CBO study shows tax breaks for multi-national corporations and wealthy will cost us $12 trillion over the next decade.

                   A new report from the CBO shows that the top 10 U.S. tax deductions, credits and exclisions ensure that over $12 trillion in tax revenues will be gifted to multi-national corporations and the wealthiest Americans over the next decade. Nearly all of the benefits will be accrued by the wealthiest Americans. The tax loopholes have been written into the tax code by a bought and paid for Congress, that recieves its marching orders from multi-national corporations and wealthy Americans that dominate campaign finance.

The study shows that the top 20% of American income earners will recieve more than half of the $900 billion in benefits from the inexcusable tax code in 2013 alone. Adding insult to injury, 70% of the total benefits go to the top 1% of income earners. The study was requested by House Democrats.

Democrats say the results support President Obama’s approach to tax reform and defecit reduction. Raising revenues by closing tax loopholes and deductions that are being abused by the wealthiest Americans. The National Debt is $16 trillion and we will lose another $12 trillion in tax revenues over the next decade, that equals $28 trillion without adding Government spending. If we close half of those loopholes that will nearly cut the National Debt in half, although it would nevet happen that way. Why are Republicans fighting against Tax Reform like this, when they claim the National Debt is a priority? Is it the Grover Norquist anti-tax pledge or the hate for President Obama?

3 of the top 5 tax breaks, a $2 trillion exvlusion of net pension contributions and earnings over a decade, the $1 trillion deduction for mortgage interest and the $1.1 trillion deduction for State and Local Taxes also disproportionately benefit the top 20% of income earners. The Republican party likes to pretend the middle class is swimming in government aid. These tax breaks that benefit only the wealthiest Americans are blowing up our defecit and those who need it least.

13% of those tax breaks will go to the middle class and 8% to the lowest income bracket. This again shows a disproportionately large gap between the haves and have nots. This will continue the growth of incone inequality in our country. The larger the incone inequality, the more it hurts our economy and our National Debt will continue growing.

These things are in plain sight. A look into recent history shows that the Republican economic theory doesn’t work. They do not seem concerned with the outcome, as long as they and their corporate sponsors aren’t effected. This is a horrible way to run a country. Eventually even the wealthy will be effected by this economic theory. Republicans will cut off their nose to spite their face when it comes to President Obama, their hate for him blinds them.

My Father-in-law says it best. The Republicans only care about the rich and the Democrats take care of the rest of us.

Income inequality.

                  We are close to having the worlds most unequal weath distribution. Among countries with at least a quarter million adults only Russia, Ukraine and Lebanon are more unequal, according to the most recent figures from Credit Suisse Research. Denmark and Switzerland were more unequal in an earlier report, Switzerland now ranks 18th.

            Wealth accumulation has been rigged for the rich. The Bush tax cuts directly helped the wealthy, the use of loopholes, tax havens and a general manipulation of the tax code have all contributed to the inequality. The richest 20% owns 93% of the wealth. Anyone that is making over $10 million generally gets half of their income from capital gains and dividends. The effective tax rates  on capital gains and dividends is 15%, which is well beliw the current 37% income tax for that bracket.

                 The top 1% of wealthy Americans controls 43% of the wealth. While the bottom 80% control 7% of the wealth. The wealthiest 400 Americans have the same combined wealth as the poorest half, over 150 million people. The income going to the top 1% (18%) is at its highest since 1979. While the share going to the middle fifth is at it lowest during the same period at about 15%. Average incomes for the top 1% grew about 300% since 1979, compared to 25% for the middle income and 16% for the bottom rung.

               Although there has always been income inequality in America, it has grown exponentially causing this great divide. Income inequality effects upward mobility, severely limititing chances for the poor. The poor go deeper into debt trying move upward, mostly through college or starting a small business. Some scientists believe income inequality effects health, creating more health problems for the poor. This decreases workers efficiency and increases spending on health care, which in turn diverts money from saving and investment.

              It is also said that crime and teen pregnancy which are normally associated with poverty, actually have a stronger correlation with income inequality. The inequality also has adverse effects on children, especially education. The poorer the state the more dropouts, less up to date books and computers. Making it more difficult to adjust to a fast pace, normall state of the art college courses. There are more homocides and mental illness in very unequal countries.

             This post does not answer all the inequality questions. It just basically touches upon them and creates a very depressing view of America. Republicans and Democrats do not seem worried about the same things as the rest of us. Republicans continue to grow the gap and Democrats do nothing to stop it. A country is not judge on how it cares for the wealthy, but for how it cares for those who are not wealthy. Isnt that why people immigrate here, for the upward mobility that doesnt ecxist.

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Paul Ryans budget, more of the same.

              The Republican budget proposal for fiscal year 2014 purports to balance the budget  in 10 years. With a stronger economy and new revenues from the fiscal cliff deal, the task of balancing the budget is somewhat easier. This budget is eerily similar to other budgets proposed by Paul Ryan. It of course attacks the poor and seniors, while giving more to the wealthy and corporations.

              In February the CBO released a baseline projection for the next decade. The fiscal cliff agreement allowed tax rates on the highest incomes to revert to Clinton era levels. In the process this helped reduced future deficits. Paul Ryan voted against that deal.

              The new budget proposal hits all GOP talking points, less spending, lower taxes and a rejection if most of President Obamas health reforms (ACA). Balancing the budget, Ryans proposal doesnt detail all of the assumptions about economic growth or when some of his proposals go into effect. Ryans plan leaves the countrys accrued debt at just under 55% of GDP by the end of the decade. The CBO estimates it as 77%. The CBO wont analyze Ryans or Patty Murrays budget proposals since each simply propose actions and does not detail legislative changed for hitting those targets. Ryan estimates his proposal will grow spending at 3.4% per year, not the projected 5% His plan would put spending at $985 billion below CBO estimates by 2023.

               He wants to reform Medicare. Starting after 2024 it would become a,premium support system. Future seniors could choose between traditional fee-for-service Medicare and the premium support system. This would offer seniors a fixed amount of money to buy private insurance. Ryan proposes converting federal Medicaid funding for states into block grants and repeals health reform laws expansion of the program to low income , non elderly adults. Block grants could increase the burden on states, but gives the states more autonomy about how to set up Medicaid programs. Ryan would also convert food stamps to block grants to states and change eligibilty by imposing time limits on participation and work requirements.

           Ryan would raise the sane amount of tax revenue as the CBO, it would total $40.241 trillion. Ryan would simplify the tax code , reducing the individual income tax brackets to 2 ( 10% & 25%), repeal the Alternate minimum tax, lower the top corporate tax rate to 25% and change roles for international taxation. The 25% upoer tax bracket is about 13% less than they are paying now. This equals to another tax cut for the wealthy.

                   Like Ryans other budget it relies on spurrious budget trickery. His past budgets have also included lofty rhetoric on spending cuts, but little details. He assumes the repeal of Obamacare, but uses the savings from it to balance the budget. This typical Republucan tomfoolery, there us nothing serious about this proposal, they know it cant pass. They set tge numbers so far right that even meeting them in the middle gives the party that lost the ekection the power. The Democrats, mainstream media and the Democrat party have to stop this crazy train in its tracks.

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The budgets presented this week will be nonsense.

                   Both political parties, Democrat and Republican, are going to present budget proposals that are D.O.A. What is the point of proposing something that offers no compromise? The Democrats have yet to present theirs, so I am jumping the gun a bit. I dont understand why our two party system cannot compromise. It is ridiculus already.

               Paul Ryan presented his budget today, which is basically a carbon copy of his last budget. He gives the wealthiest Americans another tax break, lowering it from 37% to 25%, puts corporate taxes at 35% and of course attacks entitlements. He says he is looking for a balanced proposal, but please remeber we have gotten $2.50 in spending cuts compared to $1.00 in higher taxes under President Obama. Ryans budget ,which I will write a more involved post on later, works under assumption that the ACA is repealed. Yet he uses the savings from the repealed ACA to pay down budget.

                  Looking into my crystal budget ball I will make a few assumptions about the Democrats budget proposal. Of course they are going to call for more revenue from closing tax loopholes. Probably raise the corporate tax rates and try to reform entire tax code in order to close overseas tax loopholes. I do not think they are going to offer any more cuts to “entitlement” programs. I am not sure if this is right but income inequality is at one of the highest levels in our history.

              All the same good points and bad points aside, there seems as if there is no chance of either bill passing.  Now please remember these are proposals, so their is not any information on what legislations would be changed. I support President Obama, but if he keeps giving in to cuts to programs that help people he will be deemed a failure. On the other hand why do Paul Ryan and the Republican party insist on creating manufactured issues.

             These are the reason people distrust Congress, Republican party and voted overwhelmingly Democrat. Republicans continue to get boxed in by the Tea Party. Just the other day Ted Cruz (R-Tx) and Mike Lee (R-Ut) said they would hold up vote to stop government shutdown unless the ACA was repealed. Again the extremist in Congress are trying to hold Americans hostage. But keep putting out unpassable budgets.

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Tax code, yet another break for the wealthy.

                 President Obama was swept into office for his second term partly on the promise of raising taxes on the wealthy. He accomplished some of that in the fiscal cliff deal. But the,dollar for dollar cuts to spending Republicans clamor for doesnt work the way they want. We have gotten $2.50 in spending cuts to every $1.00 of extra revenue, so Republicans are right. Cuts and revenue should match dollar for dollar. Closing loopholes would be a goid start.

             If Congress can fix the tax code by getting rid of decades of deductions, exemptions and other give aways, they could actually lower taxes and balance the federal budget. From tax free saving accounts to deductiond fir gifts to charities, these uncollected taxes amount to a giant pile of stealth government spending. Some deductions come by accident, unintended consequences of adjustments to the tax code. Lobbyist fought for many others and many wealthy industries benefit from it.

            In 2012 tax breaks totaled more than $800 billion or about 1/3 of the federal revenues. Thats more than the government spends on Social Security, Medicare or National Defense according to the CBO. Cutting these on full would go a long way to closing the federal deficit, $1.1 trillion.

                 Most federal revenues come from personal and corporate income tax. Payroll taxes fund Social Security and Medicare. Most originally came from taxes on luxury items such as tabacco, spirits, sugar and throughout the 19th century they came from tarriffs on manufactured goods that were imported. The income tax was introduced during the Civil War and did not become permanent until the 16th Amendment was ratified in 1913. During WWII income tax became what it is today, a mass tax on the moddle class.

                The payroll tax is 15.3%  and all earners pay it. The 12.9% Social Security tax only applies to wages below $87,900 – meaning that a $25,000 a year earner pays a higher effective tax rate than somepn making $250,000, because most of the $250,000 is exempt. Investment income and employer benefits, which accrue disproportionately to high income eaeners go completely untaxed. People who live off of inhereted wealth pay no pay roll taxes at all.

           At one point John Boehner agreed with President Obama that tax reform and a limted rate increase could generate almost $1 trillion and reduce the debt. He and the Republican party pulled the offer from the table when the President and the Democrat party won $600 billion in the fiscal cliff deal. Republicans are standing behind the mantra of no more tax increases. So I guess the fiscal watchdog Republicans dont want to lower the National debt.

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