Tuesday, December 08, 2009

Almost 4 Out of 10 Americans Pay NO Income Tax

The Tax Foundation reported last week that more than 143 million individual income tax returns were filed in 2007, and 46.6 million of those returns had a zero or negative tax liability, setting a new record for the number of “non-payers.” This group represented almost one out of every three tax returns filed in 2007 (32.6 percent, see chart above), and reflects tax filers whose exemptions, deductions, and credits wiped out any federal income taxes that would have been due.

According to the Tax Foundation, every dollar withheld from the paychecks of the “non-payers” during the year was refunded, and in about half of the cases, substantial additional money was refunded to the tax filer. There were an additional 15 million people in 2007 who did not earn enough income to file a tax return, bringing the total number of Americans who paid no federal income taxes to more than 61 million, or 39 percent of the tax-eligible population (158 million including filers plus non-filers).

What are the implications of this and what does this have to do with the Bush tax cuts?  Find out here at the Enterprise Blog.

91 Comments:

At 12/08/2009 9:35 AM, Anonymous Anonymous said...

No wonder we're going broke...too many freeloaders.

 
At 12/08/2009 10:11 AM, Anonymous Machiavelli999 said...

Let's think about the Bush era deficits with at least some semblance or rationality. And then think about why we have such high deficits now.

So, Bush took over with a surplus. But he took over at the beginning of a recession. A recession reduces tax revenue and so a deficit formed. I don't blame Bush for that. Once the economy recovered, we should have gone back into the surpluses.

But a couple things happened. First, we ramped up our military spending. Some of it was understandable, but one war in particular was not (at least IMO).

The on top of that, Bush passed a tax cut. I know this may sound crazy, but a tax cut reduces tax revenue and if its not matched by spending cuts, it increases the deficit.

And so, this is how, even after the economy recovered, we still had deficits. This is really basic economic analysis here.

Now, lets turn to Obama. Obama took over with a deficit already at $1 trillion. This is again because of an even deeper recession that he came into. Again, I know this might sound crazy, but deficits can come from two places: yes, high spending and also decreasing tax revenue.

So, he put forth a $787 billion stimulus package. The majority of it is spent in the first two years. This year I believe $200 billion was spent. So, Obama increased the deficit this year from $1T to $1.2T.

Let's not act like he is 100% responsible for this deficit. He is not even 50% responsible for it.

 
At 12/08/2009 10:19 AM, Blogger Paul said...

What a dumb move by the "compassionate conservative" crowd. I liked Bush overall, but everyone should have to pay taxes so at least they understand government handouts don't come from Obama's "stash."

 
At 12/08/2009 10:31 AM, Blogger Paul said...

Machiavelli,

My understanding is 2009 budget Democrats stalled Bush through continuing resolutions. and don't forget the $600 billion pork-stuffed omnibus bill early this year, which Obama eagerly signed.

However, I would certainly agree Bush spent far too much on failed Liberal programs that Obama voted for as a Senator and agitated for as a community organizer huckster.

And Obama, for all his blame shifting, plans on covering Bush's wave of debt with a tsunami of debt. He's 100% responsible for that.

 
At 12/08/2009 10:34 AM, Anonymous Anonymous said...

According to CNN, there is evidence to suggest that the budget deficit at January 2009 was $485.2 billion.
http://money.cnn.com/2009/01/13/news/economy/treasury_budget_deficit_Dec08/index.htm

Obama took over at a $485.0 billion deficit and turned it into a $1,200.0 billion deficit in 10 months. The greatest deficit increase in one year ever.

"The deficit has ballooned in the first quarter of the fiscal year as the Treasury, Federal Reserve and FDIC began spending record amounts of the $7.2 trillion committed so far to bailouts, financial stabilization efforts and capital investments. The numerous emergency actions began as a result of the credit crisis that started in mid-September."

Does that help with the facts?

 
At 12/08/2009 10:44 AM, Anonymous Anonymous said...

I know this may sound crazy, but a tax cut reduces tax revenue ...

Not as crazy as your constant shilling for "Socialist in Chief". Every time the government has cut taxes - Kennedy, Reagan, W - Revenue has INCREASED.

Obama took over with a deficit already at $1 trillion.

Obama voted for every penny of the spending realted to increasing the deficit from 160 billion, before the crisis, to it's current level. The Democrats controlled the House of Representatives, they were in complete control of spending. Take a civics course.

Obama increased the deficit this year from $1T to $1.2T.

Wrong again. Revenue is already 300 billion below Obama's projections. The new figure is closer to1.7 TRILLION.

Let's not act like he is 100% responsible for this deficit. He is not even 50% responsible for it.

I know it's hard to leave the cult, but it's time to confront reality. Obama and the Democrats are 100 percent responsible for this mess. The CRA, the TARP, the Stimulus, etc. - they wrote the bills and voted for it all.

It's not that liberals are ignorant, it's just that they know so much that isn't so"

- Ronald Reagan

 
At 12/08/2009 10:50 AM, Anonymous Lyle said...

Note that the article concerns income taxes not all taxes. If you are employed likely you pay Fica tax effectively at 15.3 of the first 106k you make and 2.9% above this (I include the employeer contribution because otherwise you would likley get it in your paycheck) Also you pay various excise taxes gas taxes etc. So most everyone pays some taxes. Note that until you get some distance up into the 25% tax bracket (above 67k married filing jointly) the fica tax is larger than the income tax liablity.
So we need to precise and say we think everyone should pay income tax because everyone does pay some federal tax.

 
At 12/08/2009 11:11 AM, Anonymous Anonymous said...

If you are employed likely you pay Fica tax ...

If you are in the lower brackets, you'll get all of this back and more. You'll also receive a refund tied to the Earned Income Tax Credit. So, unless you're arguing that we should get rid of Social Security and Medicare, FICA is a non-starter.

 
At 12/08/2009 11:18 AM, Blogger Size said...

Note that the article concerns income taxes not all taxes. If you are employed likely you pay Fica tax effectively at 15.3 of the first 106k you make and 2.9% above this

Yes. But, unlike the income tax, the FICA tax creates a liability on the government's balance sheet. It creates an obligation to eventually pay you social security income.

Now, you can argue that it's a tax like any other, but then you're going to take away the left's mantra that social security is not just basic welfare. It can't be both a forced savings and welfare.

 
At 12/08/2009 11:24 AM, Blogger Walt G. said...

We have to include all taxes if we want to figure spendable net income. That includes money spent for government services that is not transparent such as license plates, gas taxes, sales taxes . . . I doubt if we can find anyone anywhere who pays NO tax. In fact, the types of taxes I mentioned would probably be disproportionally higher for those in the lower income brackets. They don’t sugar coat taxes as “revenue enhancements” for nothing.

 
At 12/08/2009 11:54 AM, Anonymous Machiavelli999 said...

Just reading through these comments again I see completely missed the point of what I was saying.

Let me repeat this again. Deficits come from two places. Declining tax revenues and increased spending. It was the declining tax revenues that was mostly responsible for this $1Trillion dollar deficit and NOT increased spending.

"However, I would certainly agree Bush spent far too much on failed Liberal programs that Obama voted for as a Senator and agitated for as a community organizer huckster."


NOO!!! I don't agree with that at all. Yes, he did pass that perscription drug benefit during his 2nd term which he didn't fund at all. But for the most part the deficit came from increased military spending and tax cuts.

I can't repeat this enough. It is inconceivable for conservatives to believe that deficits can come from falling tax revenues. It can only come from increased spending.

Just like when you ask them about why businesses have trouble in America now, they'll say its the increased costs imposed by government or high taxes. Not the lack of demand caused by a broken credit system which is actually the main cause of the problem.

 
At 12/08/2009 12:00 PM, Anonymous morganovich said...

there was never a clinton surplus.

http://activerain.com/blogsview/855368/the-clinton-budget-surplus-fact-or-fiction-

this lays it all out using treasury numbers. he lied about it, pure and simple. his administration increased intergovernmental borrowing, and used it to reduce public debt, but national debt as a whole went up

stealing from social security to pay bondholders is not debt reduction. if you include SS, and the medi programs, he was running up ferocious debts in the off balance sheet unfunded liabilities. using GAAP, there has not been a balanced budget since Eisenhower.


further, his deficits were already increasing markedly before he left. the dot bust was already underway.

i am amazed at how many times this fable has to be debunked.

 
At 12/08/2009 12:10 PM, Anonymous Anonymous said...

Everyone should pay some income taxes; otherwise, they look at income tax as a benefit, a source of potential revenue for themselves (via income redistribution to quote the Socialist-In-Chief), not a responsibility of citizenship (a shared responsibility of paying for the gov't).

 
At 12/08/2009 12:17 PM, Blogger Paul said...

"But for the most part the deficit came from increased military spending and tax cuts."

Eh, so Medicare, Social Security, farm subsidies, education spending, Acorn handouts, food stamps, Pell Grants, etc., just don't count? Why?

Money is fungible last I checked.

 
At 12/08/2009 12:45 PM, Anonymous Anonymous said...

"But for the most part the deficit came from increased military spending and tax cuts."

One more time s-l-o-w-l-y the Bush tax cuts led to INCREASED revenue. I guess that it is inconceivable for leftists to believe that increased revenue can come from reduced tax rates.

As for Bush's spending, yes, he spent too much, but when the Republicans controlled the House, Democrats always proposed more spending than the Republicans approved. When the Democrats controlled the House they increased spending dramatically.

Bush increased military spending because we were attacked and needed to respond and Clinton had cut the military nearly in half during his administration.

I can't say this enough, you're delusional.

 
At 12/08/2009 1:10 PM, Anonymous Benny The Man said...

Morganivich:
I gotta call you on this.
The national debt, as a percentage of GDP, did in fact decline in the Clinton years. It rose in the Reagan, Bush and Bush years, and it rising in the Obama years.

Look, I don't care what party you like, or if you detest Clinton for his wanton ways, or if you think he enfeebled our military.

Fact is, Clinton and Rubin were serious economic administrators, and we should examine his Presidency to see why, in the modern era, Clinton alone obtained good results--declining debt/GDP ratios.

 
At 12/08/2009 1:47 PM, Anonymous morganovich said...

benny-

you are confusing "public debt" with "national debt"

Treasury numbers for national debt (sept FY end)

1993: 4.41T
1994: 4.69T
1995: 4.97T
1996: 5.22T
1997: 5.41T
1998: 5.52T
1999: 5.65T
2000: 5.67T
2001: 5.81T

cash deficit every year. 2000 was close (and the peak tax year of a massive stock bubble) but never crossed into the green. further, the deficit was already increasing substantially before he left office.

also keep in mind: this purported deficit uses a kind of cash accounting that is illegal for a public company to use.

using GAAP would require them to include unfunded liabilities like social security and the medi programs. add those in and clinton was never within hundreds of billions of break even in any year.

great explanation of how this works here:

http://www.shadowstats.com/article/federal_deficit_reality

 
At 12/08/2009 1:51 PM, Blogger Paul said...

"..and we should examine his Presidency to see why, in the modern era, Clinton alone obtained good results--declining debt/GDP ratios."

Benny, as has been pointed out to you, no examination necessary.

*The GOP of '94, led by Gingrich.
The budget showdown of '95 should dispel any doubts.
*The gutting of the military.
*The dot com/Y2K boom(that led to the bust of 2000.)

There you have it. Mystery solved.

 
At 12/08/2009 2:08 PM, Blogger juandos said...

"So, Bush took over with a surplus. But he took over at the beginning of a recession"...

Repeating a lie mach999 over and over again won't make it morph into a fact...

Another Liberal Myth Explained

"I know this may sound crazy, but a tax cut reduces tax revenue and if its not matched by spending cuts, it increases the deficit"...

Do some homework first mach999...

Ten Myths About the Bush Tax Cuts

"Now, lets turn to Obama. Obama took over with a deficit already at $1 trillion"...

Are you lying now or just confused mach999?

Bush Deficit vs. Obama Deficit in Pictures

"Let's not act like he is 100% responsible for this deficit. He is not even 50% responsible for it...

Nice try mach999...

Fact check: On his 100th day in office, Obama disowns the deficit that he helped to shape

 
At 12/08/2009 2:10 PM, Anonymous Machiavelli999 said...

This is why all the people who talk about a debt crisis are dead wrong. What would happen to a country or a person if he was really in a debt crisis??

Well, he would find it very hard to borrow more and even when he does borrow more it would be at punitively high rates. The price of products to insure against this person defaulting (aka Credit Default Swaps) would skyrocket.

And now, lets see whats going on with US. It can EASILY borrow more. Not only that, it can borrow at historically low rates. And on top of that Credit Default Swaps on US debt are at microscopic levels.

Facts should be important than ideology, but sadly its not.

 
At 12/08/2009 2:13 PM, Anonymous morganovich said...

ps.

the reason clinton did better than those who have followed him is that he didn't have to deal with cleaning up the mess he made. he got to be the last guy who wasn't trying to clean up a bubble while dealing with the new one that was inflating.

the CRA disaster is directly clnton's fault, aided and abetted by bubble denier alan greenspan.

clinton and rubin were horrid failures. they used enron style gimmicks to make the data look good, and flat out lied about deficits. they pushed far more expense out of cash and into "unfunded liability" than anyone prior.

at least bush, who was hardly a paragon of fiscal discipline, was more honest about the deficit and added some of clinton's off balance sheet stuff back into the cash deficit.

clinton's economic legacy was accounting fraud, preposterous monetary policy, huge hidden liabilites, and a burst bubble.

you want to emulate THAT?

also, let's be serious for a moment - it's temping and easy to pin all the blame/credit for the economy on the president, but it doesn't work that way. mostly, he can just get in the way.

to the extent that he doesn't, we do better. this is why, historically, the economy and the stock market tend to outperform when the congress and white house are controlled by different parties.

the best we can say of clinton's policies is that there weren't many. once his ruinous initial agenda failed and newt and co took the congress, he pretty much didn't do anything apart from sneaking the CRA time bomb past security.

it's a sad testament to just how bad our elected officials are that "governmental gridlock" is our best hope for prosperity.

 
At 12/08/2009 2:23 PM, Blogger OA said...

Machiavelli999 said...
... But a couple things happened. First, we ramped up our military spending. Some of it was understandable, but one war in particular was not (at least IMO).

The on top of that, Bush passed a tax cut. I know this may sound crazy, but a tax cut reduces tax revenue and if its not matched by spending cuts, it increases the deficit.


You clearly have never looked at the numbers yourself. Available from the US Treasury. But I've also posted 2 websites below that seem consistent with the Treasury data and easier to pull. But use the Treasury data if you prefer. It's a pain to find though as I've done it several times during the year and have to figure out where it is every single time.

US government tax receipts in 2003 ($1.8 trillion) were the lowest in the last 10 years. 2004, after the tax rate cuts, they were up and by 2005 ($2.2 trillion), they were higher than in 2000 ($2 trillion), the highest they had been under Clinton. 2008 at $2.5 trillion was 25% higher than in 2000.

http://www.usgovernmentspending.com/
http://www.usgovernmentrevenue.com/

Graph tax receipts and disbursements and it's clear why there was a surplus or close to in the late 90's. Hint: Graph the NASDAQ and S&P on there, and note that Clinton cut capital gains taxes in 1997.

Blaming it on the increased defense spending doesn't hold up either. Hold defense spending flat at Clinton's last budget and in spite of the increase in tax receipts you get a tiny surplus in some years. Inflate it using the CPI and there's a deficit.

Entitlement spending increased at 7% annually for the last 12 or so years. That's the real problem. Unlike defense spending which is the only part of the US government that is cut or slowed once in a while, entitlement spending balloons automatically.

For fun, plot the White House budget on there (around the last table in their budget) and even after the record 2009 spending year, the spending is unbelievable. They haven't updated it for that extra $9 trillion they projected over 10 years so I'm not sure if that's higher spending or lower receipts.

Note that the GDP of Germany is $3.7 trillion, so the US Government at $3.9 trillion was larger than the GDP of Germany in 2009. It was also $0.9 trillion higher than 2008. Last time I checked that was more than all the years of the Iraq war, and it was added in 1 year. The projected spending is around $3.7 - $3.8 trillion the next three years.

Note that $3.7 trillion is a bit larger than the $2.x trillion in tax receipts that are going to be coming in.

 
At 12/08/2009 2:23 PM, Anonymous morganovich said...

mach-

borrowing from the FED and from trade partners desperate to prop up our currency and retain competitiveness is not easy borrowing. might as well buy all your own cars off a used car lot and claim business is booming.

nor is giving free money to banks to buy US bonds and shore up tier one capital.

borrow at 25bp, lever up 15:1, buy 5 year yield at 211bp, and bingo - 25% yield while looking like you are taking no risk.

obviously, this strategy depends on rates staying low and timing mismatch - hence, the short end of the curve is nearly zero (arbed out) and we have the steepest yield curve in recent memory.

this will get incredibly ugly when rates rise.

 
At 12/08/2009 2:24 PM, Anonymous Anonymous said...

And now, lets see whats going on with US. It can EASILY borrow more. Not only that, it can borrow at historically low rates.

You realy can't be this clueless, can you? Who do you think has been buying up treasuries and keeping rates low?

Here's a clue:

In the second quarter, the most recent for which data is available, the Fed bought $164 billion out of the $339 billion in net new Treasurys sold.

WSJ

The Fed accounts for 50 percent of treasury purchases.

 
At 12/08/2009 2:26 PM, Anonymous Machiavelli999 said...

Benny is right. Whether in absolute terms Clinton reduced or didn't reduce the debt is meaningless.

As a percentage of GDP, it definitely decreased and that's what matters the most.

Because after World War 2 the United States was facing a huge debt load at 120% of GDP. How did they pay that off.....????

They didn't. They just grew out of it.

 
At 12/08/2009 2:33 PM, Blogger juandos said...

"Facts should be important than ideology, but sadly its not"...

ROFLMAO!

Six Years of Unheeded Warnings for GSE Reform

Timeline shows Bush, McCain warning Dems of financial and housing crisis; meltdown

 
At 12/08/2009 2:40 PM, Anonymous Machiavelli999 said...

You realy can't be this clueless, can you? Who do you think has been buying up treasuries and keeping rates low?

Although, there is no doubt an effect on rates by Fed purchases, it is small. Maybe 0.25% - 0.5%.

The fact of the matter is, it is undeniable that at the height of the crisis, the ultimate safe haven asset was US debt. And it is undeniable that the US has no problems at all serving this debt.

As another comparison, compare US to other counties. Let's compare it to two countries that really do have serious economic and political problems. Japan and Italy.

Italy has a Prime Minister who is more interested in banging girls young enough to be his grandaughter and Japan is faced with chronic deflation and little no growth for the past 20 years.

In Italy the debt as % of GDP is over 100%. In Japan its approaching 200%! There is no hint that either government will commit to any serious reforms to fix their economic problems. And yet despite ALL OF THAT, Japan borrows at rates lower than America and Italy borrows at rates slightly higher than America.

So, if these two headcases of economies can easily service debts much larger than ours as a % of GDP, what makes you think that we won't be able to do the same??

 
At 12/08/2009 2:55 PM, Anonymous Machiavelli999 said...

I am so sick and tired of the whole Fannie/Freddie/CRA caused the credit crisis crowd.

I can spell out the reasons why they didn't, but no one does it better than Barry Ritholz of The Big Picture blog. Barry is no partisan shrill and in the economic blogosphere is considered a pretty harsh critic of the Obama/Geithner/Bernanke policies.

Well, he has spent the better part of the last 3 years, bashing the whole Fannie/Freddie/CRA caused this crisis. In fact, at one point this summer he completely lost it and decided to put up $100k to debate someone

http://alturl.com/jps2

I don't have time to look up every single post he wrote on the CRA but this is the best one right here with links to others. Please just read it through once. I also added an excerpt:

http://alturl.com/o6yf

"I spent a year of my life researching and writing in painstaking details what the actual causes of the crisis were. I put together all of the moving parts as to what the actual causes were — and wrote them up in Bailout Nation, to wit: Irresponsibly ultra-low rates that led to a huge housing boom; a failure by the Fed to supervise non-bank lenders; An abdication of lending standards by both banks and non-banks; Radical deregulation of financial markets; the now discredited belief that markets can self-regulate; a shadow derivative market allowed to operate unlike every other financial product; Compensation schemes that rewarded short term risk taking over long term profitibility; Increases in leverage to the major investment houses from 12-to-1 to 35-to-1; These were the causes of the collapse — not some 1977 legislation.

Its not simply that the overwhelming amount of evidence points to many factors outside of the CRA, the actual results of CRA were minor. Relative to these other ginormous factors, the CRA impact is all but irrelevant. And to date, nobody has produced any data based evidence that the CRA was relevant to the crisis. Not one shred.

Until that evidence is produced, the CRA remains a marker, one that separates proponents of intellectually honest debate versus the parrots of partisan talking points, not worthy of your time or effort."

 
At 12/08/2009 3:04 PM, Anonymous Benny The Man said...

Morganivich:

You miss my point.

Yes, Clinton ran deficits (although even some of the links you give me say he ran a surplus in fy 2000).

But national debt, in relation to Gross Domestic Product, shrank in Clinton's two terms in office.

We were payng our debt down, in relation to our ability to pay.

Again, if you dislike Clinton, you have lots of company. I thought he often reeked of insincerity, even by DC-Hollywood standards.

But his economic track record was a marvel to behold. The Dow tripled, and the federal debt load was relatively diminished. Inflation low, interest rates low. We were a confident and happy nation, economically speaking, in his terms of office. I wish those booms times never ended.

The Bush years were a train wrek in every regard. The Dow sank.

 
At 12/08/2009 3:05 PM, Anonymous Machiavelli999 said...

I can't stop with just that. That post really does completely debunk the "CRA caused the crisis" theory.

I'll just summarize his argument if people are too lazy to click through and read it.

Imagine how a world where the CRA caused the crisis would look like:

As one of many examples, foreclosures would be centered in poor areas like South Chicago, Harlem, DC slums and inner city Philly. Instead foreclosures are concentrated in Southern California, Vegas, South Florida and Arizona.

There are many more examples he cites.

 
At 12/08/2009 3:19 PM, Anonymous Anonymous said...

I can't stop with just that. That post really does completely debunk the "CRA caused the crisis" theory.

See if you can overcome this simple logic:

Mortgage brokers had to be able to sell their mortgages to someone. They could only produce what those above them in the distribution chain wanted to buy. In other words, they could only respond to demand, not create it themselves. Who wanted these dicey loans? The data shows that the principal buyers were insured banks, government sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, and the FHA—all government agencies or private companies forced to comply with government mandates about mortgage lending. When Fannie and Freddie were finally taken over by the government in 2008, more than 10 million subprime and other weak loans were either on their books or were in mortgage-backed securities they had guaranteed. An additional 4.5 million were guaranteed by the FHA and sold through Ginnie Mae before 2008, and a further 2.5 million loans were made under the rubric of the Community Reinvestment Act (CRA), which required insured banks to provide mortgage credit to home buyers who were at or below 80% of median income. Thus, almost two-thirds of all the bad mortgages in our financial system, many of which are now defaulting at unprecedented rates, were bought by government agencies or required by government regulations.

WSJ

Educating leftists is a full time job.

 
At 12/08/2009 3:29 PM, Anonymous Machiavelli999 said...

Anonymous,

Pulling random WSJ Op-Eds doesn't impress anyone. Everything in that op-ed is just a flat out lie. If Fannie and Freddie accounted for most of the subprime loans, then why did these subprime mortgages fill the balance sheets of all the big Wall Street investment banks. Investment banks that were in no way regulated by the CRA.

And let's just address what did the CRA actually say. No where in the CRA did it ever say to abdicate normal lending standards and create a securitization market off of subprime loans. And yet these investment banks bought these securities hand over fist. They then chopped up those securities into other securities and sold them to other clients. None of this was ever mandated by the CRA.

And if we are just going to cut and paste articles into our debates, I would like to submit this for the record.

Assume arguendo that CRA legislation forced banks into making high risk, ill advised loans. And, let’s further assume a huge percentage of these government mandated mortgages have gone bad. The buyers who could not legitimately afford these homes or otherwise qualify for other mortgages have defaulted, and these houses are either in default, foreclosure or REOs.

What would this alternative nation look like?

Given the giant US housing boom and bust, this thought experiment would have several obvious and inevitable outcomes from CRA forced lending:

1) Home sales in CRA communities would have led the national home market higher, with sales gains (as a percentage) increasing even more than the national median;

2) Prices of CRA funded properties should have risen even more than the rest of the nation as sales ramped up.

3) After the market peaked and reversed, Distressed Sales in CRA regions should lead the national market downwards. Foreclosures and REOS should be much higher in CRA neighborhoods than the national median.

4) We should have reams of evidence detailing how CRA mandated loans have defaulted in vastly disproportionate numbers versus the national default rates;

5) CRA Banks that were funding these mortgages should be failing in ever greater numbers, far more than the average bank;

6) Portfolios of large national TARP banks should be strewn with toxic CRA defaults; securitizers that purchased these mortgages should have compiled list of defaulted CRA properties;

7) Bank execs likely would have been complaining to the Bush White House from 2002-08 about these CRA mandates; The many finance executives who testified to Congress, would also have spelled out that CRA was a direct cause, with compelling evidence backing their claims.

So much for THAT thought experiment: None of these outcomes have occurred.

Zero.

In reality, the precise opposite of what a CRA-induced collapse should have looked like is what occurred. The 345 mortgage brokers that imploded were non-banks, not covered by the CRA legislation. The vast majority of CRA covered banks are actually healthy.

 
At 12/08/2009 3:34 PM, Anonymous Machiavelli999 said...

To summarize:

The storyline peddled by "conservatives" goes like this.

The CRA forced banks to lend to communities with no credible borrowers. These poor borrowers who were unable to repay their loans and hence we had a housing bust.

Absolutely nothing like that happened. Foreclosures were mostly concentrated in middleclass to upper-middleclass neighborhoods.

 
At 12/08/2009 3:41 PM, Blogger PeakTrader said...

The Obama spending spree continues. In addition to last week's $30 billion for Afghanistan, attempts to get much more than $80 billion out of U.S. drug firms for health care, and Copenhagen, Obama wants to spend the TARP money (looks like a busy week):

New Obama plans: 'spend our way out' of downturn
Obama outlines new stimulus and jobs plan, says US must still 'spend our way out' of recession
Tuesday December 8, 2009

WASHINGTON (AP) -- President Barack Obama outlined new multibillion-dollar stimulus and jobs proposals Tuesday, saying the nation must continue to "spend our way out of this recession" until more Americans are back at work.

Without giving a price tag, Obama proposed a package of new spending for highway, bridge and other infrastructure projects, deeper tax breaks for small businesses and tax incentives to encourage people to make their homes more energy efficient.

Obama included sharp criticism for Republicans in his speech, accusing them of opposing economic stimulus efforts and his health care overhaul while supporting tax cuts and spending that have ballooned the deficit.

He said that soon after taking office, he and congressional Democrats took "a series of difficult steps" to try to stabilize the financial system and pull the economy out of a deep recession.

"And we were forced to take those steps largely without the help of an opposition party which, unfortunately, after having presided over the decision-making that led to the crisis, decided to hand it to others to solve."

Obama did not say how much his proposals would cost, although congressional Democrats are eyeing a $70 billion package to help create jobs and to provide aid to hard-pressed state and local governments. Administration aides suggested that the part of the package dealing with roads, bridges and other infrastructure could total about $50 billion.

To pay for the new programs, the administration is citing the Treasury Department's report on Monday that it expects to get back $200 billion in taxpayer-approved bank bailout funds faster than expected.

Obama said "These targeted initiatives are right, and they are needed."

 
At 12/08/2009 3:48 PM, Blogger Paul said...

To sum up Machiavelli's debt comments: Bush left Obama a huge debt, which is bad. But Obama can bury us in debt financed at attractive low rates, which is good.



"Absolutely nothing like that happened. Foreclosures were mostly concentrated in middleclass to upper-middleclass neighborhoods."

As the Boston Federal Reserve put it in a massive 2008 study, "In the current housing crisis foreclosures are highly concentrated in [urban] minority neighborhoods." The study found that borrowers in these areas were seven times more likely to be foreclosed on than the general population.

 
At 12/08/2009 3:50 PM, Anonymous Anonymous said...

Obama took over with a deficit already at $1 trillion.

The Democrats took control of Congress in 2007 and have controlled the budget process for FY2008, FY2009, FY2010 and FY2011. The budget deficit started to increase immediately. It increased in FY2008 and in FY2009, when the deficit exploded, they funded the government by continuing resolution to bypass Bush until Obama could take over. After Obama took over they passed an omnibus bill to complete FY2009. So, if Obama inherited a deficit, it was the deficit of 2007. See Chart:

LINK

 
At 12/08/2009 3:53 PM, Anonymous Machiavelli999 said...

To sum up Machiavelli's debt comments: Bush left Obama a huge debt, which is bad. But Obama can bury us in debt financed at attractive low rates, which is good.

Actually, that's a wrong summation. My own personal summation would be, Bush increased the debt as % of GDP during good times which is pretty unprecedented.

Obama has increased the debt during a crisis and a recession which is typical and understandable.

But despite both of these increases of debt, we are still fine and debt is not a problem in the short term.

 
At 12/08/2009 3:59 PM, Anonymous Machiavelli999 said...

Paul,

I love it how the first comment in that link you sent me was.

"This is an outright lie! Shame on you Forbes. Google CRA Foreclosure Rates to find out the real facts"

And so I did. Interesting stuff comes up. One is this report that I knew about and should have cited before by the Fed.

http://alturl.com/tkda

Over the years, the Federal Reserve has prepared two reports for the Congress that provide information on the performance of lending to lower-income borrowers or neighborhoods--populations that are the focus of the CRA.3 These studies found that lending to lower-income individuals and communities has been nearly as profitable and performed similarly to other types of lending done by CRA-covered institutions. Thus, the long-term evidence shows that the CRA has not pushed banks into extending loans that perform out of line with their traditional businesses.

 
At 12/08/2009 4:05 PM, Anonymous Anonymous said...

The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation's banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups ...

City Journal

This prescient article was written in 2000 and foresaw the problems inherent in Clinton's rewriting of the CRA rules. It's true that the CRA was not the only cause of the crisis, but it was the impetus for lowering loan standards and establishing lending targets at Fannie and Freddie. So, yes, the Democrats own this mess - all of it.

 
At 12/08/2009 4:07 PM, Anonymous Machiavelli999 said...

There is not a single link in that entire Forbes article citing any sources. They claim that BAC had a lot of non-performing CRA loans. I find it funny how during the Congressional hearings grilling bank CEOs back in 2008 not a single one blamed the CRA or any government policies.

They brought in Dick Fuld, the disgraced and fired head of defunct Lehman Brother's. This was not a bailed out firm and as everyone knows his firm went under. So, he had all the incentive in the world to blame it all on the government. And one Republican congressman asked him point blank about the CRA. And he said, that he could not honestly attribute any of his bank's lending decisions to the CRA.

If the banks really run Washington like a lot of the Tea Party crowd now claims, why could they not get rid of this piece of legislation like they got rid of much more stringent regulation such as the Glass-Steagal Act.

 
At 12/08/2009 4:22 PM, Anonymous Machiavelli999 said...

This prescient article was written in 2000 and foresaw the problems inherent in Clinton's rewriting of the CRA rules. It's true that the CRA was not the only cause of the crisis, but it was the impetus for lowering loan standards and establishing lending targets at Fannie and Freddie. So, yes, the Democrats own this mess - all of it.

When all facts and evidence go against you, lets just put a blanket statement saying, "See, doesn't this law look fishy. Let's blame everything on this law"

Anyway, put your money where your mouth is and go debate Barry Ritholz

http://alturl.com/336u

He is much better at it than me.

 
At 12/08/2009 4:30 PM, Anonymous Anonymous said...

Don't assume it is low income persons who have low or no taxes.

Income tax deduction for home interest expense on own or vacation home.

401k money which is tax deferred doesn't show up as income.

My seminar, travel, home office, and travel expenses.


Thanks for all the deductions!

 
At 12/08/2009 4:31 PM, Blogger juandos said...

"I am so sick and tired of the whole Fannie/Freddie/CRA caused the credit crisis crowd"...

Yeah I can imagine you are since reality sometimes really sucks...

Anatomy of a Train Wreck
Causes of the Mortgage Meltdown
October 3, 2008
by Stan J. Liebowitz

How The Government Caused The Mortgage Crisis

"When all facts and evidence go against you, lets just put a blanket statement saying, "See, doesn't this law look fishy. Let's blame everything on this law""...

Words of wisdom, words to live by mach999...

Now if you'd only consider taking your own advice...

 
At 12/08/2009 4:35 PM, Blogger Paul said...

Mach,

CRA aside.


Federal Reserve Bank of Atlanta Report
Feb 2009

In the current housing crisis, foreclosures are highly concentrated in minority
neighborhoods, even relative to past foreclosure booms, such as the crisis of the early 1990s.
The first panel of Figure 4 shows the location of Boston foreclosures in 1992. While there
was also clustering of foreclosures in minority neighborhoods during that crisis, it was not
quite as pronounced as in 2007.21

 
At 12/08/2009 5:52 PM, Anonymous Lyle said...

Note that the earned income tax credit is a welfare program run thru the IRS. Lets call a spade a spade there. The earned income tax credit is a remnant of the negative income tax pushed by Nixon.

I agree that given the bend points in calculating Social Security it has strong components of
a welfare program. The formula says calculate your covered earnings average for 35 years with the early years adjusted for wage increases. Given this amount multiply the first 744 by .9 the amount between 744 and 4483 by .32 and that above 4483 by .15. The formula pays out a greater percentage at low incomes than higher ones.

 
At 12/08/2009 6:34 PM, Anonymous morganovich said...

benny-

no, i get your point. i just think that debt to GDP is the wrong metric. it implies we should just keep expanding debt indefinitely as growth continues.

that's poison, pure and simple. the US is not a corporation that has market discipline imposed on it in terms of ROI on funds borrowed and invested. this is just theft from future generations.

the backbreaker issue is that the debt to GDP number changes radically if you include unfunded liabilities.

why should future debts to american citizens like social security and medicare be excluded from national debt?

if you put these back in, i think you'll find that our ability to pay has been declining dangerously.

current external debt + unfunded liabilities is about 75 trillion, well over 5X gdp and a staggering 30+ times government receipts.

would you loan someone uncollateralized money equivalent to 30X their total income? (especially if they are spending more than they earn every year?)

when the medicare and social security programs go bust or drastically cut back benefits (and noting can stop that now) it will be the largest sovereign default in history.

 
At 12/08/2009 7:00 PM, Blogger Walt G. said...

I don't think it's so surprising that the bottom 1/3 of the “taxpayers” pays no federal income tax. The top 1/2 has 87.74% of all the adjusted gross income in 2007 (the latest year available). That just leaves 12.26% of all the adjusted gross income for the bottom 1/2. If the bottom 1/3 was taxed at the federal level, what would they have left to pay their other taxes with? (Source: IRS Website)

There's an old saying, "If you want to catch fish, you have to fish where the fish are at."

 
At 12/08/2009 7:02 PM, Anonymous Anonymous said...

... when the medicare and social security programs go bust or drastically cut back benefits (and noting can stop that now) it will be the largest sovereign default in history.

And no doubt Barack Obama, Nancy Pelosi, Harry Reid and Barry Ritholtz will find a way to blame it on George W Bush. It's amazing to me that people will vote for a party that not only designed these two Ponzi schemes, but demagogue every attempt to rationalize and reform them.

 
At 12/08/2009 7:27 PM, Anonymous Anonymous said...

The top 1/2 has 87.74% of all the adjusted gross income in 2007.

Yeah, and they probably create 95% of all the jobs. They own the vast majority of all the businesses and so directly and indirectly pay those taxes as well.

There's an old saying, "If you want to catch fish, you have to fish where the fish are at."

There's another old saying, "Democracy has to be more than two wolves and sheep voting on what's for dinner."

 
At 12/08/2009 7:28 PM, Blogger juandos said...

Hmmm, I think I understand now where mach999 might be getting his inspiration from if this AP story is the least bit credible...

New Obama plans: 'spend our way out' of downturn

All hail to the Manchurian Cretin!

 
At 12/08/2009 7:47 PM, Blogger Walt G. said...

anonymous 7:27,

I am not making any judgement calls here. I think we all pay too much in taxes, but examining federal income tax alone does not tell the whole story. At the same time, not counting the social benefits received by the low income group as income distorts the analysis, too.

 
At 12/08/2009 8:00 PM, Blogger PeakTrader said...

Juandos, Obama is taking credit for preventing a deep depression. However, the Fed's quantitative easing and TARP, under Bush, likely put a floor on the downturn. I think, all Obama has done is burn money to mostly spin the economy's wheels.

Consequently, the U.S. will be a much weaker engine of economic growth, pulling the rest of the world's economies, for at least a decade.

 
At 12/08/2009 9:21 PM, Blogger PeakTrader said...

Bushisms

"In terms of the economy, look, I inherited a recession, I am ending on a recession."

"So I analyzed that and decided I didn't want to be the president during a depression greater than the Great Depression, or the beginning of a depression greater than the Great Depression."

"I've abandoned free market principles to save the free market system."

"We're fixing to go down to Galveston and obviously are going to see a devastated part of this fantastic state."

"I think it was in the Rose Garden where I issued this brilliant statement: If I had a magic wand -- but the president doesn't have a magic wand. You just can't say, 'low gas.'"

"The economy is growing, productivity is high, trade is up, people are working. It's not as good as we'd like, but -- and to the extent that we find weakness, we'll move."

"I remember meeting a mother of a child who was abducted by the North Koreans right here in the Oval Office."

"And so the fact that they purchased the machine meant somebody had to make the machine. And when somebody makes a machine, it means there's jobs at the machine-making place."

 
At 12/09/2009 9:12 AM, Blogger juandos said...

"However, the Fed's quantitative easing and TARP, under Bush, likely put a floor on the downturn"....

Hmmm, an interesting turn of phrase of PeakTrader and one that I like...:-)

Speaking of 'spinning wheels' consider the following from Dr. Sowell courtesy of the NRO: The Job-Creation Snow Job
Government can’t create wealth, but it can prevent the private sector from doing so.

More Jobs Save Or Created by the Obama Administration?

anon @ 12/08/2009 7:27 PM, nice of you to pick up on that Bovard quote... Timely sir, most timely...

How about this one?

'Once freedom is equated with a certain material standard of living, confiscation becomes the path to liberation'...

 
At 12/09/2009 10:46 AM, Anonymous morganovich said...

juandos-

i like the quote. it's reminiscent of Thomas Jefferson:

"A government big enough to supply you with everything you need, is a government big enough to take away everything that you have...."

 
At 12/09/2009 10:58 AM, Anonymous Machiavelli999 said...

juandos,

I don't know how many people actually click through to all of your links, but I actually decided to. They are all op-eds by conservative "think-tank" guys. And the one about the Manchurian candidate starts out with the most ridicilous line that has been refuted just in the past 6 months:

"He might discourage private capital from entering the financial sector by instructing his Treasury secretary to repeatedly promise a brilliant rescue plan, but never actually have one."

Except, he didn't discourage private capital and the stock market is up 60% since about the time Geithner made that announcement.

And as a free market absolutist, you should really consider this. Me and you are sitting here talking about this with nothing at stake. People who do have money at stake are betting on a recovery. Economists who get paid by clients to make predictions are predicting a recovery. Now, I am not a free market absolutists and I do believe the market can be wrong and often is wrong. But you are a free market absolutist, so listen to the market. The market is saying recovery.

 
At 12/09/2009 12:31 PM, Anonymous Bob Brown said...

Consider the most basic of applicable demographics, the total income of the top 1% of Americans. Consider this graph as a proxy for that:
http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1947-2007.svg

When I look at the second graph presented in your article, I see the "Bush Tax Cuts" as a one time event that shows as an approximately 3% dip between 2000 and 2001. The entire rest of the graph seems to track well the income of Americans.

This is a useful graph, but the **CAUSE** of the shape on this graph is not tax policy, it's demographics.

From the article: "Bottom Line: Taken together, the data in these graphs challenge the rhetoric that the Bush tax cuts were “tax cuts for the rich,”

No, sir, it doesn't. It doesn't support that at all. Or refute it.

Truth and understanding are much more important than one more bash at the greedy tax sucking left.

 
At 12/09/2009 1:10 PM, Blogger Walt G. said...

The title of the post just as easily could be "5 out of 10 Americans Have Almost 90% of the Income." It all depends on how you want to look at it.

 
At 12/09/2009 2:01 PM, Anonymous Anonymous said...

The title of the post just as easily could be "5 out of 10 Americans Have Almost 90% of the Income." It all depends on how you want to look at it.

This really seems to be a theme with you, Walt. Tell me, what moral claim do you, or anyone else on the left, have on the wealth of others?

When you take by force the earnings of another, you seek to make them your slave. I know that the Democrats were the pro-slavery party, but I thought we settled that issue with the Civil War. Will it take another before the pro-slavers get the message?

 
At 12/09/2009 2:53 PM, Anonymous Tony Forcucci said...

It's worse that you think: http://www.anthidote.com/anthidote/2008/10/tax-facts.html

 
At 12/09/2009 5:12 PM, Blogger Walt G. said...

anonymous 2:01:

I don't really care about morals or have any personal opinion about the matter, it's all about numbers with me. It's pretty easy to let graphs and statistics shape your way of thinking if you don't look at both sides.

How can you assume I am on the "left"? I might surprise you if I let my opinion in here.

 
At 12/09/2009 10:30 PM, Anonymous Anonymous said...

A national sales tax or VAT would help correct for this but our politicians would spend that money along with all the rest. High unemployment and then inflation are the results of bad fiscal and monetary choices. We will have them both soon enough. This economy will partially recover but will stumble as the Fed raises rates. Bond rates have to rise substantially with huge government spending. Tax rates will soar and not just on those making above $250,000 per year.

Most Americans do not realize that the federal government has spent 9% more per yr since 1970 than it received. The public debt doubles about every 7 yrs. It will double faster than that with the current politicians in power.

Ben Stein's dad was a famous economist, Herb Stein who said: "If something cannot go on forever, it will stop." When the national debt is $20-40 trillion Americans will decide to tax that 39% who are not paying now. Savers will get 15% on bank CDs and Treasuries like in 1982.

 
At 12/10/2009 4:57 PM, Anonymous Anonymous said...

I think that the number of people not paying taxes is somewhat incorrect, if all they are looking at is the number at the bottom of the tax form. In 2007 I had a credit - but because I had overpaid on my quarterlies! Belive me, I paid plenty of taxes that year....but unless you looked at anything but the bottom line, you might not have known it.....

 
At 12/10/2009 5:02 PM, Blogger dbondu said...

What is outrageous is that ANY Americans pay income taxes. The
16th Amendment was never ratified and the IRS hoaxes the American public out of trillions each year!!

THERE IS NO LAW that compels American Citizens to pay income tax!!!!!

THAT is the freakin' OUTRAGE.

 
At 12/10/2009 5:03 PM, Blogger EPIT said...

Here's a thought.

How about looking at this not from the perspective of how much tax there currently is, but rather, as what is that tax used for? While you could certainly raise taxes and tax more people to increase tax revenue, it seems to me you could reduce the size of the federal government to decrease spending, which would allow the revenue collected today in taxes to go further - and perhaps begin to whiddle away that ever-growing national deficit.

As of December 2008 (this from the government at www.census.org), there were 2.77 million federal employees. In total, those employees were paid a little more than $15 billion dollars that month alone, which is an average federal annual salary of $64K.

I would also suspect that these federal wage earners weren't taken out of the tax figures represented here. I certainly don't think they should be counted since they are paid with tax dollars; taxing employees whose wages come from tax dollars is essentially discounting the salary paid to them. It makes no sense. Anyway, if you took them out (since they're not really paying taxes), the total of non-paying people jumps by 1.7%. That's no longer almost 4 out of 10, it *is* 4 out of 10.

The cause of the deficit is not how much taxes are being paid and by whom. Focusing on that just muddies the waters. The focus should be put on what government spending is driving those revenue requirements. You do that and you'll find a root cause to which a real solution can be developed.

Downsizing the government seems like a good, general place to start to me.

 
At 12/10/2009 5:05 PM, Anonymous Anonymous said...

http://www.reuters.com/article/idUSN1249465620080812?sp=true

Now do an article on how many corporations pay no taxes.

 
At 12/10/2009 5:07 PM, Anonymous Anonymous said...

So basically all the pieces of s--t
who don't pay their fair share of taxes, whatever tax it may be are leaving the burden up to the honest hard working americans who are taxed up the ying yang.
Weed out all the currupt politicians,the rich bastards who find every loop hole to avoid paying taxes,the accountants and lawyers who advise them and the incompetant IRS who by the way target the poor working class and watch the deficit disappear.When the last Nostradamus prediction finally comes, we will all be equal. The way this country is being run and with all the crooks in office armagedon may be a blessing.

 
At 12/10/2009 5:15 PM, Anonymous Anonymous said...

Does anyone on the planet know that CONGRESS is the spending "control" for this country?

Democrat congress in 2006 and problems since - coincidence? I think not.

 
At 12/10/2009 5:24 PM, Anonymous Anonymous said...

FairTax.org

 
At 12/10/2009 5:26 PM, Blogger Derek said...

If we went to a flat tax and abolished the income tax you wouldn't have this situation, a flat tax of X% on everthing. Wouldn't matter if the buyer was rich or poor, white or colored, legal or illegal, everyone would pay the same amount of tax on any particular item. How many Billion $'s a year do you think that it costs to run the IRS? Close the IRS down and save Billions per year immediately!

 
At 12/10/2009 5:40 PM, Anonymous Anonymous said...

Geithner's Toxic Assest Plan is what finally put the floor under and saved a fast sinking ship...anything that tells any of you otherwise should make you look at the timing of his announcement and the rise of the stock market thereafter. In all fair credit, the Bush administration temporarily plugged the leak, but it kept leaking after their term ended.

 
At 12/10/2009 5:58 PM, Anonymous Anonymous said...

I'll try to make this as short&sweet as possible. Out of all the posts here, only one person has got a clue about what is going on.
I can't believe you all don't know what Federal income tax is, and where ALL that money goes.
None of us should be paying Federal income tax. Only Corporate Federal income tax is Constitutionlly legal. Before 1913, Congress had the power to print money and regulate the value of it. When the Federat Reserve was born in 1913, Congress unconstituionally gave that power to the Fed. which is a PRIVATE bank having nothing to do with any government agency. In so doing, the government now had to borrow money from the Fed. to run the government, and pay them intrest on that money. That is what Fed. income tax is. EVERY single cent of it since 1913 has gone to the intrest only on the money the government borrows to run itself, not any public services or reduction of any debt. Do a little research and prove this to yourself.I already have, it's not hard to do. Maybe then you will point your finger at the source of the problem, not the Rep. or Dem. parties. End the Fed. downsize the ever expanding goverment agencies, and you have solved the problem.
Once again, the Federal Reserve Bank is a private bank, this is a well known FACT. Prove it to yourself, don't take my word for it. Anonyamous

 
At 12/10/2009 6:17 PM, Blogger wilgilb said...

Absolutely FALSE.
ALL Americacans pay the the invisible tax called inflation, or the intentional devaluation of the dollar. Our Keynesian system punishes the savers, who are typically poor, and rewards the debtors, typically richer.
The right question would be what % of the top 10% pay no, or less % taxes than someone earning $50,000.
Another question would be, what proportion of the US gross income do the top 10% earn in proportion to their taxes paid.
And, what is the median income.

 
At 12/10/2009 6:45 PM, Blogger Walt G. said...

wilgilb:

The median income (AGI) reported to the IRS in 2007 was about $33,000. (half of the people who filed returns made more and half of the people who filed returns made less). The top half had about 87% of all the adjusted gross income and paid about 97% of all the federal income tax.

The botton half usually pays the same or a a larger percentage of their income in most state income taxes, sales taxes, gasoline taxes, property taxes, and Social Security tax than the top half (some people think SS is not a tax).

I guess if you wonder if all of that is "fair" depends on which group you are in.

 
At 12/10/2009 6:54 PM, Blogger wilgilb said...

Absolutely false.
ALL Americacans pay the the invisible tax called inflation, or the devaluation of the dollar. Our Keynesian system punishes the savers, who are typically poor, and rewards the debtors, typically richer.
The right question would be what % of the top 10% pay no, or less % taxes than someone earning $50,000.
Another question would be, what proportion of the US gross income do the top 10% earn in proportion to their taxes paid.
And, what is the median income.

 
At 12/10/2009 7:01 PM, Anonymous Gladys Stein said...

I have a an idea! Let's hand out social security numbers like they were candy to current illegal immigrants... Roughly 31% of the US population is a conglomerate of illegal immigrants... either here after expired visas or here without one in the first place. The majority of their families are on multiple forms of social assistance. Not to mention the obvious homeland security risk this poses not knowing who is here and where they are. Here is your social security number. Thank you very much for coming to the United States of America... see you on April 15th. Oh... and by the way... has anyone in Washington caught on to the fact that the 7 year NON taxable period for start up new immigrant (legal) businesses never ends... at the end of the term, the next available relative comes in and purchases the business. The seven year non taxable period begins again...

On another note...When will the bloodletting cease?? There goes what net income is left... I'm sure I've left out a few...
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Ta x (44.75 cents per gallon) Gross Receipts Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Service Charge Tax
Social Security Tax
Road Usage Tax
Sales Tax
Recreational Vehicle Tax
School Tax < BR>State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Non-recurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax

 
At 12/10/2009 7:05 PM, Anonymous Anonymous said...

The fact that so many folk pay no taxes has absolutely nothing to do with Bush or his tax cuts. Don't believe me? Take a few cycles and check out the link given in the article (http://www.taxfoundation.org/files/ff202.pdf). The fact is that there have been at least 16% non-payers every year since 1950.

 
At 12/10/2009 7:28 PM, Blogger wilgilb said...

Absolutely false.
ALL Americacans pay the the invisible tax called inflation, or the devaluation of the dollar. Our Keynesian system punishes the savers, who are typically poor, and rewards the debtors, typically richer.
The right question would be what % of the top 10% pay no, or less % taxes than someone earning $50,000.
Another question would be, what proportion of the US gross income do the top 10% earn in proportion to their taxes paid.
And, what is the median income.

 
At 12/10/2009 7:57 PM, Anonymous Anonymous said...

Machiavelli999 makes an critical misstatement. Bush did not implement tax cuts - rather he implemented tax "rate" cuts. That is an important distinction. Tax rate cuts generally, and almost always, result in increased tax revenue. Conversely, tax rate increases have the opposite effect. Regardless of that, however, is the fact that our government spending is totally out of control. No matter how much revenue is collected, Congress will spend far more than that.

 
At 12/10/2009 8:08 PM, Anonymous Anonymous said...

All this talk about who pays how much is interesting...and it's Congress and the lobbyists who spend the money received. During a recession, tax revenues decrease...but go to a site called
Fairtax.org, and see what abolishing the Income tax, the corporate tax and all the other "income-related" taxes could accomplish, besides encouraging investment versus consumption...no FICA, no 66000 pages of Treasury regs re income taxes, and every citizen would receive a "prebate" based upon an average income...so unlike a flat or VAT system, the working poor or jobless wouldn't get killed.

 
At 12/10/2009 8:09 PM, Blogger Kevin said...

The administration seems to feel the answer is to tax the rich. There is a point of diminishing return-when I've made 150k I'll just stop working. I can't think of anyone less deserving of the money than the federal government-unless it might be one of my child swapping section 8 tenants. Now I bet they fit into the 4 out of 10 category.
Kevin

 
At 12/10/2009 9:04 PM, Anonymous Anonymous said...

I am not American, but I have lived and worked ( legaly )in your country. If you want to survive in the future you all need to find what you can agree on as opposed to where you differ. The westtern life style is no longer sustainable. Arguing about who's fault it is, is wasted energy. Learn to reduce,reuse, recycle and you have a chance. If not you are just another dying empire.
Chris

 
At 12/10/2009 10:19 PM, Anonymous Anonymous said...

Well if all you stupid white people would stop paying taxes then we would all have aqual rights, because we would be paying the bills for the scum that don't want to work plus it is unconstitutional to have to pay taxes but your BS goverment picks and choose what they wan't you to pay for. Its funny illegals arn't suppost to be in this country but they are that unconstitutional and until they would exicute the scum on death row, make all the illegals leave, cut off welfare I will not pay a dime of taxes so pick and choose that scumbags.

 
At 12/11/2009 12:21 AM, Anonymous Anonymous said...

As a few belatedly point out above, the premise that 'only 30+% of Americans pay income tax' equates to 'freeloaders' on the 'system', is in itself the crux of the problem. They are not 'freeloaders', the GOVERNMENT AND POLITICIANS ARE THE FREELOADERS!!! And, as mentioned, the income tax is UNLAWFUL, not ever assigned enacting regulations by congress, and which applies only to select gov't officials and corporations. "Income" by legal definition is the 'profit of a corporation'...ARE YOU as an individual, a 'corporation'?? And true, the tax collected unlawfully (one gives the fed authority to collect the tax when the 1040 is signed 'under penalty of perjury' ...you just signed away your 5th amend. rights against self incrimination, admitting your liability), goes to pay the interest on the debt to the fed, not paying into programs or the national debt. End the Fed. Reserve, abolish (repeal officially, as it was never properly ratified in the first place) the 16th amendment, which HR25 specifically requires, along with enacting the FairTax, which is a CONSUMPTION tax, NOT a 'FLAT TAX'!...big difference, and one that is often misquoted and misunderstood. Wouldn't you enjoy life more if April 15 was 'just another Spring day'??!! That's what the FairTax plans to create for every American. Get educated, push your legislators to support it (MANY already do...see their sponsor list)and promote it to your friends and colleagues, online contacts, and all. Now is the time we need this to pass, for the 2010 elections, and we will see the economy rise up, quickly! again. Do some research on this, at FairTax.org. Cato and Heritage and other universities (Cornell, and others) have researched this plan and concept for many years, spent millions on it, and have concluded that it is a good plan, and one that should be adopted, if we wish to draw investment and industry back to the US.
FAIRTAX.ORG

 
At 12/11/2009 7:32 AM, Anonymous Anonymous said...

As a business owner and withholding taxes for employees I see some real concerns about how our tax base is being eroded. First off when you have a employee that has zero dollars taken out of his check every week for taxes you get a little concerned about the tax base. Then when tax time comes around the same individual get $6,000 to $8,000 dollars back. Now that is definately a hindrance to our cash flow. There are too many individuals in our great country that are not helping with there share of the taxes. With that said if things keep going the way they are going then our tax base is going to erode to the point where the amount of income from taxes will not be enough to get us out of debt.

 
At 12/11/2009 10:04 AM, Anonymous Anonymous said...

There is no excuse for what the president and our elected representatives are attempting to do. Raising our taxes while 32% of the population pays no taxes is ridiculous. The only 'fair' tax in my view is a consumption tax. At least that way the people that live well would pay the most taxes. Graduated income tax is totally unfair, and in my view, un-American.
Our government officials need to stop inventing more stupid social programs, stop spending money we don't have, cut taxes to business, cut income taxes. These are the things that stimulate an economy, not trying to spend our way out of a recession. What a bunch of idiots we have running our nation.

 
At 12/11/2009 10:31 AM, Anonymous Anonymous said...

First off when you have a employee that has zero dollars taken out of his check every week for taxes you get a little concerned about the tax base. Then when tax time comes around the same individual get $6,000 to $8,000 dollars back. What amazes me is this individual makes $16.00 a hour and has filed bankruptcy twice and is on goverment assisted welfare. What is wrong with this picture?

 
At 12/11/2009 5:10 PM, Blogger max said...

NOBODY should pay income taxes, so the goal should be to increase the percentage of non-payers to 100%.

Also, never forget that everyone who receives a paycheck pays:

- social-security taxes
- medicaid taxes
- medicare taxes
- sales taxes
- transfer taxes
- huge gasoline taxes
- 100s or 1000s of other taxes

 
At 12/13/2009 1:47 PM, Anonymous Anonymous said...

The real problem is that most people do not know they are taxed. To change the system, eliminate withholding on the paycheck. Make everyone write a check at the end of the month to the appropriate federal and state government, to pay their taxes. It would not take long for congress to get the message.

 
At 12/23/2009 1:25 PM, Anonymous Anonymous said...

The IRS system is antiquated and has 65000+ pages of tax laws that nobody understands. Abuse is rampant in reporting taxes, just ask some of Obama's CZARS. Everyone should have to pay some taxes and the only way that would honostly do this is the FAIR TAX(CONSUMPTION TAX.) This would fill the government coffers and eliminate the IRS and the 16th amendment. HR 25 will explain this to you or read the book! Congressmen and lobbyists will fight this fair system. Why? You guess.

 
At 12/29/2009 2:15 PM, Blogger Ed said...

Well, I almost made it to the bottom of the page. Axes to grind?
For sure! Really am not against grinding of axes, but to argue the fine points of the matter of $ (ie., taxes, deficit spending, Rep's vs. Dem's, who did what to whom yada yada) is, as one Anonymous person said, irrelevant.
There are two issues here--both which stem from the same core problem. We American's (humans really) ability to self-deceive. It is an issue of simple hypocrisy.
Can we ever get something for nothing? Pols as well as regular people have been playing this shell game here for 200+ years. A lot of folks had to die to stand up to an imperial power who taxed us illegally--result? USA. Private interests in 1913 scammed and crammed two inherently undemocratic edicts down our throats--Income Tax and the (UN-) Federal Reserve. Both are undemocratic and illegal and, while there ARE certainly other issues with freeloaders, illegal immigrants, govt and other corruption, THE REAL ISSUE IS ARE WE GOING TO ALLOW OURSELVES TO HAVE OUR LABOR AND OUR FREEDOM TO BE TAKEN AWAY AGAIN? Or am I missing the point; have we already lost it? Anonymous is right; we need to intensely lobby for any bill that will ultimately limit and finally do away with both the Federal Reserve and the income tax.
Both can and should be replaced to bring at least a semblance of integrity back to our national and worldwide monetary system.

Edward

 

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