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OT - Inside Obama's "Tax Cut" Can you say Redistribution!User Forum Topic
Submitted by michael on October 13, 2008 - 3:39pm
Obama's 95% Illusion One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today. It's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut." For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit." Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals: - A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple. - A $4,000 tax credit for college tuition. - A 10% mortgage interest tax credit (on top of the existing mortgage interest deduction and other housing subsidies). - A "savings" tax credit of 50% up to $1,000. - An expansion of the earned-income tax credit that would allow single workers to receive as much as $555 a year, up from $175 now, and give these workers up to $1,110 if they are paying child support. - A child care credit of 50% up to $6,000 of expenses a year. - A "clean car" tax credit of up to $7,000 on the purchase of certain vehicles. Here's the political catch. All but the clean car credit would be "refundable," which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer -- a federal check -- from taxpayers to nontaxpayers. Once upon a time we called this "welfare," or in George McGovern's 1972 campaign a "Demogrant." Mr. Obama's genius is to call it a tax cut. The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year. The Heritage Foundation's Center for Data Analysis estimates that by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS. The total annual expenditures on refundable "tax credits" would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare. By redefining such income payments as "tax credits," the Obama campaign also redefines them away as a tax share of GDP. Presto, the federal tax burden looks much smaller than it really is. The political left defends "refundability" on grounds that these payments help to offset the payroll tax. And that was at least plausible when the only major refundable credit was the earned-income tax credit. Taken together, however, these tax credit payments would exceed payroll levies for most low-income workers. It is also true that John McCain proposes a refundable tax credit -- his $5,000 to help individuals buy health insurance. We've written before that we prefer a tax deduction for individual health care, rather than a credit. But the big difference with Mr. Obama is that Mr. McCain's proposal replaces the tax subsidy for employer-sponsored health insurance that individuals don't now receive if they buy on their own. It merely changes the nature of the tax subsidy; it doesn't create a new one. There's another catch: Because Mr. Obama's tax credits are phased out as incomes rise, they impose a huge "marginal" tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. As the nearby chart illustrates, the marginal rate for millions of low- and middle-income workers would spike as they earn more income. Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of "making work pay," but in practice they can be a disincentive to working harder, especially if you're a lower-income couple getting raises of $1,000 or $2,000 a year. One mystery -- among many -- of the McCain campaign is why it has allowed Mr. Obama's 95% illusion to go unanswered.
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Ah, don't freight, at least it's no longer just a tax for the "wealthy". If it really concerns folks, just setup a few small biz with ample writeoffs...
- A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple.
Lol, this is like an economic stimulas 2 package. No difference here.
- A $4,000 tax credit for college tuition.
Amerikans getting a more edukation.. That ain't no bad now, right?
- A 10% mortgage interest tax credit (on top of the existing mortgage interest deduction and other housing subsidies).
If there is no income restrictions on that, bring it on baby!!!!!
- An expansion of the earned-income tax credit that would allow single workers to receive as much as $555 a year, up from $175 now, and give these workers up to $1,110 if they are paying child support.
Translation: get a divorce if you have kids to save on your taxes :)
- A child care credit of 50% up to $6,000 of expenses a year.
Have 5 children, then get a divorce and combine with your above tax credit for even greater savings :)
- A "clean car" tax credit of up to $7,000 on the purchase of certain vehicles.
Imho better than giving biz owners that drive big ass SUV's the full writeoff amount for an escalade.
Nah, don't worry. Politicians never like to tax themselves to death. So I'm sure if you just follow what Obama is gonna do, you'll find a way to pay less taxes this year. Last time I checked, neither Obama or McCain are really in the poor house.
This a near-heroic tax plan being proposed by Obama. Instead of kowtowing to the top 5% and their campaign contributions, he is going right at them -- head on with a tax increase.
Given that it is the top 5% who have benefited most over the last 8 years of Chimpyism, and given that the top 5% have raped this country over the last 8 years and have caused an economic crisis, actually making them pay their fair share of taxes is the right thing to do.
God bless Obama. He is finally going to give the super-rich like Angelo Mozilla some payback after all the damage they have done.
Hopefully Obama can push through some type of wealth tax after he gets his initial income tax provisions passed. Maybe something like 5% a year on the assets of the wealthiest 5% of Americans. It's the right thing to do.
Obama will:
- Tax small businesses threatening their viability
- Increase payroll taxes
- When he says top 5% what he actually means is middle class folks like me who make over $75,000/yr.
Given that it is the top 5% who have benefited most over the last 8 years of Chimpyism, and given that the top 5% have raped this country over the last 8 years and have caused an economic crisis, actually making them pay their fair share of taxes is the right thing to do.
God bless Obama. He is finally going to give the super-rich like Angelo Mozilla some payback after all the damage they have done.
Hopefully Obama can push through some type of wealth tax after he gets his initial income tax provisions passed. Maybe something like 5% a year on the assets of the wealthiest 5% of Americans. It's the right thing to do.
Except the bulk of the taxes come from W-2 earnings. How many CEO's have $0 salaries but are compensated with equities and deferred compensation? For example, do you pay social security taxes on capital gains? Also, if we were to remove the cap on social security taxes on income, who is this really hurting? I can see this already. Across the nation, CEO's are going to (for the interest of the company) starting taking a $0 salary...(Of course the equity will be doubled, and especially at these market prices, that's even more reward for the future).
Think about it.
Also, while there are a lot of CEO's that are crooks, not all of them don't deserve what they have.
Would you be looking at your iphone, or macbooks if it were not for steve jobs? You think anyone else can really do his job (no pun intended)?
A statistical quirk gives all of us who follow income distribution patterns a misleading picture of "the rich". Obama and other politicians artfully take advantage of it.
Think of the life cycle of many small businesses (btw, this also applies to long-term real estate investments): The entrepreneur builds the business over several decades, struggling at first (often earning less than his workers), but eventually learning, growing, building a valuable and saleable asset. The struggle is worth it because the goal all along is to sell the business before retirement & reap a big capital gain.
Assuming it works and the business did not fail during the lean years, a big capital gain is the real reward for all that effort. What do the government's statitics say about this individual in the year he sells out? He's rich! Maybe makes a million, maybe makes Obama's threshold quarter-million, and is taxed accordingly. His lifetime income may be quite modest. But government figures, every year, portray these entrepreneurs & RE investors as fat cats because of an accident of the calendar. Gullible voters fall for a populist message as a result.
http://elections.foxnews.com/2008/10/13/...
Wealth redistribution at its finest...
Except the bulk of the taxes come from W-2 earnings. How many CEO's have $0 salaries but are compensated with equities and deferred compensation?
If a CEO is paid in stock, he still has to pay tax on that stock. That is, a CEO can't get out of paying tax just because he is paid in something that is not "cash". For example, if a CEO is paid in cows, he still has to pay taxes on the fair value of those cows. So this is a straw man.
For example, do you pay social security taxes on capital gains?
Nope.
Also, if we were to remove the cap on social security taxes on income, who is this really hurting?
Under Obama's plan, the social security tax will apply to income up to something like $95K, then there would be no social security tax on income between $95K and $250K, and then the social security tax would apply to income over $250K. Another straw man.
I can see this already. Across the nation, CEO's are going to (for the interest of the company) starting taking a $0 salary...(Of course the equity will be doubled, and especially at these market prices, that's even more reward for the future).
Think about it.
As I stated above, the CEOs will be taxed on that equity when they receive it. Then, they will be taxed at a higher capital gains rate when they sell that equity. Another straw man.
Also, while there are a lot of CEO's that are crooks, not all of them don't deserve what they have.
Would you be looking at your iphone, or macbooks if it were not for steve jobs? You think anyone else can really do his job (no pun intended)?
I would still gladly trade my income for Steve Jobs even under Obama's "draconian" tax plan. Jobs' income tax will go up a couple of percent, but I bet he will continue to run Apple and continue to make gobs of money as opposed to going and standing in a welfare line. But I get your point, under Obama the rich will pay income tax at a similar rate as the working, middle class. This will likely come as quite a shock to the super-rich who are used to getting non-stop BJs from Bush.
For a fat lazy union worker, you sure are concerned about the plight of the super-rich. Maybe you should start a charity Web site to help them pay their taxes.
Think of the life cycle of many small businesses (btw, this also applies to long-term real estate investments): The entrepreneur builds the business over several decades, struggling at first (often earning less than his workers), but eventually learning, growing, building a valuable and saleable asset. The struggle is worth it because the goal all along is to sell the business before retirement & reap a big capital gain.
Assuming it works and the business did not fail during the lean years, a big capital gain is the real reward for all that effort. What do the government's statitics say about this individual in the year he sells out? He's rich! Maybe makes a million, maybe makes Obama's threshold quarter-million, and is taxed accordingly. His lifetime income may be quite modest. But government figures, every year, portray these entrepreneurs & RE investors as fat cats because of an accident of the calendar. Gullible voters fall for a populist message as a result.
OMG! ENTREPRENEURS ARE GOING TO STOP STARTING BUSINESSES BECAUSE THE CAPITAL GAINS TAX RATE IS GOING UP A FEW PERCENT. WE'RE ALL DOOMED!
Give me a break. Entrepreneurs start businesses because they don't want to work for the man. Obama's tax plan will not hinder entrepreneurship in the slightest.
Except the bulk of the taxes come from W-2 earnings. How many CEO's have $0 salaries but are compensated with equities and deferred compensation?
If a CEO is paid in stock, he still has to pay tax on that stock. That is, a CEO can't get out of paying tax just because he is paid in something that is not "cash". For example, if a CEO is paid in cows, he still has to pay taxes on the fair value of those cows. So this is a straw man.
Also, if we were to remove the cap on social security taxes on income, who is this really hurting?
Under Obama's plan, the social security tax will apply to income up to something like $95K, then there would be no social security tax on income between $95K and $250K, and then the social security tax would apply to income over $250K. Another straw man.
I can see this already. Across the nation, CEO's are going to (for the interest of the company) starting taking a $0 salary...(Of course the equity will be doubled, and especially at these market prices, that's even more reward for the future).
Think about it.
As I stated above, the CEOs will be taxed on that equity when they receive it. Then, they will be taxed at a higher capital gains rate when they sell that equity. Another straw man.
So, stock gains are not taxed at income tax rates. Capital gains rates are lower. No Social security tax is taken from these gains.
So, if you consider these three items labelled as "straw man" arguments it becomes obvious that taking stock options rather than salary above 250K, becomes a way to avoid BOTH the increase in social security taxes on payroll aver 250K and any other federal income tax rate increases in this category.
Calling each of these things individually straw men, without considering their combined effect is itself a straw man.
TheBreeze, don't look now but the "rich" are your boss. They'll make you feel the pain first before they'll take the pain on themselves. You also agreed with FLU without even knowing it. The fat cats will not be hurt by Obama's plan, they have plenty of ways to get around this. The one will be hurt are the people who actually work for their money. The one who will benefit most are the lazy a$$ who sit at home and do nothing and pay no taxes. They'll get even more tax credits for doing nothing.
Except the bulk of the taxes come from W-2 earnings. How many CEO's have $0 salaries but are compensated with equities and deferred compensation?
If a CEO is paid in stock, he still has to pay tax on that stock. That is, a CEO can't get out of paying tax just because he is paid in something that is not "cash". For example, if a CEO is paid in cows, he still has to pay taxes on the fair value of those cows. So this is a straw man.
Also, if we were to remove the cap on social security taxes on income, who is this really hurting?
Under Obama's plan, the social security tax will apply to income up to something like $95K, then there would be no social security tax on income between $95K and $250K, and then the social security tax would apply to income over $250K. Another straw man.
I can see this already. Across the nation, CEO's are going to (for the interest of the company) starting taking a $0 salary...(Of course the equity will be doubled, and especially at these market prices, that's even more reward for the future).
Think about it.
As I stated above, the CEOs will be taxed on that equity when they receive it. Then, they will be taxed at a higher capital gains rate when they sell that equity. Another straw man.
So, stock gains are not taxed at income tax rates. Capital gains rates are lower. No Social security tax is taken from these gains.
So, if you consider these three items labelled as "straw man" arguments it becomes obvious that taking stock options rather than salary above 250K, becomes a way to avoid BOTH the increase in social security taxes on payroll aver 250K and any other federal income tax rate increases in this category.
Calling each of these things individually straw men, without considering their combined effect is itself a straw man.
FSD,
Actually, one comment about "stock options". There is a very subtle and fine line about stock options, between the two kinds.
1)ISO (incentive stock options) are not taxed at exercise time (but subject you to AMT most likely)...Also when you sell, it gets treated at capital gains, not income.
2)NQ (non qualified) ARE taxed as income and not capital gains, and the tax is assessed at exercise time. Most companies offering NQ do not let you do an exercise and hold, because they need to collect taxes right away (unless you have money in the account to cover the tax).
In fact, if you exercise and sell NQ, it gets reported on your W-2.
So even depending on the type of the stock options,
depends on whether someone gets taxed at income (and hence pay social security or not).
Most average joe workers at a public company will get NQ stock options (ISO's are very uncommon at publically traded companies these days for average joe).
This is why if you are holding to a lot of NQ stock options that are in the money (IE qualcomm, google,yahoo,etc employees), you might want to consider talking with your tax accountant sooner versus later. Because although as of last year and this year, there was a maximum cap on how much you would pay for Social Security taxes. If the government is gonna eliminate the cap on social security, then it's gonna end up biting you if you sell a lot of NQ stock options.
Also side note:
If you have ESPP shares, there are tax implications as well. When you sell ESPP shares a portion of the sales counts as "income" and a portion counts as cap gains/loss. In general, the income portion is the difference between the grant price of the ESPP and the FMV of the stock the day you were granted the share. Again, if your typical spread is 20%, that portion falls into taxable income when you sell your shares. The remaining difference between sale price your base is either short or long term cap gains/loss.
Again, selling a lot of ESPP shares may push you into another tax bracket, and again, in theory if there is no cap on social security taxes you may end up paying a hell of lot of taxes in the future.
Note: this is why last year we emptied out ESPP, NQ
stock options that were in the money etc. Because, that probably was the last year that will be lowest taxes for W-2 folks. Taxman was happy last year, because that was a painful check to write. But better pain yesterday, than taxpain tomorrow.
Bottom line: W-2 folks are gonna get the shaft, even if you think it doesn't apply to you...unless you plan very very carefully sooner versus later.
Executive compensation probably is different, in that you have both options and actual stock grants, and I think the tax ramifications are different for those situations.
Whether the fat cats can get around Obama's tax increases will depend on whether Congress goes the extra step and closes any loopholes.
The concept is pretty simple: Anything someone receives for doing work should be taxed as income. This includes stock. Stock options should be taxed as income when they are exercised. All income above $250K should be subject to the Social Security and Medicare payroll taxes.
The capital gains rate should also increase for those with income+capital gains exceeding $250K. Perhaps the easiest thing to do would be to make the fat cats capital gains tax rate equal to their income tax rate.
In any event, all the loopholes mentioned above can be closed. Hopefully a Democratic President with a Democratic Congress will actually close the loopholes. All it would take is some legislation that Obama could sign into law.
That's right. Income from a conceptual point of view is a positive change in wealth year over year. Income to a CFO or tax accountant is a whole different subject. Any discussions of tax policy that fail to address the definition of income are generally partisan bullshit.
That's how you can tell if someone is full of shit, BTW. When they talk about income taxes being unfair but don't talk about definitions of income.
Republicans used to be, but are not anymore, the party of conservatism and fiscal responsibility. Saying "Democrats are tax-n-spend socialists" is pretty much a joke now.
Want to blame 'Wall Street' or 'Washington'? That would be okay. I agree. Think it's a party issue? Democrats are going to steal your money, and republicans are for small government and fiscal sensibility? That's a joke.
Oh please, do any of you have an ex-roommate from law school whose sole job at KPMG is to figure out how corporations and rich executives can avoid tax obligations. I do (and he earns over 400k a year with no billable requirements to figure out how to avoid the tax code).
Last I saw, no "middle class" worker has that kind of firepower to figure out how to avoid taxes.
If you think that folks aren't going to work hard because of tax implications maybe you should examine the current state of the economy and accept the notion that folks are going to work hard to save their jobs. (Or are you taking McCain's position that we have stable fundamentals right now?) Or is that the new Republican byline--unemployment is the first step to being an entrepreneur?
Maybe you should wonder why Chris Buckley left the National Review or why David Brooks just wrote an article stating that the Republican party is now the anti-education party. Or how David Frum got his ass handed to him by Rachel Maddow a few nights ago. This isn't the party of Reagan 20 years ago.
Duke: The appointment of Sarah Palin should dispel any and all doubts as to the intentions of the Republican Party. That was pandering, pure and simple, and any attempts to claim otherwise is bulls**t.
The stalwarts of the Right are making no attempt to dress that move up as anything other than what it is, a shameless ploy to garner what now constitutes the "loyalist" vote for the GOP: un- or under-educated evangelicals who will blindly do as they're told by a political machine built to maintain nothing other than power.
This isn't Reagan's party; it isn't Goldwater's party; s**t it ain't even Nixon or Ford's party.
I won't be voting for either of these two clowns come November.
I agree with Gandalf's sentiment that we have entered a new and dangerous phase in our history and we need to move past "wedge issues" and the "culture wars" and "identity politics" and realize that we are standing on the edge of the abyss.
Whether the fat cats can get around Obama's tax increases will depend on whether Congress goes the extra step and closes any loopholes.
The concept is pretty simple: Anything someone receives for doing work should be taxed as income. This includes stock. Stock options should be taxed as income when they are exercised. All income above $250K should be subject to the Social Security and Medicare payroll taxes.
The capital gains rate should also increase for those with income+capital gains exceeding $250K. Perhaps the easiest thing to do would be to make the fat cats capital gains tax rate equal to their income tax rate.
In any event, all the loopholes mentioned above can be closed. Hopefully a Democratic President with a Democratic Congress will actually close the loopholes. All it would take is some legislation that Obama could sign into law.
Our tax system have so many wholes because it was written by the rich for the rich. You don't truly believe these fat cats in Washington actually care about you, do you? Who are you to draw $250k as rich? Why not $150k? that's a lot more than 85% of Americans. If you want to reward work, then stop rewarding people who don't work. Why would they work if they're getting rewarding for not working? A guy who's on welfare and who would get all these extra tax credit from Obama wouldn't want to get off his ass and get a minimum wage job to end up w/ less than what he gets for doing nothing.
I'm all for closing all the tax loop holes and make everyone pay their fair share, including all those people who don't have a job and are on welfare. They can do community service and such to EARN their welfare. I just don't see it happening. You can try and prove me wrong, but asking me to put my trust in a guy I don't know... well, I'll just have to say "In God I trust, everyone else, bring data".
AFF dude, you can say "bullshit" here. Ya' don't have to bl**p it out... fer chris' sake. I know this is Piggs and all, but all this Queen's English makes me feel like a total gutter urchin when I occasionally (and only occasionally) drop the f-bomb.
So what's the deal, anyway? You're a 7-11 robbing Raiders fan, but you can't curse or the nuns take away your Volvo?
Nice wheels, BTW. ;-)
Best,
G
Gandalf: Are you insane? Mess with me; mess with the Raiders; mess with Volvo Corporation, but for God's sake, don't mess with the nuns!
BTW, who is Chris and why are we invoking his name?
I'll work on the expletives.
Bullshit.
There, I said it.
"Study says most corporations pay no U.S. income taxes"
Reuters News Service
Aug 12, 2008
http://www.reuters.com/article/newsOne/i...
- - excerpt - -
The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.
More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.
Cool!
I'm all for closing all the tax loop holes and make everyone pay their fair share, including all those people who don't have a job and are on welfare. They can do community service and such to EARN their welfare. I just don't see it happening. You can try and prove me wrong, but asking me to put my trust in a guy I don't know... well, I'll just have to say "In God I trust, everyone else, bring data".
While there are probably some destitute folks that collect a check and don't have any plans or aspirations to get a job, there are a lot of folks out there who are facing real, stiff challenges in seeking employment. It takes money to make money, even in the minimum wage world. To get a job you have to have adequate (suitable) clothing, transportation, a minimal education (fill out a job app at McD's), etc. Many of the destitute are not well equipped--societally or financially--to even start a job search. And as you point out, the minimum wage/low wage market is not very appealing when you can make not much less by not working.
Someone posted some great data (I may track back and try to find it) about how a large percentage of those "lazy, jobless, tax evaders" are actually retirees and the disabled. Retirees often don't have the option to get employment since they are outside the employable age, may have physical limitations and they live on reduced incomes (be nice to Grandpa, the Walmart Greeter--hey, bonus to Walmart, he already collects Social Security and is eligible for Medicare!). Do you want to squeeze them for taking their tax rebates? How about the guy who is a paraplegic and also mentally disabled who puts together component parts on an assembly line 'cause he can't really find any other work? Oh, wait, his $8/hour job just got shipped overseas to Indonesia where they only have to pay $1/day--yeehaw, look at those corporate profits soar. And there are people who transition in and out of "poor" status--laid off and takes them a year or two to complete some courses to enter a new field...
My point? Don't generalize. At any given time, there are people "not working" and "not paying taxes" but they are not all baby-mamas and fat lazy union workers. Some really don't have any prospects or don't have enough hope or belief that the system will work for them. I suspect their numbers will be growing in the coming months as the economic nuclear fall-out starts wafting down on America's Main Streets.
While there are probably some destitute folks that collect a check and don't have any plans or aspirations to get a job, there are a lot of folks out there who are facing real, stiff challenges in seeking employment. It takes money to make money, even in the minimum wage world. To get a job you have to have adequate (suitable) clothing, transportation, a minimal education (fill out a job app at McD's), etc. Many of the destitute are not well equipped--societally or financially--to even start a job search. And as you point out, the minimum wage/low wage market is not very appealing when you can make not much less by not working.
Someone posted some great data (I may track back and try to find it) about how a large percentage of those "lazy, jobless, tax evaders" are actually retirees and the disabled. Retirees often don't have the option to get employment since they are outside the employable age, may have physical limitations and they live on reduced incomes (be nice to Grandpa, the Walmart Greeter--hey, bonus to Walmart, he already collects Social Security and is eligible for Medicare!). Do you want to squeeze them for taking their tax rebates? How about the guy who is a paraplegic and also mentally disabled who puts together component parts on an assembly line 'cause he can't really find any other work? Oh, wait, his $8/hour job just got shipped overseas to Indonesia where they only have to pay $1/day--yeehaw, look at those corporate profits soar. And there are people who transition in and out of "poor" status--laid off and takes them a year or two to complete some courses to enter a new field...
My point? Don't generalize. At any given time, there are people "not working" and "not paying taxes" but they are not all baby-mamas and fat lazy union workers. Some really don't have any prospects or don't have enough hope or belief that the system will work for them. I suspect their numbers will be growing in the coming months as the economic nuclear fall-out starts wafting down on America's Main Streets.
I agree with you regarding the retirees and disabled. I don't considered them in this category I'm generalizing about. The people I'm refering to are the people who could work but choose not to. I think they're still a decent portion of welfare recipient. I know many who came to this country with nothing more than the clothes on their back. They worked extremely hard, starting at the bottom with minimum wage. Then they got the education and moved on up. Some came here in their 20s, 30s, and even 40s, yet they all went through this path and now are doing decently well to extremely well.
There is a downward spiral in certain socio-economic areas that defies explanation but it is very real. I admire those who come her from afar, work hard and create for themselves the American Dream. Many times there is a support network of others who came before or others they want to help at home. Most of us who are native born are sons and daughters of an immigrant somewhere.
Ironically, I think that immigrants who come here actually have an advantage. There is a sort of collective "poor self-esteem" amongst many native born, poor Americans. And I think this rings true in "blighted" urban areas and destitute rural areas. Where the immigrant sees a land of opportunity, the domestic poor see oppression and see the odds stacked against them. Education is usually minimal or non-existent. Same for positive (or realistic) role models from their walk of life or alternative perspectives. Immigrant groups tend to help each other while domestic poor tend to drag each other down into the mud--they seem to not want their neighbors to succeed. I think there are many who pull themselves out of this cycle, but many fall prey to easy money (drug dealing and other illegal activities), substance abuse, etc.
It's really sad and paradoxical and many sociology types have studied it and can't find a way to fix it. I personally believe a message of hope will help, if only in a miniscule way.
Shadowfax, I agree with your assessment of the differences between the two groups. The question now is, how do we help these native born? Would penalizing those who made it and throwing more $ at this problem will help fix it? My personal opinion is, no. I've seen what hard work and determination can do and have done, so I think all the opportunities are there, whether these native born grab it or not is a whole different story. I can guarantee you that these "poor" native born haven't really seen poor. I can guarantee you that many people in my native country would trade their lives with the poorest here in the US in a heart beat.
That is very true--Americans are spoiled from the bottom to the top. Poor in Africa or Asia or the Middle East is several orders of magnitude worse than poor in America.
The key is that "you have seen what hard work can do." And the rumors or stories of that success are carried back to the "homeland" to entice more ambitious people to come to America to make their fortunes. There are not many success stories in the projects, the immigrant work camps or in the coal mines (lest anyone think I am advocating based on skin color). Many people do work hard in these groups (physical labor or long hours, though perhaps not skilled or educated work) and barely get by. And if you do get a little bit ahead, how do you protect yourself from being robbed by the neighbors? Police don't like to patrol these neighborhoods.
How do you instill a work ethic when there appears to be so little gain to such hard work. If there is an uncle or grandfather to look to as a success story, something tangible, then maybe some will persevere. But Uncle is in jail and grandpa died in a mine cave in...penniless.
It is a challenge to inspire and motivate people in these groups. Compounding all the rest, there is tremendous peer pressure not to excel! It's unimaginable. I don't think that we just turn off the spigot for these people, though it can seem daunting to throw good money after bad.
I sincerely believe that education is the key to most of our societal ills. Other than funding schools/teachers and supervising curriculum, not sure what else a government can do. You ultimately can't lead a horse to water....
It's a dilemma.
If you want to reward work, then stop rewarding people who don't work. Why would they work if they're getting rewarding for not working? A guy who's on welfare and who would get all these extra tax credit from Obama wouldn't want to get off his ass and get a minimum wage job to end up w/ less than what he gets for doing nothing.
How about we stop rewarding criminals like Bush has done with his $700 billion No Banker Left Behind Bailout? That, coupled with the $250 billion dollar direct taxpayer injection into the banks adds up to almost $1 trillion in welfare for the richest Americans (and even some foreigners).
This to me is despicable. Bush, Republicans, and people like you who vote for them are rewarding criminals who rape the system at every opportunity. I would much rather see a few thousand dollars in taxpayer money go to a family in need as opposed to over a trillion going to a criminal element of society who is also among the richest.
I guess we are different that way. You have no trouble giving over a trillion in taxpayer money to criminals, while I would prefer that taxpayer money be used to help with some of the social ills in this country.
How about we stop rewarding criminals like Bush has done with his $700 billion No Banker Left Behind Bailout? That, coupled with the $250 billion dollar direct taxpayer injection into the banks adds up to almost $1 trillion in welfare for the richest Americans (and even some foreigners).
Hope you're aware the majority of Democrats in the house voted for the $700B Bailouts.
People like me? Sorry to burst your bubble but I NEVER voted for Bush. I'm also not voting for McCain this year, just to get it out there so you don't look like a dumbass making false accusation. Yes, lets vote out all those Democrats and Republicans who voted for all these bailouts. I'm all for that. FYI, Obama voted for the bailouts. Ron Paul a REPUBLICAN voted AGAINST the bailouts. So, using your logic, since you support Obama, you are rewarding criminals who rape the system at every opportunity.
Once again, the candidate who I support did not vote for these bailouts, and yours did. So, you're the one who have no trouble giving over a trillion in taxpayer money to criminals.
asia, it's a hard situation. I'm not tring to change your mind or anything but it's not a black-and-white issue. I run a business working with large, reputable and solvent organizations. Calls to our clients these past couple of weeks to see if there were concerns about what was happening on Wall Street and in the markets. In particular, we have a couple of invoices pending.
Almost universally, they were very concerned. These aren't casual parties, day traders watching Bloomberg, they're senior management, accounting and systems people at large organizations trying to operate going-concerns with thousands of employees and work to do. They rely on bank credit and sophisticated cash management practices to operate.
If the crisis had been allowed to spiral out of control, and it still might, the impact on the general economy would have been much greater, possibly catastrophic, in terms of businesses being unable to meet obligations and possibly failing, jobs being lost, supply chains and transportation networks being disrupted, etc, etc.
I'm not supporting "No Banker Left Behind". I feel incredibly conflicted and am morally disgusted with the bailout. Just saying it's not an easy issue, and hard to paint in partisan terms -- Dems did this, Reps did that, etc. These are not ordinary times.
If it matters, I'm absolutely for Bailout version 2.0 over version 1.0, the "European Version". US Govt should receive equity in troubled banks with the opportunity to liquidate holdings once the markets regain footing. This is slightly less disgusting than relieving banks of bad loans. Both solutions are pretty much awful though.
People like me? Sorry to burst your bubble but I NEVER voted for Bush. I'm also not voting for McCain this year, just to get it out there so you don't look like a dumbass making false accusation. Yes, lets vote out all those Democrats and Republicans who voted for all these bailouts. I'm all for that. FYI, Obama voted for the bailouts. Ron Paul a REPUBLICAN voted AGAINST the bailouts. So, using your logic, since you support Obama, you are rewarding criminals who rape the system at every opportunity.
Good point. Ron Paul does seem to have the most economically sensible policies. It's too bad he's not on the ballot in California. I may yet vote for Bob Barr as Ron Paul's proxy. I will be voting against Democratic Representative Susan A. Davis because she voted for the bailout.
I'm not supporting "No Banker Left Behind". I feel incredibly conflicted and am morally disgusted with the bailout. Just saying it's not an easy issue, and hard to paint in partisan terms -- Dems did this, Reps did that, etc. These are not ordinary times.
If it matters, I'm absolutely for Bailout version 2.0 over version 1.0, the "European Version". US Govt should receive equity in troubled banks with the opportunity to liquidate holdings once the markets regain footing. This is slightly less disgusting than relieving banks of bad loans. Both solutions are pretty much awful though.
Each bailout is pretty horrible and each is designed to reflate the bubble. It's likely that each bailout will fail. If the bailouts "succeed", it willl likely lead to hyperinflation in the long run.
To me, it seems all that's needed is some full-reserve banks to deal with short-term business transactions. I believe CA Renter made this suggestion the other day. There's no reason the taxpayer should be on the hook to fund the profits generated from businesses "sophisticated cash-management techniques".