Bolton Sign

Boles-Simpson didn't have any support because it's 5 trillion in deficit reduction over 10 years goes against both parties long standing modi operandi. In other words, any member of congress who would support it would become a hypocrite due to it's conflict with their party's morals and dogma. That's not saying the tenets of the plan would not work to reduce the deficit, only the members of both parties don't work together. BS, no pun intended, calls for more changes with income tax than Medicare, including changing marginal tax rates, eliminating the alternative min. tax, eliminating expenditures for income and payroll tax, reducing discretionary spending, and overall tax hikes. The argument Medicare will cause financial ruin is based on half truths and has incorrectly been used by both parties to increase the divide. BS is more about income tax as I read it back in 2010. I do recall the buzz of the media was hot with Medicare talk back then. We the people don't constantly argue about much. Constituents of the extreme wings are so mired with propaganda there is no middle of the road for them. While the independent voter will decide which extreme is elected, it's more important to break the spell which holds the far left and right from actually thinking about what's being proposed. Indeed, who has the clout to enact any level headed legislation?

It's definitely not that simple. First off this is old. It used to be falsely attributed to a few different economics/accounting professors. Some we’re made up and others got pissed off their name was used. It also ignores basic elements of what makes our American version of capitalism work. All of these guys are going to the same bar? The story is implying rich and poor all march arm-in-arm to the same bar to have a sociable drink together. Reality: -one goes to a private club, where he drinks rare single malt -the next goes to a high class bar where he has a martini -the next has a glass of respectable wine at a nice bar -the next has an imported beer -the next couple of guys domestic beer -the next couple stay at home and drink tap water -the last drinks from a water fountain in the park before trying to find a homeless shelter with an open bed for the night Overall income tax is simple, but most people don’t understand how it works. Even more surprising are the rare few who know what it’s TRUE intent was back in the early 1900’s. When the bill first went through congress and was signed into law by the president, it’s original intent was to be a tax on the rich. It also had language that it was never to be changed from it’s original intent. It was supposed to tax the top 1-4% of earners in the country because they we’re the most able to pay and should be called upon to contribute to the common well being of according to their capacity. That being true it was levied exclusively on the richest Americans. The income tax was also part of an effort to dismantle America's Protectionist policies. At the same time the income tax was passed congress lowered Tariffs from 40% to 25% as well. This was the beginning of the dismantling of the American System of Economics as a whole. Since it was signed into law there has been a sustained political effort from those at the very top to spread the income tax burden to the rest of the classes. The reason the super rich wanted to do this isn’t complicated to understand. Considering they understood that the more the average person had to pay income tax, the less pressure would come on the shoulders of the super rich. Also, even more important, the super rich understands that the more the tax is spread across a bigger percentage of the middle the more likely most average people would become their allies in arguing against an income tax increase. Stories like barstool economics are nothing more than slick pieces of propaganda. The story says in so many words that when there is a tax cut given, the $20 discount, and the overwhelming majority of this goes to the richest person and proportionally to everyone else. This just isn't the case. You have to understand marginal tax rates to get this. It’s not that it’s complicated but most really just don’t get it. Pardon me if you already know this. Basically everyone is taxed the same on their first 50k and so on. However the majority of tax payers only make $60,000 per year. The top earners, rather the top tax bracket, is 35% of that last value of income over the preceding bracket. The top bracket doesn't mean you pay 35% of everything you earned. There were periods of years that the richest people we’re paying up to 80-90% in the very top marginal brackets. After WWII the tax laws were paired down repeatedly, with the largest single tax cut coming from Reagan in 1986. He cut the top rate from 71% to 35%. Reaganomics. While this was a great cut for the super rich, there was no comparable cut for the middle class or the poor; not in any way proportional to the staggering cuts for the rich. Another major failing of this fable is it compares the rates of taxes and how that somehow applies to all of the men in the bar. It's not that simple. Very few wealthy people actually pay the stated rate of tax. While everybody technically has the ability to use the following advantages, realistically only the super rich can access them to any significant degree: 1.) make claims for exemptions and deductions of all sorts and 2.) seek out the help of a tax lawyer, tax accountant, tax advisor, or a financial consultant. Warren Buffett has said “My secretary pays more tax than I do” His secretary pays a tax rate of 35.8 percent of income the top rate, while Buffett pays a rate at 17.4 percent. Obviously his secretary makes over $150k per year. Even so, she can not afford to pay for or even need to seek out tax advisory expecting to lower her rate to 17.4 percent. This is something the very wealthy can and do, paying 30-50,000 dollars to save millions. Another quote from Buffett "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning." The last part of this story really doesn't make any sense to me. Most of the overseas locations that seem friendlier all have less of an income gap, better and cheaper healthcare, and longer life expectancy. The ten guys are not realistic representation of an economic cycle. It's not even a capitalist system which is being implied by the story. (each gets all he wants to drink irrespective of ability to pay.) In realtiy the group would never actually pay the full tab because the deficit would increase the amount they owe the bar tender until he refuses to serve them. Bringing in the 20% discount brings up the big question of the fairness of income gap and would result in bar fight brawl to the death or robbery of the man with the most money. The rich entrepreneur takes the financial risks and creates the jobs that produce the goods, the "poor" man (woman) sells his talent and time and buys what the economy produces and the system thrives. I thought that the American ideal is to provide the foundation of opportunity. Capitalist right? The wider the divide between rich and poor, the less such opportunity exists. Things historically have gone wrong when the opportunity gap widens and the rich can shift their risk to the middle class and the poor. Sometimes it's difficult to not to get caught up in the political hype. You've got the right fright puppets and the left dense zombies barraging people with inaccurate information and it only takes a clever piece to go viral. There's a lot of strengths this country has and it's primarily the working middle class which make up the majority of people. Obama has got some terrible policies. Yet taxing the rich is not one of them. JB