so why did the neo-conned reduce the rate below 50% way below 50% to 28% under raygun and down from 39% under clintons projected surplus to 35% under BuSh2 and also want unearned capital gains be taxed at the super low 15% rate the curve is just a model and a FAILED MODEL at that we tryed it it failed when raygun and bush1 cut taxes the deficit grew and the same happened under rerun BuSh2's tax cuts less tax rates = less tax income to the feds yes I get the idea that too high a tax rate can produce less collections and agree a cut from the WW2 rate of 90% can and did produce more collections but the CURVE shows under 50% tax rate cuts PRODUCE LESS INCOME so I guess the question is why do not you support your own CURVE DATA and real world results clearly show that cutting taxes below 50% cuts income and raised the deficit only clinton's tax INCREASE raised funding to a point where there was a surplus 20 years of neo-conned leadership had NOT ONE SURPLUS

The problem wasn't the tax rate not producing enough income. It was that they failed to reduce spending. The tax rate isn't the whole answer. Spending must be brought in line, or the tax rate is almost irrelevant.

[This message has been edited by fierobear (edited 06-09-2010).]

Anybody notice that Ray is uncritically quoting George H.W. Bush as an authority on economic theory? (Can any one check the temp of hell for me?)

George Bush is the guy who dubbed supply-side economics "Voodoo economics". As a moderate Republican, Bush didn't think the idea of cutting taxes to stimulate the economy would work. He was wrong; the Reagan tax cuts led to the largest peacetime economic expansion in US history.

John F. Kennedy was a big believer in the Laffer curve before the thing even existed.

Ed

Having a deficit is not necessarily a bad thing, but of course it is way out of control today. I think we should spend less energy discussing tax rates and more focusing on the root cause of our problem...government spending.

Hell with tax increases. If I overextend myself and am forced into foreclosure, I can't go to my employer and demand a higher salary to get myself out of it. I would have to adjust my spending habits and live within my means. The government should be no different: don't come to me for more tax money, learn how to balance a checkbook, dumbass.

[This message has been edited by ditch (edited 06-09-2010).]

quote Originally posted by Wichita: The Laffer Curve was proven right and is taught in economic courses as a truism. It's just the government doesn't listen.

so why did the economy fail?
because it is BS
just because the Laffer Curve is a favorite flavor of Kool-Aid for some, and served regularly - does not make it true

take that "Laffer Curve" for the last 10-20 years, and also graph the income of the top 20% vs everyone else - and you'll see the actual truth.

quote Originally posted by ditch: The government should be no different: don't come to me for more tax money, learn how to balance a checkbook, dumbass.

That's really it in a nutshell, put succinctly.

Oh, and someone needs to figure out a way to explain to rayb and pyrthian that just because you repeat the same bullshit over and over again, it doesn't make it true.

[This message has been edited by fierobear (edited 06-09-2010).]

quote Originally posted by ditch: The government should be no different: don't come to me for more tax money, learn how to balance a checkbook, dumbass.

I can't remember but didn't we have a ballanced budget ammendment at some time?

quote Originally posted by Pyrthian: so why did the economy fail? because it is BS just because the Laffer Curve is a favorite flavor of Kool-Aid for some, and served regularly - does not make it true take that "Laffer Curve" for the last 10-20 years, and also graph the income of the top 20% vs everyone else - and you'll see the actual truth.

What are you talking about? You mean the rich get richer because their tax rate decreased yet the rich pay more in the percentage of overall taxes every year.

That is a the classic Laffer Curve.

Raise taxes on everybody and see what happens.

quote Originally posted by Wichita: What are you talking about? You mean the rich get richer because their tax rate decreased yet the rich pay more in the percentage of overall taxes every year. That is a the classic Laffer Curve. Raise taxes on everybody and see what happens.

so - crashing the economy is the point of the Laffer Curve? funny stuff.

quote Originally posted by Pyrthian: so - crashing the economy is the point of the Laffer Curve? funny stuff.

So your theory is that the economy collasped because tax rates were too low and the government couldn't collect enough money from rich folks.

FAIL

Try again.

quote Originally posted by Wichita: So your theory is that the economy collasped because tax rates were too low and the government couldn't collect enough money from rich folks. FAIL Try again.

no the market crash was NOT tax related
but was a result of the other neo-conned coolaid
the idea that '' the markets know best''
your basic ann rand coolaid of hands off the markets

so both major flavors of neo-conned coolaid FAIL
tax cuts even on the LOL CURVE under 50% produce red ink only
and market deregulation produce depressions
time to try another flavor coolaid

Make my Koolaid constitution flavored.

quote Originally posted by Pyrthian: yes, the economy will collapse - but not from that BS it is due to the simple fact that the USA spends more than it makes we've already seen how effective all the above crap has been for the last 10-15 years as we decided Asia should be the new world power nice try tho

High taxes will make it that much worse.

[This message has been edited by Nurb432 (edited 06-09-2010).]

I want the cheap kool-aid (read: massive reductions in government spending). without that, as has been stated, tax rates mean NOTHING! I don't care what the tax rates are, if the government keeps spending more than it takes in, the economy will collapse. Only by reigning in Gov't spending, can an economic collapse be averted. PERIOD.

quote Originally posted by Rallaster: I want the cheap kool-aid (read: massive reductions in government spending). without that, as has been stated, tax rates mean NOTHING! I don't care what the tax rates are, if the government keeps spending more than it takes in, the economy will collapse. Only by reigning in Gov't spending, can an economic collapse be averted. PERIOD.

Diet Kool-Aid?

quote Originally posted by maryjane: Can't be. Obama promised taxes wouldn't increase.

Now when has a politition ever told the truth.. thats like saying a fiero will never leave you stranded.

quote Originally posted by Nurb432: Diet Kool-Aid?

In the leftists' case, it's more like a steady diet of kool-aid.

So who has a proposal to fix the debt crisis? You can cut all government and you'd still have a massive debt. (question is not directed at either side being right or wrong just an honest question)

quote Originally posted by ray b: no the market crash was NOT tax related but was a result of the other neo-conned coolaid the idea that '' the markets know best'' your basic ann rand coolaid of hands off the markets so both major flavors of neo-conned coolaid FAIL tax cuts even on the LOL CURVE under 50% produce red ink only and market deregulation produce depressions time to try another flavor coolaid

Actually the economy crashed in one industry. The Mortgage industry, where it is the most regulated, government intruded and planned and government owned portion of our society more than any other industry.

Government, Fail! Central Planning, Fail!

Your side is the cause, and since your side cannot accept the accountability of your huge failure it bests to find a scapegoat to send your sins into for sacrifice of saving face.

If they let the markets alone the economy wouldn't have crashed.

quote Originally posted by newf: So who has a proposal to fix the debt crisis? You can cut all government and you'd still have a massive debt. (question is not directed at either side being right or wrong just an honest question)

Keeping taxes and interest rates low will be a good start. Give small businesses extra breaks so they can afford to hire more people ( and no, not some joke $5000 bonus.. real substantial breaks. ).

Government can still be around to keep an eye on people to prevent taking advantage of things, but they need to get out of the way.

quote Originally posted by Nurb432: Keeping taxes and interest rates low will be a good start. Give small businesses extra breaks so they can afford to hire more people ( and no, not some joke $5000 bonus.. real substantial breaks. ). Government can still be around to keep an eye on people to prevent taking advantage of things, but they need to get out of the way.

HA! Thats a joke. Have you looked at Medicare/aide or SS lately? They can't keep people from taking advantage of a system THEY OWN! Regulating someone else's system is completely out of the question.

quote Originally posted by Rallaster: HA! Thats a joke. Have you looked at Medicare/aide or SS lately? They can't keep people from taking advantage of a system THEY OWN! Regulating someone else's system is completely out of the question.

You think fraud, abuse and waste is bad with SS/Medi, wait until Obama Care kicks in.

quote Originally posted by Wichita: You think fraud, abuse and waste is bad with SS/Medi, wait until Obama Care kicks in.

Oh yeah, I have no doubt it's going to take it to a whole new level.

That's right, but if we QUIT ADDING TO IT over time, it will be reduced and eventually paid off. If we keep adding to it it will never be paid off.

John Stricker

quote Originally posted by newf: So who has a proposal to fix the debt crisis? You can cut all government and you'd still have a massive debt. (question is not directed at either side being right or wrong just an honest question)

funny how the low tax supporters
who under the BuSh2's tax cuts
never said a peep about debts
or the un-necessary war off budget debt
or in 20 years of whitehouse budgets never had one in balance

now see debt as a BIG DEAL

quote Originally posted by ray b: funny how the low tax supporters who under the BuSh2's tax cuts never said a peep about debts or the un-necessary war off budget debt or in 20 years of whitehouse budgets never had one in balance now see debt as a BIG DEAL

yup.
maybe some of these "fiscal conservatives" should actually look at some truths, and not their emotions

quote Originally posted by ray b: funny how the low tax supporters who under the BuSh2's tax cuts never said a peep about debts or the un-necessary war off budget debt or in 20 years of whitehouse budgets never had one in balance now see debt as a BIG DEAL

We ALWAYS said BIG peeps about the debt.

We just wanted the solution to be LESS SPENDING by the government.

Do you REALLY think that THIS congress, no matter how much taxes they get their hands on, aren't going to STILL SPEND more than they take in?