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."
[This message has been edited by fierobear (edited 12-31-2012).]
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02:15 PM
PFF
System Bot
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
June 4 (Bloomberg) -- President Barack Obama is poised to increase the U.S. debt to a level that exceeds the value of the nation’s annual economic output, a step toward what Bill Gross called a “debt super cycle.”
The CHART OF THE DAY tracks U.S. gross domestic product and the government’s total debt, which rose past $13 trillion for the first time this month. The amount owed will surpass GDP in 2012, based on forecasts by the International Monetary Fund. The lower panel shows U.S. annual GDP growth as tracked by the IMF, which projects the world’s largest economy to expand at a slower pace than the 3.2 percent average during the past five decades.
“Over the long term, interest rates on government debt will likely have to rise to attract investors,” said Hiroki Shimazu, a market economist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest publicly traded bank. “That will be a big burden on the government and the people.”
Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co. in Newport Beach, California, said in his June outlook report that “the debt super cycle trend” suggests U.S. economic growth won’t be enough to support the borrowings “if real interest rates were ever to go up instead of down.”
Dan Fuss, who manages the Loomis Sayles Bond Fund, which beat 94 percent of competitors the past year, said last week that he sold all of his Treasury bonds because of prospects interest rates will rise as the U.S. borrows unprecedented amounts. Obama is borrowing record amounts to fund spending programs to help the economy recover from its longest recession since the 1930s.
“The incremental borrower of funds in the U.S. capital markets is rapidly becoming the U.S. Treasury,” Boston-based Fuss said. “Do you really want to buy the debt of the biggest issuer?”
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02:36 PM
Pyrthian Member
Posts: 29569 From: Detroit, MI Registered: Jul 2002
doest change the fact that the USA spends more than it takes in. even with no taxes whatsoever.
maybe you should make a graph of the last 15 years and corrolate the taxes with the economy. watch as it fails. year after year. taxes had NOTHING to do with it. and it aint done yet. still got the next wave of failures as the core issue has not been solved yet. but, keep singing your song. just like a clock is right twice a day......(call back to the watch....bah - junk....)
doest change the fact that the USA spends more than it takes in. even with no taxes whatsoever.
maybe you should make a graph of the last 15 years and corrolate the taxes with the economy. watch as it fails. year after year. taxes had NOTHING to do with it. and it aint done yet. still got the next wave of failures as the core issue has not been solved yet. but, keep singing your song. just like a clock is right twice a day......(call back to the watch....bah - junk....)
I'm not singing any song, pyrthian. I'm posting FACTS. Higher tax rates isn't the answer. Spending must be cut. Spending is out of control. Higher taxes deflate the economy.
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05:42 PM
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
By STEPHEN BERNARD and TIM PARADIS (AP) – 5 hours ago
NEW YORK — Stocks fell to their lowest level in seven months Monday after traders couldn't shake fears that Europe's economic problems will derail a global recovery. The Dow Jones industrial average fell 115 points, or 1.2 percent, to its lowest close since November. The Dow lost 323 Friday after the government's May jobs report fell short of expectations. Broader indexes logged steeper percentage drops Monday. The technology-focused Nasdaq composite index fell 2 percent. Monday's drop was a smaller-scale repeat of Friday as traders again dumped stocks in the final hour. That signals traders would rather sell than be hit by surprises, especially because Europe's business day begins before trading opens in the U.S. Some traders say the slide has been overdone but that the market isn't likely to find much stability until there is a better sense about how Europe's economies will hold up under heavy cost-cutting. With only a sprinkling of economic and corporate news to go on, traders again tracked the moves of the euro. The 16-nation currency hit another four-year low and hurt European markets. The euro fell as low as $1.1878 before rising to $1.1915. A drop in the currency is seen as a sign of flagging confidence in Europe's ability to rein in its debt without falling back into recession. Financial stocks fell after a panel examining the financial crisis issued a subpoena to Goldman Sachs Group Inc. fell 2.5 percent. Bank of America lost 3.4 percent after news came out that the bank would pay $108 million to settle federal charges that its Countrywide Financial Corp. division had collected onerous fees from homeowners nearing foreclosure. Utility and gold stocks were among the few gainers, a sign that traders want investments considered safer in weak economies. Utility company FirstEnergy rose 2.7 percent, while Barrick Gold climbed 4.1 percent. "The market is playing defense and waiting for some resolution," said Mike Shea, managing partner at Direct Access Partners LLC in New York, pointing to the rise in gold stocks. Questions over the health of Europe's economy again dominated trading. Investors are concerned that budget cuts in Europe will stall a global recovery. The worries have pounded stocks since major indexes hit 2010 highs in late April. The Dow is down 12.4 percent since reaching 11,205 on April 26. The drop of more than 10 percent from the peak indicates a "correction." It's the first major drop since indexes bounced off 12-year lows in March last year. Jim Thorne, chief investment officer for equities at MTB Investment Advisers in Baltimore, said traders are afraid they're seeing a repeat of the financial crisis of 2008. But Thorne said that even though the jobs report Friday was disappointing, most numbers have pointed to an economy that is rebounding. "Right now the market is getting to the point where it's uninvestable. Fundamentals don't matter," Thorne said. "This is a period that will be looked back upon six to eight months from now as a wonderful investing opportunity." It was the lowest close for the Dow and the Standard & Poor's 500 index since Nov. 4. According to preliminary calculations, the Dow fell 115.48, or 1.2 percent, to 9,816.49, while the S&P 500 index fell 14.41, or 1.4 percent, to 1,050.47. The Nasdaq composite index fell 45.27, or 2 percent, to 2,173.90. The Nasdaq stands at its lowest level since Feb. 10.
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10:22 PM
PFF
System Bot
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
A disappointing jobs report along with more troubles in Europe - this time an out of the blue shockwave from Hungary - sent U.S. stocks spinning Friday. While the headline number read 431,000 job gains in the month of April (expectation was 513,000), 410,000 of those were temporary census workers and the Street promptly responded in disgust sending the S&P 500 down 3.4% and NASDAQ 3.6%. The broader Russell 2000 was down a whopping 5.0% showing the breadth of disaster for the session. In a staggering statistic only three stocks in the S&P 500 was up for the day.
Taking a closer look at the employment data - with the caveat that government statistics need many grains of salt to be digested, the unemployment rate fell from 9.9% to 9.7%. Unfortunately, much of this was due to the fact that 0.2% of the American workforce dropped out, hence the labor participation rate fell back down to 65.0%. Ironically, Wall Street's expectations were ratcheted up by comments Wednesday by President Obama that we should expect "strong" data Friday on employment. This had led to a surge in the closing hours of that day's trading... instead traders felt like they had been 'punked'. In another statistic the number of Americans out of work 6 months or more hit an all time high at 6.76 million. The only real positives in the report were a slight uptick in the average workweek and an increase in wages by 0.3%.
The Euro was crushed again (-1.7%) by the surprise news out of Hungary - dropping below $1.20 for the first time in years, while investors once more fled to their safety havens - US Treasuries and the dollar. 10 year yields dropped from 3.37% to 3.21%.
Commodities were hurt across the board with the exception of gold and natural gas (+2.3%); the former representing 'hard money' and the latter benefiting from potential regulatory issues against oil. Crude dropped 4.15% to $71.51, while gold gained 0.65% to $1216.50. Silver, which is much more economically sensitive, fell 3.5% to $17.29. Copper hit a 5 month low falling 4.3%, and as the most economically sensitive commodity its performance is important to watch.
European stocks closed before the worst of the selloff hit the U.S., and finished with sharp losses but not at levels seen in the U.S. Britain dropped 1.8%, Germany 1.9% and France 2.9%. Please note Hungary is a EU member but does not use the currency. On Thursday, Lajos Kosa, deputy chairman of the governing Fidesz party, said Hungary was facing a Greece-like financial meltdown. And former Fidesz finance minister Mihaly Varga said the deficit could reach 7-7.5 percent of GDP, about twice as much as planned for 2010 by the previous government. The new government was sworn in Saturday and its talk about a massively revised budget gap was eerily similar to the situation in Greece. "The government is ready to avoid the Greek path," said Peter Szijjarto, the spokesman for Prime Minister Viktor Orban, while at the same time saying the Hungarian economy was in a "grave" situation.
Asian markets had closed before the U.S. employment data were released hence will be punished Monday. Hong Kong & China were flat while Japan fell 0.1% and India gained 0.6%.
The Brazilian Bovespa fell 2.0%.
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10:38 PM
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
With the mainstream media focusing on the country's leveling unemployment rate, improving retail sales, and nascent housing recovery, one might think that the US government has successfully navigated the economy through recession and growth has returned. But I will argue that a look under the proverbial hood reveals a very different picture. I believe the data shows that the US economy is badly damaged, and a modern-day depression has begun. In fact, just as World War I was originally called The Great War (and was retroactively renamed after World War II), Peter Schiff has said that one day the world will refer to the 1929-41 era as Great Depression I, and the current period as Great Depression II.
For starters, look at unemployment. During Great Depression I, unemployment broke 25%. If government statistics are taken at face value, the current unemployment rate is 9.9%, but a closer look reveals that the broadest measure of unemployment is currently at 20% - and rising. So, today's numbers are in the same ballpark as the '30s even though the federal government is using unprecedented measures to keep the economy afloat. Remember, in Great Depression I, FDR never ran a deficit nearly as large as President Obama's. Moreover, the Federal Reserve of the 1930s still had a gold standard with which to contend, while today's Fed has increased the monetary base with impunity. Yet even with all that intervention, unemployment figures still indicate that we have entered depression territory.
What is demoralizing to an unemployed person is not simply being let go, it is being unable to find a new job for an extended period of time. And this is where Great Depression II really rears its ugly head. According to the US federal government's own data, the median duration of unemployment is now over five months - and rising. This is the highest it's been since the BLS started compiling this statistic in 1965. As workers start to go this long without jobs, they eat into their savings. Eventually - and especially in a country with a savings rate as low as ours and debt as high as ours - they run out of cushion and hit the street. Formerly middle-class people have to make decisions never thought possible: do I eat in a shelter or go hungry in my home?
It's no surprise, then, that about 40 million people - or one out of every eight Americans - are receiving food stamps in Great Depression II. During the height of Great Depression I, the rate was just one out of thirty-five Americans. Even with the stimulus programs, Great Depression II is actually worse on this measure than Great Depression I - and the USDA estimates that the program could grow by another 50%. Who will pay for this growing program if everyone is out of work?
Despite tax credits that have created a rush of purchases this spring, housing is in just as bad shape. During Great Depression I, home prices dropped some 15% from their pre-depression peak (achieved in 1925). In Great Depression II, housing is down at least 30% from the pre-depression peak (achieved in 2005), with some markets down more than 50%.
So, many of the people expected to keep making mortgage payments as they eat tuna fish to stay alive will be paying double their home's resale value. This is a tremendous incentive to walk away, with disastrous consequences for the country's social fabric in these trying times. Empty homes breed crime and vandalism, encouraging more to flee in a negative feedback loop. Moreover, the many 'walkaways' may create a class of Americans with ruined credit - right when many employers have started checking credit scores before hiring.
Even more worrisome, the present drop in home prices is against a backdrop of price inflation. In Great Depression I, our grandparents may have lost value in their home, but everyday goods (milk, diapers, automobiles, etc.) got cheaper at the same time. That made their savings 'cushion' deeper when they needed it most. Today, as home equity (now our main store of savings) declines, prices for consumer goods are rising. It's a tight squeeze indeed.
From jobs to food to the roofs over our heads, the current period of economic turmoil is at least as bad as the First Great Depression, whether or not the financial media wishes to acknowledge it. The main difference is that unlike in the '30s, the US dollar is now the world's fiat reserve currency, so we are able to push our problems overseas for awhile. The plight of the rural Chinese is really our plight - we are living lavishly on the wealth they create. Were they to quit this dastardly arrangement, the full effects of Great Depression II would be felt in America.
By contrast, in Great Depression I, the US was on the gold standard like everyone else, which forced us to live within our means. This, in turn, made it easier to recognize that the economy was in decline and changes had to be made.
Unfortunately, because of the responses of the Administration and the Federal Reserve, which I believe to be deeply misguided, I remain concerned that Great Depression II could develop into something far more devastating than its predecessor, something that other countries in the world have experienced but was thought impossible in the United States: a hyperinflationary depression. As bad as the current downturn has been, inflation would make it immeasurably worse. It would require an honest accounting of the problems we face today to avert the disaster we see coming tomorrow.
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11:35 PM
Jun 8th, 2010
Pyrthian Member
Posts: 29569 From: Detroit, MI Registered: Jul 2002
the only hope is to apply Labor to Natural Resources that is it. the ONLY way wealth can return. taxation is moot and has NO bearing whatsoever
if we make nothing - we dont get paid and continue to send more & more money to asia but - keep your head in the sand and pretend you can tax/untax your way out of that
FOS
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12:42 PM
Jun 18th, 2010
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
By Paul Abelsky June 19 (Bloomberg) -- Russia wants the ruble to be one of the world’s reserve currencies as President Dmitry Medvedev renews his push to reduce the dollar’s dominance and make Moscow a global financial hub. “Only three, five years ago it seemed like a fantasy” to create a new reserve currency, Medvedev said yesterday in a speech in St. Petersburg, Russia. “Now we are seriously discussing it.” Medvedev, who has repeatedly called for a supranational currency to match the dollar, said discussions with China are continuing on broadening the global options. Russia sold U.S. Treasuries for a fifth consecutive month in April, the U.S. Treasury Department said June 15. The world may need as many as six reserve currencies, Medvedev said. “It’s something that’s obviously needed,” he said at the St. Petersburg International Economic Forum. “Developing a financial center in Moscow will considerably help to strengthen the ruble’s position as one of the reserve currencies.” Medvedev’s comments underline Russia’s ambition to reassert its global power following the financial crisis. Gross domestic product shrank 7.9 percent last year, the worst contraction since the fall of communism in 1991, after the credit crunch sent commodity prices plunging. If a country wants to alter the world economic order, including the number of reserve currencies, it must become an international financial center, Bank of Israel Governor Stanley Fischer said in an interview yesterday. ‘Don’t Emerge by Fiat’ “For a currency to be a reserve currency, you have to have capital markets in which you can sell it and buy it very easily,” Fischer said. “New reserve currencies don’t emerge by fiat. They emerge as countries change.” Medvedev said he envisages a new economic hierarchy allowing emerging-market giants such as Russia and China to drive the global agenda as the world emerges from the first global recession since the 1930s. “We really live at a unique time, and we should use it to build a modern, prosperous and stron Russia, a Russia that will be a co-founder of the new world economic order,” he said. The BRIC countries -- Brazil, Russia, India and China -- were net sellers of U.S. assets in April, driven mainly by Russian divestments, Brown Brothers Harriman & Co. Senior Currency Strategist Win Thin said in a June 15 note. Russia may add the Australian and Canadian dollars to its international reserves as the central bank diversifies the world’s third-largest stockpile away from the greenback, central bank First Deputy Chairman Alexei Ulyukayev said in a June 16 interview. Though Russia is “very carefully monitoring what’s happening in the euro zone,” the emergence of the euro as a currency to rival the dollar’s dominance helped soften the impact of the global crisis, Medvedev said. “If the world depended completely on the dollar, the situation would have been more difficult,” Medvedev said.
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11:27 PM
Toddster Member
Posts: 20871 From: Roswell, Georgia Registered: May 2001
the only hope is to apply Labor to Natural Resources that is it. the ONLY way wealth can return. taxation is moot and has NO bearing whatsoever
if we make nothing - we dont get paid and continue to send more & more money to asia but - keep your head in the sand and pretend you can tax/untax your way out of that
FOS
If there is, but a single person on PFF-- who would have personal experience being FOS, it would be you. Better listen to him Bear--he's from Detroit. They're well versed in sound economic policy, high employment rates, and how to make the most of US tax $$.
NOT!
[This message has been edited by maryjane (edited 06-20-2010).]
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02:44 PM
Jun 23rd, 2010
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
Originally posted by maryjane: If there is, but a single person on PFF-- who would have personal experience being FOS, it would be you. Better listen to him Bear--he's from Detroit. They're well versed in sound economic policy, high employment rates, and how to make the most of US tax $$.
NOT!
heck yeah! I am INFINITE!
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02:44 PM
Jun 26th, 2010
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
Even Keynesian Krugman has to admit things aren't looking too good. Of course, he doesn't abandon his Keynesian nonsense, insisting that government still hasn't spent enough (Jesus Christ, what does it take to get people like him to realize he's WRONG?). But at least he can admit what's been done so far isn't working:
Originally posted by Pyrthian: taxation is moot and has NO bearing whatsoever
Since you are ONLY stating your opinion and not one link to back this up, and probably never owed a business of any size, I will give mine as well. The businesses that we have left in this country are shaking in their boots over more taxes. This is the reason we will see extremely slow job growth in the next several years. Panic mode has set in. Your statement is utter BS. Now we have two opinions.
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10:38 AM
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
Since you are ONLY stating your opinion and not one link to back this up, and probably never owed a business of any size, I will give mine as well. The businesses that we have left in this country are shaking in their boots over more taxes. This is the reason we will see extremely slow job growth in the next several years. Panic mode has set in. Your statement is utter BS. Now we have two opinions.
Expanding on this, there are two things at work that are bad for business:
1. Business likes predictability and stability. Business is capitalism and capitalism doesn't like it when they have no idea what hairbrained socialist policy is coming next from the government. They can't make plans during such uncertainty.
2. Government spending is bottling up credit. Business uses credit to finance production and expand. Business can't do that with the government sucking up all the credit by way of their borrowing and spending.
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10:45 AM
partfiero Member
Posts: 6923 From: Tucson, Arizona Registered: Jan 2002
Expanding on this, there are two things at work that are bad for business:
1. Business likes predictability and stability. Business is capitalism and capitalism doesn't like it when they have no idea what hairbrained socialist policy is coming next from the government. They can't make plans during such uncertainty.
2. Government spending is bottling up credit. Business uses credit to finance production and expand. Business can't do that with the government sucking up all the credit by way of their borrowing and spending.
Both of us coming from CA have seen the destruction of what made it the 5th largest economy in the world, manufacturing. I have owned four businesses there starting in 79, first three were manufacturing. Everything that take away from your bottom line is a great concern. Rising taxes, insurance, wages and the astounding regulations were the reasons many headed to Mexico and China. With higher taxes, fees and what is in store for them with the health care bill, they have retreated into their shells and won't stick their necks out for fear it will be cut off. And if Brown gets in you can expect at least 1.4 million more CA jobs will be headed to the south, east or across the Pacific.
edit; Just got a SBA loan, only took five months to get it. Was qualified and had all of the paper work in on day one. Five friggen months of red tape and incompetence by the government almost ruined my opportunity to expand and create a couple of new jobs. Can't wait till these BOZOs handle our health care. Probably take five months to get cleared for an emergency bypass.
[This message has been edited by partfiero (edited 06-28-2010).]
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12:04 PM
Jul 1st, 2010
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
Both of us coming from CA have seen the destruction of what made it the 5th largest economy in the world, manufacturing. I have owned four businesses there starting in 79, first three were manufacturing. Everything that take away from your bottom line is a great concern. Rising taxes, insurance, wages and the astounding regulations were the reasons many headed to Mexico and China. With higher taxes, fees and what is in store for them with the health care bill, they have retreated into their shells and won't stick their necks out for fear it will be cut off. And if Brown gets in you can expect at least 1.4 million more CA jobs will be headed to the south, east or across the Pacific.
In this article, I caught something interesting - that businesses, not IBM, HP, and so on, but small to medium businesses are simply disappearing, causing a drop in tax revenue:
But while officials in Assessor Larry Stone's office were bracing for a steep drop in home values, as well as a modest reduction driven by the state's consumer price index, they were not expecting a third body blow: an "unheard of" contraction in commercial and business property.
In Santa Clara County, businesses with at least $5,000 in assets — from mom-and-pop shops to national chain stores to tech monoliths — are required to file an assessment claim with Stone's office. This year, the number of claims fell from 46,000 to 42,000. Although that's not a complete accounting of businesses in the county, officials see it as one of the most definitive benchmarks available. Numbers for previous years weren't available Wednesday.
"With the larger companies, it's layoffs and reductions," said Pat Sausedo, vice president for public affairs at the San Jose Silicon Valley Chamber of Commerce. But "small- and medium-sized businesses disappear weekly. They just can't keep up."
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09:58 PM
Jul 2nd, 2010
pokeyfiero Member
Posts: 16203 From: Free America! Registered: Dec 2003
Since you are ONLY stating your opinion and not one link to back this up, and probably never owed a business of any size, I will give mine as well. The businesses that we have left in this country are shaking in their boots over more taxes. This is the reason we will see extremely slow job growth in the next several years. Panic mode has set in. Your statement is utter BS. Now we have two opinions.
Tax has a definite impact on everything but maybe what he is saying is who the **** cares about the taxes when we don't make **** here anyway. Taxation may just be a symptom relief. It sure as hell isn't any cure to our real problem though.
Companies are not leaving the US solely because of tax. They leave because other countries work for pennies on the dollar. People go to wallmart everyday and prove they are ignorant or don't care.(not picking on wallmart in particular)
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12:39 AM
partfiero Member
Posts: 6923 From: Tucson, Arizona Registered: Jan 2002
Tax has a definite impact on everything but maybe what he is saying is who the **** cares about the taxes when we don't make **** here anyway. Taxation may just be a symptom relief. It sure as hell isn't any cure to our real problem though.
Companies are not leaving the US solely because of tax. They leave because other countries work for pennies on the dollar. People go to wallmart everyday and prove they are ignorant or don't care.(not picking on wallmart in particular)
In the 80s and early 90s I saw many SOCAL manufacturing companies fold or head to Mexico because taxes, insurance and stiff new regulations chipped away at their bottom line. Today many US companies are hanging by one thread and any tax increase will be the death of them. Now they have government health care and Cap and Trade knocking as well. In a bad economy everything is magnified for struggling businesses.
On the Walmart issue, they became a very different company after the kids took over. They did sell their American soul to the Chinese in order to get their stores opened up over there. A dirty deal was done that eliminated the Chinese from having any competition on any item that Walmart sells that the Chinese produce. I am very pro business, but despise the fact that Walmart are nothing but whore$ for the Chinese government.
[This message has been edited by partfiero (edited 07-02-2010).]
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01:49 AM
partfiero Member
Posts: 6923 From: Tucson, Arizona Registered: Jan 2002
Anyone have the classic video of BO's speech maybe yesterday or today? In it he said; Now some say that 9.7% is high, but it is not as bad as say 10 or 12 0r....... 15%. Saw it today on the TV, WOW, just WOW.
[This message has been edited by partfiero (edited 07-02-2010).]
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02:04 AM
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
Oh, I forgot about this...on January 1, 2011, the Bush tax cuts will expire. Obama and the Democratic Congress plan to let them expire (so much for "nobody's taxes below $250,000 will go up). Word from the economic community says this will have a HUGE NEGATIVE impact on business and the economy.
In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15% - The 25% bracket rises to 28% - The 28% bracket rises to 31% - The 33% bracket rises to 36% - The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.
The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
Second Wave: Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.
The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”
Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.
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02:45 AM
kevin Member
Posts: 2722 From: Elk Grove, CA USA Registered: Jan 2000
Anyone have the classic video of BO's speech maybe yesterday or today? In it he said; Now some say that 9.7% is high, but it is not as bad as say 10 or 12 0r....... 15%. Saw it today on the TV, WOW, just WOW.
You know about the job loss numbers for June right? You wanna know the media spin on it?
Here is a copy & paste tag-line on the story from my local newspaper :
"The nation's unemployment rate dropped to its lowest level in nearly a year in June, with private employers offsetting the number of temporary U.S. Census workers who were laid off."
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02:51 AM
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
The news media is useless. They've got their noses so far up Obama's ass, if they sneeze they'll blow the buttons off his shirt. These stupid ass liberal socialists will drive this ship right into the iceburg, and blame Bush for all of it. Stupid. Totally stupid.
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03:27 AM
R Runner Member
Posts: 3694 From: Scottsville, KY Registered: Feb 2003
They are TRYING to do that. They hate capitalism. The fewer indepandant strongholds there are (non government dependant businesses), the more people become dependant on the government.... which is what the Liberals want. Bigger government to "help" all of us. They are then allowed to distribute wealth the way they want. This is about power, NOT helping the people.
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10:02 AM
fierobear Member
Posts: 27083 From: Safe in the Carolinas Registered: Aug 2000
Wow. It's only costing $571,428 per job, and 58% of those jobs are temporary construction jobs! Of course, that doesn't include the interest we will be paying on the money borrowed from the Chinese to pay for these jobs. Assuming an average of 2% interest on the Treasury Bonds to fund this, that's $40,000,000 in interest. That means we will be paying $266,000/yr for each of the 1,500 permanent jobs.
Do liberals not know math? Do they need calculators?
WASHINGTON – The government is handing out nearly $2 billion for new solar plants that President Barack Obama says will create thousands of jobs and increase the use of renewable energy sources.
Obama announced the initiative in his weekly radio and online address Saturday, saying the money is part of his plan to bring new industries to the U.S. "We're going to keep competing aggressively to make sure the jobs and industries of the future are taking root right here in America," Obama said.
The two companies that will receive the money from the president's $862 billion economic stimulus are Abengoa Solar, which will build one of the world's largest solar plants in Arizona, creating 1,600 construction jobs; and Abound Solar Manufacturing, which is building plants in Colorado and Indiana. The Obama administration says those projects will create more than 2,000 construction jobs and 1,500 permanent jobs.
Obama's announcement came a day after the Labor Department reported that employers slashed payrolls last month for the first time in six months, driven by the expected end of 225,000 temporary census jobs. Meanwhile, private-sector hiring rose by 83,000 workers.
The unemployment rate dropped to 9.5 percent.
Obama said that while it may take years to bring back all the jobs lost during the recession, the economy is moving in a positive direction. He placed some of the blame for the slow pace of recovery on Republicans, saying GOP lawmakers, "are playing the same old Washington games and using their power to hold this relief hostage." Obama has said that to bring the nation's economy back from the brink of a depression, it was necessary to add to the country's debt in the short term.
Republicans have tried to capitalize on that growing sum. Georgia Sen. Saxby Chambliss said in the Republican's weekly address that the country's $13 trillion debt is a national security issue that will leave the U.S. vulnerable and force future generations to "pay higher taxes to foot the bill for Democrats' out-of-control spending."