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in a New York Times blog post titled More Chips For Tax Reform.  In case you do not recognize the name, Rattner is a long-time Wall Street player who served as the "car czar" in the first Obama term and currently chairs Willett Advisors LLC, the investment firm that manages New York Mayor Michael Bloomberg's personal and philanthropic assets.  He also is highly visible as the economic analyst on Morning Joe.  Thus when he discusses raising some taxes, it carries a great deal of weight.

Consider his opening paragraph:

Almost lost in the tug of war over whether the top income tax rate should be 35 percent or 39.6 percent is another consequential tax issue: the proper rate for capital gains and dividends.
.   This establishes the framework for his presentation, in which he comes to the conclusion that the President' proposals  to eliminate the special treatment of dividends and raise the Capital Gains rate from 15 to 20% is insufficient:  
Personally, I would go further and raise the capital gains rate to 28 percent, right where it was during the strong recovery of Bill Clinton’s first term, and grab hold of a total of $300 billion of new revenues over the next decade.
 For those who complain that this, along with the about to be in effect 3.8% Medicare tax on unearned income, would serve as a disincentive to investment, he responds
Put me down as skeptical about such dire forecasts. During my 30 years on Wall Street, taxes on “unearned income” have bounced up and down with regularity, and I’ve never detected any change in the appetite for hard work and accumulating wealth on the part of myself or any of my fellow capitalists.
There is much more.

Using as sources the Treasury Department, the Tax Policy Center, and the  Joint Committee on Taxation, the article is accompanied by a chart which notes the following amounts of revenue that could be raised over a decade by each of a series of tax proposals, the figures in billions of dollars:

Increase tax rates on top 2%                                442

$25,000 tax on deductions except for charities      885

28% limit on tax benefit from deductions              584

Tax capital gains at 20% and dividents at 39.6%   242

Buffett Rule (minimum 30% tax rate on                160
        Americans making over $1 million)

Carried Interest taxed as ordinary income                13

Rattner goes through each of these proposals in his text, for example on the subject of "carried interest" which is currently taxed at the 15% capital gains rate:  

As a beneficiary of the carried interest loophole, I’ve seen firsthand the lack of any difference between the work involved in generating a carried interest and the work done by millions of other professionals who are taxed at the full 35 percent rate.
As for capping deductions in some fashion, he would apply this not across the board as Romney proposed, but only to high income families, noting
The highest-income Americans don’t need tax-free health insurance, mortgage interest deductions or deferred taxation on retirement funds.
Rattner also provides us with rhetorical ammunition:  
These types of tax changes would have the ancillary benefit of defusing a specious argument that conservatives love to make: that raising the top rates on ordinary income would hurt small business.

Certainly no small business can claim to be damaged by a higher rate on dividends or capital gains or by the proprietor’s losing some tax deductions.

If you have read Rattner's article, what I have offered so far may seem unnecessary, and I would agree.  He write clearly, and with the authority of someone who knows the system and also understands that his own taxes would likely increase were these proposals to be put into effect.

Let me offer a few more observations.

First, we need to have a much clearer definition of what a "small business" is.  It should NOT be defined merely by the number of employees, as the likes of John Boehner, Mitt Romney, and others are prone to do, but rather in terms of revenue generated.  Remember the famous picture of the early days of Bain Capital Management"?
romney-bain-capital-money-shot_0
There are only 7 people in that photo, which qualifies it as a small business under current rules.  The organization of Bain is such that with the multiple subsidiary organizations each having only a handful of "employee" the entire wealth it controls could be classified under rules of small businesses.   But its function is not job creation, merely wealth creation even at the expense of the destruction of jobs-  by "harvesting companies" as Romney himself said at one presentation.

Second, I do NOT believe we should be moving towards what will be an unacceptable version of a "Grand Bargain" in the lame duck.  Besides the fact that the expiration of the Bush tax cuts changes the political framework drastically, there is also the reality that we just elected a new Congress whose membership is significantly more progressive than the outgoing Congress.  The President ran on tax issues, twice, and the voters have this time by choosing more Democrats (with those Democrats including real Progressives like Alan Grayson and Elizabeth Warren) while Blue Dogs suffered further losses (Ben Chandler) affirmed their desire to see the wealthy pay more before the social safety net is shredded.

Third, we need leadership of the President's economic team that understands all the realities of which Rattner writes so persuasively, hopefully someone who knows how to communicate - on television and to Congress.  

Perhaps by now you can see where I am going with this.  Do nothing before the first of the year.  Replace Tim Geithner at Treasury with Steven Rattner.  Let him move an agenda such as that he describes in this post.  He has a track record of success in the auto bailout, and that auto bailout clearly gave Obama Michigan and Ohio, and probably Pennsylvania and Wisconsin as well.  He understands the finances of the proposals, which he can explain clearly.  He is a good communicator.  He can rightly point out that what he proposes will raise his own taxes.  He understands the system.

At a minimum, we should ensure that all who will be participating in discussions about a Grand Bargain grasp Rattner's argument.  How much better might it be were he the one pushing forth these items, perhaps by putting them all on the table -  now that might really scare some Republicans, especially if done in the context of having let the Bush tax cuts expire so that they are in the position of defending a series of tax breaks for the rich and already overprivileged at the expense of ordinary folks, of whom there are many more.

Just a thought.

Do with this what you will.

Peace?

Originally posted to teacherken on Sun Nov 25, 2012 at 03:47 AM PST.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  Tip Jar (130+ / 0-)

    "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

    by teacherken on Sun Nov 25, 2012 at 03:47:26 AM PST

  •  I completely agree that we need to define (54+ / 0-)

    small business in terms of revenue and not in terms of numbers of employees. When most of us think about small business, we mean the local hardware store of beauty parlor. We re not talking about firms like Bain Capital, which may have only 7 employees, but all of whom earn multi-million dollar salaries.

    •  It is an interesting subject. (15+ / 0-)

      I think there are both employee and revenue implications of what the threshold of a non-small business should be. In many, many, probably even most mature (e.g., consolidated) industries, a business with 300 employees and $70M in revenue is considered a small business...

      And perhaps a third metric should be $ revenue per employee, and a fourth could be the value of the top compensation package.

      For example, one model could be, if a business exceeds one of the following, then it is not a small business:

      1) 400 employees
      2) $100M in gross revenue
      3) $250K per employee
      4) $2M top compensation package

      Another metric could be market share...

      And then there might be a value in defining a VERY SMALL business for those that have less than ALL of the following:

      1) 30 employees
      2) $1.5M in revenue
      3) $150K per employee
      4) $250K in top compensation package

      Comments???

      The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries.

      by Words In Action on Sun Nov 25, 2012 at 07:46:52 AM PST

      [ Parent ]

      •  The only problem I have with your definitions (10+ / 0-)

        is the revenue per employee. Under your model, my small retail business is very close to not being considered a small business. We gross just over $700,000 per year, have 2 full-time employees (my husband and me), and 3 part-time employees who are the equivalent of 1 full-time employee. The top compensation package is in the mid 5 figures (well below 2 million!), and yet at $250K per employee, we are skirting the edges of not being a small business. I think net revenue has to be factored in somehow, recognizing that net revenue can be manipulated to some extent. Or raise the revenue per employee figure to recognize small businesses that are doing well, but aren't making its owners millionaires.

        Otherwise, I like what you've put together.

        A society grows great when old men plant trees in whose shade they know they shall never sit. - Greek proverb

        by marleycat on Sun Nov 25, 2012 at 08:27:08 AM PST

        [ Parent ]

        •  You make a good point. (4+ / 0-)

          As you say, though, working with "net" numbers is dicey. To some extent, pretty much all businesses are trying to eliminate taxable income.

          The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries.

          by Words In Action on Sun Nov 25, 2012 at 10:52:21 AM PST

          [ Parent ]

          •  Why does SMALL business deserve a tax break? (0+ / 0-)

            I question the basic premise.

            Yes, small businesses generate a lot of jobs. But do they generate more jobs per dollar of revenue than big businesses? If not, then why exactly should small business get a subsidy?

            Economies of scale allow big businesses to deliver a competitive product at a low price. This leaves more disposable income in customers' pockets.

            I am well aware of the severe failings of Walmart. But Costco, another big business, treats its employees much better and still delivers bargains to millions of customers. If we want to require businesses to treat employees decently, I'm all for that--so let's just have rules that require decent treatment of employees, for big and small businesses alike.

            I patronize a number of small businesses because I like the personal service I get. But that's my choice; I don't think my choice deserves a tax break.

            I say, let the market sort out whether businesses work better big or small.

            "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

            by HeyMikey on Mon Nov 26, 2012 at 03:55:05 PM PST

            [ Parent ]

        •  Instead of net revenue (2+ / 0-)
          Recommended by:
          marleycat, 207wickedgood

          Use value added.

          Subtract all inventory purchases and other product-related purchases from the revenue. That is the value that you and your employees have added to the business.

          The GOP is the party of mammon. They mock what Jesus taught.

          by freelunch on Sun Nov 25, 2012 at 01:43:37 PM PST

          [ Parent ]

    •  I would go with Value Added to define small. (0+ / 0-)

      We can change the entire system to make the problem go away, however.

      All income will be attributed to the owners, but taxed from the business. Every owner of a corporation will get a 1099 whether there is a distribution or not. Non-corporate enterprises already are taxed on the income earned each year.

      There will only be one tax rate at any level of income. There will be no distinction or benefits to capital investments or dividends. The maximum tax will have to go to about 45% on the most wealthy as corporate income taxes disappear. Deferred taxes can be paid over six years or will be charged at 100% of deferred income.

      Phase out all interest rate deductions -- start with large business borrowing.

      A small gross receipts or value added tax will be charged to all businesses, but that would be scaled by size 1% to $1 million, 3% to $1 billion, 5% in excess. Why the 1%? Compliance. If we go with value added, the tax would be slightly different rates, but still give a subsidy to small enterprises.

      The GOP is the party of mammon. They mock what Jesus taught.

      by freelunch on Sun Nov 25, 2012 at 01:41:52 PM PST

      [ Parent ]

      •  That us exactly how S corps work (0+ / 0-)

        The income is attributed to the owners, not the business.  Taxes are due on income whether or not dividends are paid out.  Usually S Corps are small partnerships or family-owned businesses and I don't know if there's as much advantage to that model as there was back when corporate income tax was way higher than personal.

        If all companies did this, what would happen to big owners like pension funds and mutual funds when they are hit with the new taxes.

        I'm not opposed to this per se, I'm just trying to predict what would happen if income flowed to owners of typical publicly traded firms.  And imaging the income flows to Bain Capital and its dozens and dozens of subsidiaries will be Christmas for accounting firms.

  •  Excellent, (27+ / 0-)
    I do NOT believe we should be moving towards what will be an unacceptable version of a "Grand Bargain" in the lame duck.  Besides the fact that the expiration of the Bush tax cuts changes the political framework drastically, there is also the reality that we just elected a new Congress whose membership is significantly more progressive than the outgoing Congress.

     Do nothing before the first of the year.

    "Lets show the rascals what Citizens United really means."

    by smiley7 on Sun Nov 25, 2012 at 04:04:52 AM PST

    •  It's a very good second-best solution (2+ / 0-)
      Recommended by:
      madhaus, smiley7

      The best solution is a rational compromise that cuts spending almost nothing in the next 18 months and adds revenue from the rich immediately. The second-best is one that allows all taxes to go up and forces the Republicans to argue for cutting taxes that increase the deficit that they claim they hate.

      The GOP is the party of mammon. They mock what Jesus taught.

      by freelunch on Sun Nov 25, 2012 at 01:45:18 PM PST

      [ Parent ]

  •  Excellent diary, Teacherken (24+ / 0-)

    You are so right about the capital gains tax, which should be set at the same rate that all other income is taxed.  You may find some of the arguments I included in a diary I posted in September entitled, The Lie Behind Capital Gains Tax Rates.  Here's a key excerpt:

    To understand why Republican claims re: the Capital Gains Tax Rate are so patently false, voters need to understand the difference between Financial Investments and Economic Investments.  They are not the same thing.

    ECONOMIC INVESTMENTS are the kind of investments that actually end up "growing the size of the pie."  They occur when money is spent on capital goods or other economic resources [like humans] that are then used to produce more capital goods or more of the final goods that consumers find desirable.  In other words, economic investments either increase output or expand the supply-side's productive capacity.

    That is what happens whenever firms purchase machinery/equipment to improve productive efficiency or when they spend money on the construction of new stores or factories or on the salaries of new employees.  However, not all firm expenditures are economic investments.  (e.g., money spent by firms on advertising that either (a) misleads consumers or (b) does nothing to help them with their purchasing decisions.)

    FINANCIAL INVESTMENTS are purchases or commitments of money that provide the "investor" with an income stream.  Saving money is a financial investment because it provides interest income; purchases of assets can be financial investments if they eventually provide a capital gain.

    Economic investments made by firms are usually also financial investments because they generate income that exceeds their cost.  The economic investments made by governments that improve infrastructure or human capital are not financial investments because they do not provide the government with an income stream.

    Some financial investments are also economic investments, but many of them are not.  The purchase of a piece of land, for example, is a financial investment if it appreciates in value over time, but it is not an economic investment if it just sits there, undeveloped.

    Purchases of stocks in secondary markets (e.g., NYSE, NASDAQ) are clearly financial investments if the stocks appreciate in value, but they are not economic investments because they involve nothing more than exchanges of titles of ownership of already existing assets.  One financial investor hands money over to another financial investor for a piece of paper.  

    These transactions do not typically put any money into the hands of firm managers that could be used for economic investments.  That normally happens only when stocks are first sold by companies to underwriters, prior to an initial public offering.  New stock issues are rare for companies trying to raise capital, especially when interest rates are at historical lows.

    Keep up the good work, Ken.
  •  I agree that the lame duck session is not (13+ / 0-)

    enough time for a reform of our tax code. Carried interest is not the only loophole that needs to be addressed. Special exemptions for certain industries also need a complete overhaul. Also to be addressed are tax policies governing the investment of money earned in the US and stashed in the Caymans, tax breaks (if they exist) for sending jobs outside the country, even regulations governing not-for-profit tax exemptions. This is a big job if done correctly. Doing it piece meal and poorly has gotten us where we are. Let's not have more of that.

    “Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.” -- Ronald Reagan, 1984 debate with Walter Mondale

    by RJDixon74135 on Sun Nov 25, 2012 at 04:24:45 AM PST

  •  Sounds good. (2+ / 0-)
    Recommended by:
    OhioNatureMom, ozsea1

    Kind of like a wish list though. I think the chances off seeing any meaningful tax reform out of the right is slim and none.

    The Plutocrats are going to go all-in to stop this before it even gets off the ground and the Mad-Hatters are threatening to primary anyone who dares to mention raising taxes.

    It's time though. The current imbalance isn't sustainable if we're going to have long-term fiscal growth. The right, during the eight years of the Bush administration, maxed out the nation's credit card; it's only fair that they now help pay the bill.

    "The human eye is a wonderful device. With a little effort, it can fail to see even the most glaring injustice." Richard K. Morgan

    by sceptical observer on Sun Nov 25, 2012 at 04:54:46 AM PST

  •  Here's my solution: (5+ / 0-)

    flip the tax code. make earned income taxed at a flat 14%, and tax unearned income at a progressive rate. Little old ladys that depend on dividends to pay rent see no change in the rate of tax on their dividend income, but goldman gets taxed at, well gee let's pick a rate that fits, like 45%. Simple to do and fair if you believe that earned income is more valuable to society as a whole.

    "I dreamed I saw Joe Hill last night..."

    by Killer on Sun Nov 25, 2012 at 05:25:54 AM PST

    •  OK But You Have to Have a Floor for Working Poor. (6+ / 0-)

      Mal*Wart employee types who we need to supplement give food stamps because they're paid like dogs, they shouldn't be paying income tax.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Sun Nov 25, 2012 at 05:41:06 AM PST

      [ Parent ]

      •  True. At present, the bottom quintile wage earners (2+ / 0-)
        Recommended by:
        Egg, sebastianguy99

        who average about $18K/year, are currently paying on average 2% income tax, excluding payroll taxes. The next quintile, which is earning about $42K/yr, is paying 9.1% in income tax. And the third quintile is averaging about $64K and paying 12.7%.

        I wouldn't suggest that ANY of these people pay MORE in taxes. In fact, I would suggest a 2-yr stimulus program where they pay income taxes on only 67%, 80% and 90% of their taxable income.

        I would also suggest at least a .50 raise in the minimum wage in both 2013 and 2014, which can be raised additionally thereafter if Dems do well enough in the mid-terms.

        The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries.

        by Words In Action on Sun Nov 25, 2012 at 07:25:33 AM PST

        [ Parent ]

        •  this should be the last time to raise MW (4+ / 0-)

          after we bring the minimum wage up to parity with its original level, raising minimum wage should not require a vote moving forward, but tied to the same cola as SS.

          •  I see no need to require separate action (2+ / 0-)
            Recommended by:
            OhioNatureMom, Words In Action

            Let's find some reasonable rate - which nowadays should be enough not to qualify for foodstamps or being qualified as in poverty.  For now let's say 10/hour.   At current pay for Congress of 174,000.year and assuming 2,000 hr/year on minimum wage (which is actually more than most gegt) that would be a ration of 174/20 or 8.7/1.

            Any time Congress raises its pay it raises the minimum wage automatically to maintain the ratio.

            I am not fixed on 10/hour, which I think is still too low, but used it to give a sense of how the numbers would work.

            "We didn't set out to save the world; we set out to wonder how other people are doing and to reflect on how our actions affect other people's hearts." - Pema Chodron

            by teacherken on Sun Nov 25, 2012 at 09:24:37 AM PST

            [ Parent ]

            •  Why not have the gov't guarantee jobs at $12/hr.? (1+ / 0-)
              Recommended by:
              Words In Action

              Give everyone who wants a job a useful government job at no less than $12/hour with benefits (continue to adjust for inflation). That will end the problems of a minimum wage and give everyone a chance to not work at businesses that rip them off.

              The GOP is the party of mammon. They mock what Jesus taught.

              by freelunch on Sun Nov 25, 2012 at 02:01:46 PM PST

              [ Parent ]

    •  Is there really enough unearned income (0+ / 0-)

      to make up for that whopper tax cut for upper-middle class and wealthy working families? Are there loopholes by which top executives could now transfer back what they once transferred into differed investment income into earned income in order to pay less taxes? This sounds like it would slam the working poor and lower middle class workers, handsomely benefit higher income workers and probably not make enough income to maintain the stats quo. Most "flat tax" schemes are "reward the rich/soak the poor" programs in disguise. So far, I haven't seen a remotely workable one that wasn't.

      Jon Husted is a dick.

      by anastasia p on Sun Nov 25, 2012 at 01:58:28 PM PST

      [ Parent ]

  •  Shouldn't Cap Gains Tax Also Pay Into Social Sec- (11+ / 0-)

    urity? Maybe the payroll tax rate could come down as we make the program secure forever, if all types of income paid a share into it.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sun Nov 25, 2012 at 05:39:02 AM PST

  •  Trend here in Canada (11+ / 0-)

    is to define all income as income.  

    It is also illegal to reduce " taxes in a way that is inconsistent with the overall spirit of the law."  
    http://www.cra-arc.gc.ca/...

    "Tax Avoidance"

    So many rich US citizens would be in a big pile of trouble if they did the same in Canada.

    "The only person sure of himself is the man who wishes to leave things as they are, and he dreams of an impossibility" -George M. Wrong.

    by statsone on Sun Nov 25, 2012 at 05:43:49 AM PST

    •  very little difference between us and Canada. (2+ / 0-)
      Recommended by:
      saluda, sebastianguy99

      we have a lower rate for capital gains, you exclude half of the gain from income.  we have lower rates for dividend income, you allow individuals a tax credit for tax paid by the corporation.

      these are just different means to the same end: preferential treatment for investment income.  and we all have similar anti-avoidance rules.

      •  from a quick scan around, it seems (0+ / 0-)

        Canada has slightly less robust anti-avoidance rules than the US.  there seems to still be some benefit for foreign trusts and for non-controlled foreign accumulation investments. (eg, UK or Irish accumulation schemes)

  •  Rattner is one of the more thoughtful analysts... (11+ / 0-)

    in the area of budgetary matters.

    He's invariably equipped with hard data to make his case and generally provides a cogent analysis of the situation.  If Joe S would only be quiet while he spoke, Joe might learn some real economics beyond the "yell small business" at anything mantra that seems to infect his thinking.

    Excellent diary teacherken!

  •  Jump off the cliff, let everything expire, (1+ / 0-)
    Recommended by:
    Egalitare

    and just Do. Nothing.

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

    by zenbassoon on Sun Nov 25, 2012 at 05:48:07 AM PST

  •  Big salaries hide profits (3+ / 0-)
    Recommended by:
    DRo, NM Ray, saluda

    A company has to pay less in taxes if excessive salaries take the profits. Then the individual CEO should be taxed on that profit, but there's always loopholes.

    Bonuses (& bonus salaries) should come after the profits are taxed.

    Also Walmart corporate welfare cheats don't pay their workers enough for a living wage, and they tell workers how to apply for food stamps & other help. So all those not-enough wages shouldn't be fully deductible, same as food and entertainment isn't fully deductible.

    The boss needs you, you don't need him. -- France general strike, May 1968

    by stargaze on Sun Nov 25, 2012 at 05:53:21 AM PST

    •  Simple answer to the Walmart Food Stamp Issue (7+ / 0-)

      If your employee has to apply for federal benefits and is willing or able to work full time and you do not provide them that opportunity, you will be assessed the full cost of the supplemental benefits paid to that employee due to the fact that you fail to provide full time work when that option is available (i.e., the business is open at least 40 hours during the week) and the employee is willing and able to do it.

      Part time work should be an agreement between employees and employer -- if I have a disability, a child-care situation, schooling, and REQUEST part time work, then that's my choice.  But you as the employer should not be allowed to shirk your responsibilities to the community and your workforce by scheduling 100 people for 10 hours a week rather than 25 people for 40.   Especially when scheduling those 100 people for 10 hours a week effectively means that it's almost impossible (due to the requirement of "you must be available any time we feel like calling you in") for the employee to take on other work to make up the difference.

      If employers had to pay for the cost of the supplemental benefits their employees need to survive because the employer refuses to pay a living wage, maybe fewer employers will see the government as Mommy and Daddy picking up the slack when they fall short.

      "There isn't a way things should be. There's just what happens, and what we do." — Terry Pratchett (A Hat Full of Sky)

      by stormicats on Sun Nov 25, 2012 at 06:38:21 AM PST

      [ Parent ]

      •  Re (1+ / 0-)
        Recommended by:
        nextstep
        If your employee has to apply for federal benefits and is willing or able to work full time and you do not provide them that opportunity, you will be assessed the full cost of the supplemental benefits paid to that employee due to the fact that you fail to provide full time work when that option is available (i.e., the business is open at least 40 hours during the week) and the employee is willing and able to do it.
        Message: don't hire people, especially for part-time work under any circumstances. Automate whatever you possibly can. Overwork your existing full time employees as much as possible.

        Jobs for whom the market wage is lower than your supposed living wage will vanish.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Sun Nov 25, 2012 at 09:07:17 AM PST

        [ Parent ]

        •  Maybe I didn't word this well (1+ / 0-)
          Recommended by:
          madhaus

          What I was trying to convey was the idea that it should not be a standard business model to have 95% of your work force be so part time that they never get near a threshold for benefits, coupled with requiring that they be available on such a variable schedule as to preclude them from working anywhere else.

          I didn't say that there should be forced overtime, so I don't know where you got that.  40 hours is 40 hours -- at which point in time, overtime is compensated at time and a half by federal law.

          Finally, from what I've seen of "automatic checkouts," the day when we will have automated in-store service is still many years ahead of us.  When I want to talk to a store clerk, I want to see a human being, not a keypad.

          "There isn't a way things should be. There's just what happens, and what we do." — Terry Pratchett (A Hat Full of Sky)

          by stormicats on Sun Nov 25, 2012 at 01:32:50 PM PST

          [ Parent ]

          •  You worded it well (1+ / 0-)
            Recommended by:
            madhaus

            You're just trying to argue with one of our resident conservatives.

            Jon Husted is a dick.

            by anastasia p on Sun Nov 25, 2012 at 02:00:40 PM PST

            [ Parent ]

          •  Better ways to fix that. (0+ / 0-)

            1. Ensure that everybody has access to health care, regardless of employment status.

            2. Require overtime for irregular, unpredictable hours, even under 40 hours/week.

            3. Raise the minimum wage to living wage.

            "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

            by HeyMikey on Mon Nov 26, 2012 at 03:59:57 PM PST

            [ Parent ]

    •  IOW, your position is that bonuses (5+ / 0-)
      Recommended by:
      saluda, Sparhawk, ferg, nextstep, madhaus

      should be non-deductible.  the problem is that there are a lot of reasons people use bonuses, and a lot of them are totally legitimate.

      also, as it stands a bonus is basically a transfer of tax from the corporation to the exec, where its taxed at a higher rate (fed, state, and the additional imposition of Medicare payroll tax).  that doesn't strike me as a bad deal for the Treasury.

      •  Perhaps it could be means tested (1+ / 0-)
        Recommended by:
        ozsea1

        Allowing no deductions for bonuses for companies to employees with incomes/bonuses that exceed a certain level.

        There has to be a way to provide the proper incentives.

        Please stand by. I'm looking for a new sig line.

        by Betty Pinson on Sun Nov 25, 2012 at 10:02:56 AM PST

        [ Parent ]

        •  raise the CEOs personal taxes (0+ / 0-)

          Which is what Obama is proposing.

          The high salaries of the CEOs aren't a tax avoidance scheme, but the low tax rates encourage high CEO salaries. The companies are ripping off the employees and the shareholders, but not the IRS.

          If their personal taxes are raised, it will discourage companies from spending too much on CEO salaries.

      •  Bonuses vs. Salaries isn't the issue (0+ / 0-)

        What matters is the total level of compensation.

  •  The best reason to do nothing (5+ / 0-)

    until the new year. It would remove "Bush tax cuts" from the lexicon. The replacement phrase will cause Republican heart burn for years to come "OBAMA tax cuts.

    It is reason, and not passion, which must guide our deliberations, guide our debate, and guide our decision. Barbara Jordan

    by UTRepub on Sun Nov 25, 2012 at 06:11:17 AM PST

  •  Simple Two line change to current tax code (4+ / 0-)
    Recommended by:
    Words In Action, saluda, marleycat, ferg

    First Line of Tax Code:

    The following sections apply to the first $250,000 of Income.

    Last line of tax code:

    Balance of income from all sources over $250,000 is taxed at 40%

    VOLIA !! A BALANCED BUDGET !!!

    "Now watch what you say or they'll be calling you a radical, a liberal, a fanatical criminal" -- Logical Song -- Rick Davies & Roger Hodgson

    by Over50Lib on Sun Nov 25, 2012 at 06:29:17 AM PST

  •  I agree with most if not all of these proposals (2+ / 0-)
    Recommended by:
    stargaze, Words In Action

    so long as credits are established so that they don't make the taxes of low-income people any higher, e.g. the working poor, struggling families and seniors living on modest retirement income, and so long as they're phased in over a several year period so that their adverse economic and political consequences are lessened.

    Put hell yeah, we need to sop up some of that upwardly redistributed wealth and use it to pay down the debt and finance some of the spending we need.

    It's not like they really earned most of it, instead just exploiting the rules (that they changed) to turn a dollar's worth of work into a thousand's.

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Sun Nov 25, 2012 at 06:48:24 AM PST

  •  No taxes should be increased (1+ / 0-)
    Recommended by:
    condorcet

    unless offset by corresponding spending increases until the economy is creating enough jobs.  This is lost in the discussions here: but Keynes would be aghast at raising taxes on anyone during a period of economic softness.

    Those advocating going over the Fiscal Cliff are just dead wrong in my opinion.

    Putting that aside, I think Democrats need to go big on tax reform, and go simple.

    When I say go big, they need to listen to what Monyhan said for 30 years: the Social Security tax is terrible tax for the following reasons:
    1.  It is regressive.
    2.  It increases the marginal cost of employment through the employer match.

    I would also go simple.  Remove the distinction between cap gains and ordinary income.  Eliminate most deductions.  

    So there would be one tax and it would pay for all government activities (though I would love to see carbon tax that isn't going to happen).

    I am part of an e-mail group that includes a couple of people who use to post here (Bondadd, NDD).  One of the trial balloons that has been floated is going back to the 1986 tax law.  They were for it - I haven't studied it enough to know one way or another - but that is the direction I would go.  

    The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

    by fladem on Sun Nov 25, 2012 at 06:56:55 AM PST

    •  not true, actually. taxes for high income aren't (2+ / 0-)
      Recommended by:
      johanus, sebastianguy99

      Keynesian. Taxes on income above $100k or so doesn't significantly affect the economy (this includes capital gains rates).

      You can raise taxes on the rich and increase stimulus spending to match and get a net stimulus.

      This is important, because the Village reports the opposite.

    •  imo, it is more important (0+ / 0-)

      to raise taxes on the rich when possible than to avoid anything which would hurt growth a little.  deficit and debt is a big political problem in governance and higher taxes on rich are necessary.

      i agree that 1 or 2 taxes is a much much better idea than the current terrible system, and that it would be better to eliminate the payroll tax.

  •  Rattner (2+ / 0-)
    Recommended by:
    condorcet, sebastianguy99

    I am heavily suspicious of Rattner...and when he was NY AG Cuomo agreed with me:

    The civil fraud claims, which Mr. Rattner fiercely contested, came within moments of news that the financier had settled a related dispute with the S.E.C. In that case, Mr. Rattner accepted a two-year ban from certain Wall Street businesses and, without admitting or denying wrongdoing, agreed to pay a $6.2 million fine.

    Mr. Cuomo, New York’s Democratic governor-elect, is seeking stiffer penalties, including $26 million. While other major figures in the pension investigation had already resolved their cases and Mr. Rattner had been expected to reach a settlement with the S.E.C., the charges from the attorney general’s office amounted to a public showdown between Mr. Cuomo and a man who is not only a prominent figure on Wall Street but also a powerful Democratic fund-raiser.

    Rattner also supported Blue Dog Ford over Gillibrand.

    Rattner is not my idea of a trustworthy person, though maybe my information is out of date since I haven't been focusing on him for a few years.

    FREEDOM ISN'T FREE: That's why we pay taxes. I Had A Thought

    by mole333 on Sun Nov 25, 2012 at 07:09:26 AM PST

    •  The ideas that Rattner proposes... (6+ / 0-)

      or that anyone else proposes for that matter, should stand or fall on their own merits.

      •  Yes and no (1+ / 0-)
        Recommended by:
        sebastianguy99

        Yes what he says on the surface makes sense. But as someone who seems to be among the worst Democrats in terms of pay-to-play (keep in mind most Republicans are worse than the worst Democrats on this) makes me suspect about what he is saying. Skepticism is healthy in the case of someone I once spent a fair amount of time seeing as at the heart of corruption on the Democratic side. Again, the worst Dem corruption still tends to be less horrible than the worst Repub...but that doesn't mean I like it from our side.

        FREEDOM ISN'T FREE: That's why we pay taxes. I Had A Thought

        by mole333 on Sun Nov 25, 2012 at 08:02:43 AM PST

        [ Parent ]

    •  i remember that rattner said just a couple of (2+ / 0-)
      Recommended by:
      sebastianguy99, mole333

      months ago that elizabeth warren is sort of extreme.  he may have actually supported scott brown.

      i agree with rattner's article, though.

    •  He also defended Bain when the ads started (1+ / 0-)
      Recommended by:
      mole333

      He didn't go as far as Mayor Booker, but he was on Morning Joe defending them. He later switched tunes and started to distinguish between venture and vulture capitalist.

      "There is nothing more dreadful than the habit of doubt. Doubt separates people. It is a poison that disintegrates friendships and breaks up pleasant relations. It is a thorn that irritates and hurts; it is a sword that kills.".. Buddha

      by sebastianguy99 on Sun Nov 25, 2012 at 12:05:28 PM PST

      [ Parent ]

  •  I agree across the board. (4+ / 0-)
    Recommended by:
    RUNDOWN, Egg, ferg, ozsea1

    Some additional comments:

    1) At some point, say $100K, investment income should revert to normal income tax rates.

    2) The buffet rule AMT for millionaires (30%) should be extended to Obama's $250K bracket, at a 22.5%, a $500K bracket, at 25%, and a $750K bracket, at 27.5%.

    3) As you suggest, we should NOT have to pay for Tax Code modifications with a Grand Bargain. We have been paying for trickle-down economics, without reciprocating benefit. for decades.

    Instead, the cap on FICA should be eliminated, the tax should apply to ALL income (the whole pie), and benefits should be progressively reduced and ultimately eliminated for anyone earning more than $250K by other means during retirement. Let's END the discussions on SS and Medicare budget "problems".

    To this I would add the following two "stimulus" programs.

    1) Increase the minimum wage over the next two years: $7.25 to $7.75, then $8.25. If the Dems win 2014, they can continue increasing thereafter, hopefully even more aggressively.

    2) By quintile, taxpayers are earning the following average incomes before taxes and paying the following effective taxes (yes, these rates exclude payroll taxes, which disproportionately impact the bottom 4 quintiles):

    Lowest     $18,400       2%
    Second     $42,500       9.1%
    Middle      $64,500     12.7%
    Fourth      $94,100     15.7%
    Highest  $264,700     20.1%

    I would propose that for the next two years, the bottom two quintiles be allowed to pay taxes on only 2/3s of whatever their net taxable income turns out to be. These $ will go right back into the economy and help pull some people out of poverty.

    In addition, for the same two years, I suggest that the Middle and Fourth quintiles be allowed to pay taxes on 80% and 90% of their taxable incomes. This will increase demand and hopefully also reduce personal debt.

    Last, I would suggest some incentive program for the wealthy--especially those earning $25M or more--to "buy and retire" national public debt, perhaps in conjunction with eliminating offshore tax shelters. Someone else can design/recommend the mechanism.

    The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries.

    by Words In Action on Sun Nov 25, 2012 at 07:10:25 AM PST

    •  Maybe it's because I earn $260K per year. . . (1+ / 0-)
      Recommended by:
      Words In Action

      . . . . but the range in incomes in the highest quintile is huge (as compared to the other quintiles).  I can assure you that making $260K (all income not capital gains) is wonderful and comfortable, but it is a far cry from making $10 million per year.

      In elder days, there were many more tax brackets, and I see the value of increasing the number now.  What's wrong with a graduated table that goes up to 60% or 70% for those at the mega buck level?

      I am more than happy to pay 40% of my (hopefully growing) income above $250K, but why should I pay only that if get to the $1M level?

      the fact that you're right is nothing more than interesting

      by Egg on Sun Nov 25, 2012 at 10:52:12 AM PST

      [ Parent ]

      •  I agree wholeheartedly. The top bracket (0+ / 0-)

        should not be $250K. There is NO relation between people earning $250K and those earning $10M.

        I think others should be (tax rate, AMT rate):

        $250K (38%, 22.5%)
        $500K (40%, 25%)
        $750K (42%, 27.5%)
        $1M (44%, 30%)
        $5M (48%, 33%)
        $20M (52%, 38%)
        $50M (55%, 43%)
        $100M (58%, 46%)
        $250M (60%, 50%)

        The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries.

        by Words In Action on Mon Nov 26, 2012 at 08:19:53 AM PST

        [ Parent ]

  •  oh, my God... (3+ / 0-)
    Recommended by:
    Words In Action, marleycat, madhaus

    ...if we were to increase the rates on "non-earned income" like Capital gains and cap deductions, just think of all of those jobs the people with personal fortunes through those means, like Mittch-A-Sketch Romney...might be lost. My, good heavens, according to my calculations, that would be a net job loss of.......................zero.

  •  A famous British bank robber (2+ / 0-)
    Recommended by:
    Words In Action, Icicle68

    In an apocryphal tale, was asked why he robbed banks. He is said to have responded "Because that's where the money is!"

    The same reasoning applies to raising taxes on the rich, they have the money. Closing tax loopholes and seizing hidden assets are also on my wish-list for the holidays.

    "Political ends as sad remains will die." - YES 'And You and I' ; -8.88, -9.54

    by US Blues on Sun Nov 25, 2012 at 07:46:34 AM PST

    •  Just because it's interesting... (2+ / 0-)
      Recommended by:
      US Blues, sebastianguy99

      More background on Willie Sutton, a la Snopes:

      Bank robber Willie Sutton (1901-1980) did rather well at his profession: Over the course of his career, he made off with an estimated $2 million in ill-gotten gains. He was a daring and resourceful robber who used disguises and trickery to achieve his ends, including dressing as a policeman, window washer, maintenance man, bank guard, mover, Western Union messenger, and striped-pants diplomat.

      Yet for all his success, Sutton wasn't a typical thug. He was instead described by those he encountered as polite and even a gentleman. (One victim said witnessing one of his robberies was like being at the movies, except the usher had a gun.)

      More at link...
  •  Rattner, revenue, etc. (2+ / 0-)
    Recommended by:
    marleycat, RUNDOWN

    Nothing in his or your comments is especially disagreeable, but I think there are additional points to consider at leisure, that is, the “cliff/curb” response should be only a stopgap measure.  The tax code in its entirety needs to be reworked.  For now though since there may be some will to attack capital gains and dividends, they should be taxed as ordinary income (gasp!).  Let the Gaults go and the others weep and gnash.  There simply is no reason as Mr. Rattner seems implicitly to appreciate for treating income differently due to source.  It’s like the oil depletion allowance (which I think goes by a different name these days).  Because oil is a wasting asset, we must by policy encourage its exploitation thereby…doodah, doodah…Income is income and its differentiation upon some mythical basis/-es is welfare for those least in need.  

    I leave to wiser heads the selection of secretaries but enjoy the fantasy of Professor Krugman in some capacity for systemic effect.

    Below are thoughts from an earlier diary of my own which was unread, so I thought to share on the pretense of some slight relevance.

    As a trial lawyer (and later judge) I learned that when someone said "to be honest," "to tell the truth," "frankly," ad naus., I was about to be lied to. As a political science student later involved (slightly) in politics, I realized that when someone spoke of taxes or economics (of which I have only the crudest comprehension), I was about to be lied to. When our top income tax rate was 90%, I naively wondered how large an income would be required for comfortable existence on a mere 10% thereof. The reality is that the middle two thirds of us must support the government/society simply because the top won't and the bottom can't. There may be various means of affecting this reality to some small degree, but the fact is that the will does not exist to effect such change.

    PS While in law school campaigning for (in essence only) the governor of my state of residence, in a men's room I was introduced to the great man who was then standing at a urinal. He altered his positioning to offer me his dominant hand for shaking as I considered how appropriate that I shake that hand at that moment...

  •  Something we seem to forget ... (1+ / 0-)

    Is the ability of wealthy people to:
    1. Work very hard to shape the laws. That's why they have lobbyists.
    2. Adapt very fast to new laws.

    If you change the way they are taxed today, they will change the way they are compensated to give them maximum profit and minimize their payments to the Government. So, if we are not careful, we might be counting on money that won't be there in a few years, because nobody is being compensated in Capital Gains anymore. As an example, Walmart has already modified its Capital Gain dividend payment for the end of the year.

    Whatever system we end up putting in place needs to take that into consideration.

  •  Figure out a way to protect non-onepercent seniors (0+ / 0-)

    living off dividend income and SS.

    Leave longterm capital gains rates alone for now.

    My mom, an Eisenhower republican, would be less fearful of "Kenyan Socialism", and it would give our political discussions more traction.

    Thanks.

    The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

    by ozsea1 on Sun Nov 25, 2012 at 10:24:32 AM PST

  •  Link everything to median annual income (1+ / 0-)
    Recommended by:
    sebastianguy99


    I think we should link everything to the median annual income of Americans from the prior year.

    For example,

    1. A special income tax rate of 45% on all income that exceeds 10X the median income.

    2. Dividend income up to 2X median income taxed at a low rate (15%) and all dividend income above that taxed at regular income tax rates

    3. Total deductions limited to an amount that is equal to the median  American income of last year.

    So, if anyone wants any of these to be raised, then they have to work to raise the median income.  As simple as that.

    (-7.75,-5.64) Headline: "Man who told half the nation to go screw themselves somehow loses a national election".

    by Whirlaway on Sun Nov 25, 2012 at 10:40:28 AM PST

  •  as a long time tax professional, i would go (0+ / 0-)

    even farther than mr. rattner's proposals. i would eliminate all preferential treatment of all unearned income, period. it should be taxed at the same marginal rates as earned income, there is no actual rational basis for it being taxed otherwise. the classic argument "people won't invest, if dividends/interest/capital gains are taxed at the same rate as earned income" is one of the single most ridiculous arguments i've ever encountered, and i've encountered a lot of them, in over 30 years in the biz.

    dividends especially should be taxed at ordinary rates, since most are derived, not from stock purchased directly from the issuing company (and therefore being a direct benefit to the issuing company), but from shareholder's selling them on the open market. already issued and outstanding shares being traded provide specifically zero benefit to the company that originally issued them, any gains made from selling them should also be treated as ordinary income, whether short or long-term.

    "carried interest" is hogwash, since it has nothing whatever to do with actual interest, defined as the cost of borrowing money. it is nothing more than personal service income, and should be treated and taxed as such.

    all of these are simply political welfare to the monied classes, and should be immediately stricken from the Internal Revenue Code. i can guarantee this will have little or no effect on investing, where else are they going to put the money, in their mattresses?

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