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Rave this if you are not a Paul Ryan fan.

Carol 2012/09/22 18:10:29
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Take a Look at What Paul Ryan Did to His Own Congressional District, and Be Very Scared for Your Country
Child abuse and suicide is skyrocketing, the number of battered women has tripled, foreclosures have tripled, wages plummeting, and more.
September 19, 2012 |
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Before Paul Ryan was anointed as the Republican vice presidential candidate, Ryan reigned as the GOP’s resident economic genius and “leading intellectual.”

However, this praise from major media outlets has long been divorced from the reality 1,000 miles away back in Ryan’s 1st Congressional District in southeastern Wisconsin. Even while Beltway media — and even President Obama — heaped kudos on Ryan for his bold economic proposals and “intellectual audacity,” the productive base and social health of his constituents have been severely deteriorating under the impact of the very policies he has aggressively championed.

Ryan trumpeted the $1.2 trillion in Bush tax cuts showered largely on the richest 1%, pushed for the deregulation of Wall Street financial manipulations, opposed 2007 efforts to rein in the financial industry’s increasingly risky practices but then voted for a virtually unconditional bailout of the big banks after the meltdown in 2008 in order to “save the free enterprise system.” Ryan also voted for the auto bailout without any provisions to prioritize US jobs including those in his district. Further, Ryan has been a consistent supporter of the “free trade” deals with low-wage, repressive regimes that have fueled the offshoring of jobs.

In recent years, Ryan’s home district has lost thousands of family-sustaining jobs. Its economic foundations have been dangerously hollowed out: Delco in Oak Creek shut down at a cost of 3,800 jobs, mostly going to Mexico; Chrysler in Kenosha had 850 jobs sent to Mexico with the help of auto industry “bailout” funds; and General Motors in his hometown of Janesville eliminated 2,800 jobs directly with its pre-Christmas 2008 plant closing, while GM kept open a low-wage plant with parallel capacities in Silao, Mexico. The GM shutdown in Janesville wiped out another 3,000 jobs in nearby supplier plants.

The three major industrial counties in Ryan’s district have endured devastating manufacturing job losses since 2000, with Kenosha County losing 30%, Racine County 33%, and Rock County an astonishing 54%.

PREDICTABLE RESULTS OF JOB LOSS

The results of Ryan’s policies and the resulting economic wreckage havebeen grimly predictable. The persistently high unemployment has been accompanied by rising signs of social disintegration and distress throughout most of the district.

• Foreclosures in Rock County — home to Janesville and Beloit — have quadrupled since 2000. They have nearly tripled throughout the entire district.

• In Janesville, the GM shutdown created such a surplus of workers begging for jobs that the average wage fell from $23.27 in 2007 to $18.82 in 2010.

• Within three months of the GM closing just before Christmas in 2008, the number of battered women seeking shelter at the YWCA’s Janesville family violence center nearly tripled.

• Janesville has been afflicted by a major increase in child abuse and neglect.

• Janesville’s rate of child poverty has nearly doubled to 47.1% since 2000. The percentage of children eligible for free or reduced-cost lunches ranges from 43% to 69% in the major cities of his district.

• Janesville has also experienced a near-doubling in suicides over the first two years since the GM closing.

OBLIVIOUS TO SUFFERING

Yet Ryan has remained oblivious to this massive suffering, seemingly driven by his embrace of Ayn Rand’s ideology of anti-social capitalism (which he recently and unconvincingly renounced in the face of complaints about her atheism). He has advocated and voted for cuts to the government protections and the social safety net desperately needed by families in his district trying to hang on to their cars, their homes, and their dignity.

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Top Opinion

  • Scalded Eagle 2012/09/23 15:39:04 (edited)
    What a guy
    Scalded Eagle
    +124
    Paul Ryan is 10 times smarter than Joe Biden and is 100 times better for the future of our America. Paul Ryan for VP America Romney Ryan Iwo Jima Flag

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Opinions

  • jack_kazim 2013/05/23 07:50:35
    Not a fan
    jack_kazim
    Call single moms working two jobs "takers" with poor work ethic. Only works 126 days a year.
  • ZeldaFan13 2012/11/06 18:10:14
  • mountainman 2012/10/12 04:22:43
    Undecided
    mountainman
    +3
    In this article you site many reason why We should hate Ryan. So, here is the real and true reason things have gone so bad in his district. Every since Bush Sr. brought the NAFTA agreement out of the drawer of deceit by the Federal Government, things have been sliding down hill every since. I don't think that President Clinton ever planned on signing this agreement into law, but I think that the powers in Washington DC blackmailed Clinton into signing it. "Blackmailed" you ask? Yup...Monica Lewinski. Blowjob queen of Washington. She got Bill in her mouth and the dishonest groups in Washington threatened Bill Clinton, forcing Him to shgn the law anyway. Then they stab him in the back. Go figure............
  • 22RIDE 2012/09/30 22:32:49
  • GwenhwyvarMerchRhufon 2012/09/29 02:12:23
    Not a fan
    GwenhwyvarMerchRhufon
    +6
    Douchebag Supreme!!
  • Joves the Instigator 2012/09/29 00:23:15
    Not a fan
    Joves the Instigator
    +2
    Well I am not a fan of Ryan, but then I am not a fan of Biden either. The so called Ryan Budget is the same old business as usual in DC of only cutting the amount the government spends. The problem is the spending still increases, and what are called cuts are nothing of the thing. To cut would mean no increases, and cutting back from the current budget, which is what needs to happen.
  • Frannin 2012/09/28 23:02:50
    Not a fan
    Frannin
    +5
    Not a truthful man.
  • Butterfly 2012/09/28 17:37:57 (edited)
    Undecided
    Butterfly
    +1
    What a fool you must be to write this thread. WHO DO YOU THINK IS THE PRESIDENT? wHO DO YOU THINK, HAS A SAY, IN ALL THOSE THINGS YOU WANT TO 'BLAME' RYAN FOR? Let me help you. BARACK,,,,,,HOUSSEIN,,,,,,,OB... I am depressed, since he has been president, house's have been fourclosed on since obama has been president, wages plummeting since........ Obama. (all those liberal/DEM programs=obama) Aren't YOU a little confused? Obama and congress make these laws. Obama can sign them or veto. You want to blame Ryan? What planet are you on??????????
    I am VERY SCARED for our country, with obama as president. We have been down graded from AAA, to AA, and talk of doing it AGAIN, to A.
    OBAMA is at the helm, ,,,,,not Ryan! Talk about twisted, and delusional thinking. You want to blame Ryan for crime? How about OBAMA?
  • Mopeder Butterfly 2012/09/29 11:17:17
    Mopeder
    +2
    [Click This To Register]
  • Crank_It_Up 2012/09/28 10:14:00
    Not a fan
    Crank_It_Up
    +6
    not a fan of ryan, top 3 reasons... I'm pro choice on abortion and I am for equal marriage rights regardless of gender preference. I don't agree with his plan for deep cuts in medicaid, why screw over the disabled, elderly, and poor?
  • Carol Crank_I... 2012/09/28 15:52:15
    Carol
    +1
    I think you have covered it nicely.
  • Lady Wh... Carol 2012/10/10 13:14:54
    Lady Whitewolf
    +1
    I second.
  • Butterfly Crank_I... 2012/09/28 18:09:04
    Butterfly
    +1
    ugh, slow computer, visiting, just deleted all my writing! I'll shorten my note, I gave you ACTUAL facts, not dem propaganda. Don't you and Carol READ? Do you do ANY research? YOu just belieive the propaganda? It makes you all look foolish, to those who KNOW WHAT IS GOING ON. Obama is messing with medicare and medicaid. He has already cut 500 billion from medicare. Talk to your pharmicist. My relative has to pay TWICE the amount for his lipitor. My medicaltion is MORE. Obama, is cutting FICA tax; that is where Socail Security and medicare receive their FUNDING. Medicaid is WELFARE. Seniours had thier SS FROZEN for three years. The little raise to SS, was taken out in medicare premiums, and my friend, had her food stamps REDUCED by 20,00 dollars, because her SS was increased by that amount.
    So, you like the killing of baby's? Then, you want gay mariages? Good thing, they still ALLOW, SPERM AND EGG DONORS, or else we would become extint. I don't mind, having LESS people like the DEMS though. Have at it; genocide your heritage.
  • Adakin ... Butterfly 2012/09/29 18:52:19
    Adakin Valorem~PWCM~JLA
    Social Security has been in deficit since 2010. It's loosing $40 Billion per year, having to cash in its IOUs from the Fed. SSTF has 45 million beneficiaries. Baby boomers are now hitting the age where they can claim benefits... and there are over 80 million of them!

    That's 300% more than there are today. If there is today a deficit, what do you think we will have when there are over 120 million seasoned citizens with their hand out demanding what they paid into the system all of their working life?

    Carol? What's Obama's Plan? I don't like Ryan's plan, but at least he has one! And it can be negotiated and or modified... And Gary Johnson's plan is viable as well!

    Again, what's Barry's plan?
  • flrdsgns Butterfly 2012/10/06 00:31:58
    flrdsgns
    So your friend is receiving food stamps? Maybe your friend should go find a job and get off welfare.
  • Carol Butterfly 2012/10/07 18:48:01
    Carol
    Not only did the wealthy get a two-year pass on their income tax rate, but they are also going to benefit from two other features of the compromise:


    A one-year cut in the payroll tax: To make up for the loss of the expiring Making Work Pay tax credit -- the middle-class tax cut that no one really noticed -- the White House extracted a one-year reduction in the Social Security payroll tax paid by employees from 6.2 percent to 4.2 percent. What's interesting is that Make Work Pay had an income limit: it was completely phased out for individuals making $95,000 or more, and joint filers with income above $190,000. The proposed 2011 payroll tax reduction apparently applies to everyone, at a reported cost of $120 billion in foregone tax revenue. That means an extra $2,172 $2,136 in the 2011 paychecks for all Americans making at least $106,800, the current maximum amount of income subject to the FICA tax. The goal of this tax break is to give a jolt to the anemic economic recovery on the assumption that everyone -- the middle class and the truly wealthy -- will go out and spend that money.

    A big break in the estate tax. When we last left off with the estate tax in 2009, it was being levied on estates above $3.5 million ($7 million for married couples) at a top rate of 45 percent. The e...










    Not only did the wealthy get a two-year pass on their income tax rate, but they are also going to benefit from two other features of the compromise:


    A one-year cut in the payroll tax: To make up for the loss of the expiring Making Work Pay tax credit -- the middle-class tax cut that no one really noticed -- the White House extracted a one-year reduction in the Social Security payroll tax paid by employees from 6.2 percent to 4.2 percent. What's interesting is that Make Work Pay had an income limit: it was completely phased out for individuals making $95,000 or more, and joint filers with income above $190,000. The proposed 2011 payroll tax reduction apparently applies to everyone, at a reported cost of $120 billion in foregone tax revenue. That means an extra $2,172 $2,136 in the 2011 paychecks for all Americans making at least $106,800, the current maximum amount of income subject to the FICA tax. The goal of this tax break is to give a jolt to the anemic economic recovery on the assumption that everyone -- the middle class and the truly wealthy -- will go out and spend that money.

    A big break in the estate tax. When we last left off with the estate tax in 2009, it was being levied on estates above $3.5 million ($7 million for married couples) at a top rate of 45 percent. The estate tax has been on hiatus in 2010 and was scheduled to come roaring back next year at its 2001 level: a 55 percent tax on estates above $1 million. No one really expected that to happen, but the deal announced by President Obama sure seems like a huge capitulation to the Republicans. In fact, the President went out of his way in the press conference announcing the deal to clarify that he wasn't too pleased with this outcome. The new estate tax rate will only be levied on estates over $5 million ($10 million for couples), and the 45 percent rate of 2009 dips to 35 percent for 2011 and 2012.

    Assuming the framework of the deal announced Monday night makes its way through Congress, here's what you can look forward to in 2011 and 2012 and some tips on how you should respond:

    Income tax rates: Nothing changes from today. The top two tax brackets, which President Obama had vowed to raise, will instead remain at 33 percent and 35 percent. Even the millionaires and billionaires will see their tax rate hold steady, not just the middle class.
    Strategy: As you would normally, if you have the option of deferring income (and thus, taxes) into next year, go for it. But pull as many deductions as possible into this year so you can benefit from those now. If you've converted a Roth retirement account this year, or plan to by year-end, it certainly makes sense to take advantage of the one-time tax deal being offered for 2010 conversions that allows you to spread the tax bill over the next two years.

    Capital gains and dividend taxes: No change here, either. President Obama had wanted the current 15 percent rate to float up to 20 percent for wealthy Americans in the top two tax brackets. But the compromise keeps the rate at 15 percent for everyone.

    Strategy: This increases the allure of dividend stocks even more for income-starved investors.

    A "patch" for the Alternative Minimum Tax (AMT): A patch that will raise the AMT exemption to account for inflation has been agreed to. According to the New York Times, the threshold for the AMT will be adjusted so that as many as 21 million households would not be subject to it.
    (more)
  • Lady Wh... Carol 2012/10/14 14:35:51
    Lady Whitewolf
    "Not only did the wealthy get a two-year pass on their income tax rate, but they are also going to benefit from two other features of the compromise:"

    And that sure don't help the poor and middle class!
  • Eric 2012/09/28 06:35:36
    Undecided
    Eric
    +4
    Interesting rant. You do realize that a Congressman really has nothing to do with his district in any meaningful sense, right? Local mayors, county commissioners, and the governors handle that while the Congressman represents the district on national issues, with 1/435th of the power in the House.
  • Maynard Eric 2012/09/28 11:32:10
    Maynard
    +4
    You just offered FACTS,

    You must be CONSERVATIVE.

    I will continue thru the THREAD TO SEE WHO HAS A BRAIN, Thanks.
  • Carol Eric 2012/09/28 17:35:17
    Carol
    +2
    He has advocated and voted for cuts to the government protections and the social safety net desperately needed by families in his district trying to hang on to their cars, their homes, and their dignity.
  • Adakin ... Carol 2012/09/28 18:51:59
    Adakin Valorem~PWCM~JLA
    Carol from what I've seen, the cuts that Rep. Ryan has supported are cuts in the rate of growth of these entitlements.

    Can you provide specific details on actual dollar amount cuts (i.e. real reductions) in current benefits that Ryan has supported? Please do so with specific citation and not just platitudes and generalities... Thanks AV
  • Carol Adakin ... 2012/09/29 15:12:19
    Carol
    +1
    Maybe this Forbes story will be helpful.

    No surprise here, but the tax cuts in Paul Ryan’s 2013 budget plan would result in huge benefits for high-income people and very modest—or no— benefits for low income working households, according to a new analysis by the Tax Policy Center.

    TPC looked only at the tax reductions in Ryan’s plan, which also included offsetting–but unidentified–cuts in tax credits, exclusions, and deductions. TPC found that in 2015, relative to today’s tax system, those making $1 million or more would enjoy an average tax cut of $265,000 and see their after-tax income increase by 12.5 percent. By contrast, half of those making between $20,000 and $30,000 would get no tax cut at all. On average, people in that income group would get a tax reduction of $129. Ryan would raise their after-tax income by 0.5 percent.


    Nearly all middle-income households (those making between $50,000 and $75,000) would see their taxes fall, by an average of roughly $1,000. Ryan would increase their after-tax income by about 2 percent.

    Ryan would extend all of the 2001/2003 tax cuts, and then consolidate individual rates to just two—10 and 25 percent. In addition, he’d repeal the Alternative Minimum Tax, reduce the corporate rate from 35 percent to 25 percent, and kill the tax provisio...









    Maybe this Forbes story will be helpful.

    No surprise here, but the tax cuts in Paul Ryan’s 2013 budget plan would result in huge benefits for high-income people and very modest—or no— benefits for low income working households, according to a new analysis by the Tax Policy Center.

    TPC looked only at the tax reductions in Ryan’s plan, which also included offsetting–but unidentified–cuts in tax credits, exclusions, and deductions. TPC found that in 2015, relative to today’s tax system, those making $1 million or more would enjoy an average tax cut of $265,000 and see their after-tax income increase by 12.5 percent. By contrast, half of those making between $20,000 and $30,000 would get no tax cut at all. On average, people in that income group would get a tax reduction of $129. Ryan would raise their after-tax income by 0.5 percent.


    Nearly all middle-income households (those making between $50,000 and $75,000) would see their taxes fall, by an average of roughly $1,000. Ryan would increase their after-tax income by about 2 percent.

    Ryan would extend all of the 2001/2003 tax cuts, and then consolidate individual rates to just two—10 and 25 percent. In addition, he’d repeal the Alternative Minimum Tax, reduce the corporate rate from 35 percent to 25 percent, and kill the tax provisions of the 2010 health reform law.

    Earlier this week, TPC projected the tax cuts in Ryan’s budget would add $4.6 trillion to the federal deficit over the next decade, even after extending the 2001/2003 tax cuts, which would add another $5.4 trillion to the deficit.

    Ryan argues that eliminating or scaling back deductions, credits, and exclusions ought to be part of the GOP fiscal plan. But he won’t say how.

    Cuts in those tax preferences could make a big difference in determining who wins and who loses from the tax portion of his budget. But until House Republicans describe which they’d cut, there is no way to estimate what those base-broadeners would mean.

    In truth, unless Republicans raise taxes on capital gains and dividends, it is hard to imagine the highest income households getting anything other than a windfall from this budget. Other tax preferences, such as the mortgage interest deduction, are just not that valuable to them.

    And since no high-profile Republicans want to raise taxes on gains and dividends (and many would cut investment taxes even further) this budget would likely result in a huge tax cut for those who need it least. That’s not a great way to start an exercise whose stated goal is to eliminate the budget deficit.
    (more)
  • Adakin ... Carol 2012/09/29 18:29:41 (edited)
    Adakin Valorem~PWCM~JLA
    Carol - full disclosure... Please note that I'm a huge advocate, not of the Ryan plan, but of the FAIRTAX bill (HR-25/S-13) currently in congress (with over six dozen bipartisan cosponsors in both house and senate) Among POTUS candidates, only Gary Johnson advocates passage of the FairTax bill. And William Gale, of TPC/Brookings Institute did a remarkable hit job on his biased analysis of the FairTax bill... an analysis that has been debunked for its lack of dynamic (versus static) consideration. Anyway, back to your Ryan discussion...

    == == ==
    "TPC looked only at the tax reductions in Ryan’s plan, which also included offsetting–but unidentified–cuts in tax credits, exclusions, and deductions. TPC found that in 2015, relative to today’s tax system, those making $1 million or more would enjoy an average tax cut of $265,000 and see their after-tax income increase by 12.5 percent. By contrast, half of those making between $20,000 and $30,000 would get no tax cut at all. On average, people in that income group would get a tax reduction of $129. Ryan would raise their after-tax income by 0.5 percent."

    First of all, the Tax Policy Center, one of the two authors that did the above study served on Obama's Council of Economic Advisers from 2009 to 2010. So much for unbiased analys...


























































    Carol - full disclosure... Please note that I'm a huge advocate, not of the Ryan plan, but of the FAIRTAX bill (HR-25/S-13) currently in congress (with over six dozen bipartisan cosponsors in both house and senate) Among POTUS candidates, only Gary Johnson advocates passage of the FairTax bill. And William Gale, of TPC/Brookings Institute did a remarkable hit job on his biased analysis of the FairTax bill... an analysis that has been debunked for its lack of dynamic (versus static) consideration. Anyway, back to your Ryan discussion...

    == == ==
    "TPC looked only at the tax reductions in Ryan’s plan, which also included offsetting–but unidentified–cuts in tax credits, exclusions, and deductions. TPC found that in 2015, relative to today’s tax system, those making $1 million or more would enjoy an average tax cut of $265,000 and see their after-tax income increase by 12.5 percent. By contrast, half of those making between $20,000 and $30,000 would get no tax cut at all. On average, people in that income group would get a tax reduction of $129. Ryan would raise their after-tax income by 0.5 percent."

    First of all, the Tax Policy Center, one of the two authors that did the above study served on Obama's Council of Economic Advisers from 2009 to 2010. So much for unbiased analysis. But let's look at part of the above statement: "By contrast, (to the million AND ABOVE earner) half of those making between $20,000 and $30,000 would get no tax cut at all" Under current tax law, "those making between $20,000 and $30,000" really pays only FICA taxes, which is not addressed in the TPC analysis.

    As you know, 47% percent of the lower income brackets, pay no income taxes at all, once ALL deductions, AMT and other mitigating adjustments are accounted for. So to claim that the Million Dollar wage earner, who pays well over $400,000 in income taxes, gets a tax cut that averages $265k (note that the TPC statement includes those making "$1 million or more" but doesn't provide the ceiling figure, just the "or more". But then they shift from apples to oranges, when they say "a tax cut that averages $265,000" without telling us what the max income used in their analysis.

    If you earned $10 million, you would have been included in the above "those making $1 million or more" group, but even if you paid only the 14% that Romney paid, that would still be over $1,400,000... and if you earned what Buffett earned in dividend income, or Jamie Damon earned in income the gross figure would be in the $20 to $50 million range. So suddenly that "average tax cuts of $265,000 is quite irrelevant when the total tax bill for folks in that bracket can be 10x or 20x that mount of savings.

    Please remember that the top 10% of income earners pay over 90% of all Federal income taxes. That may be the reason why WSJ said of the TCP report: "TPC Is "A Liberal Think Tank" And Its Study Is "A Highly Ideological Tract."

    A Wall Street Journal editorial on the Tax Policy Center's analysis derided the nonpartisan organization as "class warriors."

    The editorial continued: "[Obama's] charge is that even though Mr. Romney is proposing to cut tax rates for everybody across the board, Mr. Romney will finance this by imposing a tax increase on the middle class. His evidence is a single study by the Tax Policy Center, a liberal think tank that has long opposed cutting income tax rates. The political left always says Daddy Warbucks gets all the tax-cut money.

    So this is hardly news, except that the media are treating this joint Brookings Institution and Urban Institute analysis as if it's nonpartisan gospel. In fact, it's a highly ideological tract based on FALSE assumptions, incomplete data and dishonest analysis. [The Wall Street Journal, 8/7/12]

    == == ==
    "Earlier this week, TPC projected the tax cuts in Ryan’s budget would add $4.6 trillion to the federal deficit over the next decade, even after extending the 2001/2003 tax cuts, which would add another $5.4 trillion to the deficit"

    If you use a static analysis, the TPC projection is correct.

    But in the real world, or in a viable DYNAMIC analysis, people change their behavior when tax laws change. People adapt and the TPC projection assumes that nothing other than the control item is the variable.

    == == ==
    "In truth, unless Republicans raise taxes on capital gains and dividends, it is hard to imagine the highest income households getting anything other than a windfall from this budget"

    And its a good thing too... increasing cap gains and taxes on dividends further discourages investment and capital availability in a dynamic environment ... something that the TCP analysis did not consider!

    == == ==
    "Other tax preferences, such as the mortgage interest deduction, are just not that valuable to them"

    Nor are they valuable to any one else. With typical mortgage rates below 4% and the housing values in the tank, fewer than 40% of home owners are even bothering to take the MID as a write off, especially for lower income bracket home owners.

    Again, no real world Dynamic consideration was given in the TCP analysis (only innuendo like "its just not that valuable to them").

    == == ==
    "And since no high-profile Republicans want to raise taxes on gains and dividends (and many would cut investment taxes even further) this budget would likely result in a huge tax cut for those who need it least. That’s not a great way to start an exercise whose stated goal is to eliminate the budget deficit."

    If the assumption is that one could tax their way into elimination of a $1.4 Trillion budget deficit, then you are starting out with a flawed assumption.

    Even IF the goal is the elimination of the budget deficit...if you taxed 100% of ever dime earned by people that make more than $250k/yr, you still would come up short by over $600 Billion (in the first year only).

    But in the second year, the high wage earners that could... would simply leave! Those that worked to earn more, would simply have left the high tax jurisdiction and moved to a lower tax environment.

    Reason shows us that as people that have the ability to do so, higher income folks will typically move from their high crime neighborhood (i.e. high tax jurisdiction) to a safer one where they won't be robbed.

    That's exactly what NY, NJ, CA and Illinois discovered with their 'millionaires tax' that has cost these state more money than the revenue it has garnered as the higher income folks (typically the small business owners) move out of state. And when they leave, they take their businesses with them leaving their former employees to become wards of the state. Bloomberg noticed that after NYC increased their 'millionaire tax' and revenue dropped after considering that unemployment comp claims increased.

    == == ==
    The issues brought up by the TCP analysis are some of the reasons why I am an advocate of the FairTax instead of advocating the reforms that Ryan pushes.

    Reagan's Tax Reform Act of 1986 gave us just three simple tax brackets and eliminated a ton of deductions and loopholes, increasing GDP growth, increased tax revenue and relative prosper, but that law now has over a dozen brackets and 70,000 pages of additional loopholes and regulations.

    Ryan's plan would evolve the same way and we would be right back in the same boat we are in today!

    On the other hand, the FairTax would mandate abolition of the 16th amendment, thereby eliminating this 'evolution' from simplicity to complexity as has been the historical trend for every income tax reform we've had over the past 100 years.

    (Yup, the 16th Amendment will be 100 years old in 2013!)

    Please... support the candidates and congresscritters that support the FairTax bill!

    FairTax FairTax
    (more)
  • Carol Adakin ... 2012/09/29 18:40:27
    Carol
    Summary
    In our recent article on the second GOP debate, we called out Gov. Mike Huckabee as well as Reps. Tom Tancredo and Duncan Hunter for their support of the FairTax. We wrote that the bipartisan Advisory Panel on Tax Reform had “calculated that a sales tax would have to be set at 34 percent of retail sales prices to bring in the same revenue as the taxes it would replace, meaning that an automobile with a retail price of $10,000 would cost $13,400 including the new sales tax.” A number of readers pointed out that H.R. 25, the specific bill mentioned by Gov. Huckabee, calls for a 23 percent retail sales tax and not the 34 percent used by the Advisory Panel on Tax Reform. That 23 percent number, however, is misleading and based on some extremely optimistic assumptions. We found that while there are several good economic arguments for the FairTax, unless you earn more than $200,000 per year, fairness is not one of them.

    Update June 14: In a letter, Americans for Fair Taxation wrote to say that it disagrees “very strongly” with FactCheck’s analysis of the FairTax. For their objections and our response, see the end of the “Analysis” section.
    Analysis
    How to Make 30 Look Like 23

    Americans for Fair Taxation offers the following plain-language interpretation of H.R. 25:
    Americans for F...












































    Summary
    In our recent article on the second GOP debate, we called out Gov. Mike Huckabee as well as Reps. Tom Tancredo and Duncan Hunter for their support of the FairTax. We wrote that the bipartisan Advisory Panel on Tax Reform had “calculated that a sales tax would have to be set at 34 percent of retail sales prices to bring in the same revenue as the taxes it would replace, meaning that an automobile with a retail price of $10,000 would cost $13,400 including the new sales tax.” A number of readers pointed out that H.R. 25, the specific bill mentioned by Gov. Huckabee, calls for a 23 percent retail sales tax and not the 34 percent used by the Advisory Panel on Tax Reform. That 23 percent number, however, is misleading and based on some extremely optimistic assumptions. We found that while there are several good economic arguments for the FairTax, unless you earn more than $200,000 per year, fairness is not one of them.

    Update June 14: In a letter, Americans for Fair Taxation wrote to say that it disagrees “very strongly” with FactCheck’s analysis of the FairTax. For their objections and our response, see the end of the “Analysis” section.
    Analysis
    How to Make 30 Look Like 23

    Americans for Fair Taxation offers the following plain-language interpretation of H.R. 25:
    Americans for Fair Taxation: A 23-percent (of the tax-inclusive sales price) sales tax is imposed on all retail sales for personal consumption of new goods and services.
    It is the parenthetical that is important, for it hides the real truth of the tax rate.

    First consider the way in which sales tax is normally figured. A consumer good that carries a $100 price tag might be subject to a 5 percent sales tax. That means that the final bill for the item is $105. The 5 percent figure is the amount of tax that is charged on the original purchase price. But now suppose that instead of pricing the item at $100, the shop owner simply priced the item at $105, then sent $5 directly to the state. The $105 price would be a tax-inclusive sales price. But $5 is just 4.8 percent of $105. That 4.8 percent number, however, is relatively meaningless. You are still paying exactly the same 5 percent tax on the item.

    The 23 percent number in H.R. 25 is the equivalent of the 4.8 percent in the previous example. To calculate the real rate of the sales tax, we have to determine the original purchase price of an item. We can begin with the same $100 item, keeping in mind that a price tag that reads $100 has sales tax already built in. If our tax rate is 23 percent of the tax-inclusive sales price, then of the $100 final price, $23 of those dollars will be for taxes, meaning that the original pre-tax price of the item is $77. To get $23 in taxes on a $77 item, one must impose a 30 percent tax. In other words, a 23 percent sales tax on the tax-inclusive sales price is equivalent to a 30 percent tax on the actual price of the item.

    FairTax proponents object to the 30 percent number, claiming that critics use the larger number to frighten people. Americans for Fair Taxation claims that it uses the tax-inclusive number to make it easier to compare the FairTax to the income tax that it will replace (since most of us think of income tax rates on an inclusive basis). But we are not accustomed to thinking of sales taxes inclusively. The result is that many FairTax supporters (about 15 percent of those who wrote to us, for example) do not understand that the 23 percent figure is tax inclusive.

    Our analysis of the FairTax used a figure of 34 percent as the basic exclusive tax rate. One e-mailer complained that our number was at least 10 percentage points “higher than [the FairTax] is” because we calculated it as an addition to retail prices. But our 34 percent number is not 10 percentage points higher than the legislation. A 34 percent exclusive number is equivalent to a 25 percent tax inclusive rate – only 2 percentage points higher than the FairTax bill. We think that, intentional or not, the use of the tax-inclusive 23 percent rate has misled a lot of FairTax proponents.

    But 30 Is Not 34 Either

    Americans for Fair Taxation, however, has complained that H.R. 25 calls for a 23 percent inclusive (or 30 percent exclusive) rate, not a 34 percent rate. Our number came from the President's Advisory Panel on Tax Reform (scroll to chapter 9 for the panel's discussion of the FairTax), which calculated that a 34 percent rate on the actual price of consumer goods would be necessary to make the program revenue-neutral. Americans for Fair Taxation has said that the Advisory Panel did not use the FairTax as detailed in the legislation but instead made up its own plan. This complaint is disingenuous. The Advisory Panel did in fact begin with the 30 percent figure that proponents of the FairTax submitted. But the panel rejected those figures, claiming that they were based, at least in part, on the unrealistic assumption that there would be full compliance with the FairTax. In other words, proponents assume that no one will cheat on taxes. However, the Treasury Department estimates that the evasion rate for the entire U.S. tax system under current law is approximately 15 percent. The Advisory Panel accordingly assumed a 15 percent evasion rate for the FairTax.

    More significantly, however, the panel found that FairTax supporters were employing questionable accounting. In calculating federal revenue, proponents assumed that purchases made by the federal government would be taxed at the full 30 percent rate. But when calculating federal expenditures, FairTax proponents did not factor in the additional costs of the 30 percent sales tax. The Advisory Panel thus threw out the revenue from federal purchases, noting (correctly) that increased revenue from taxing federal purchases is exactly canceled by increased costs in the federal budget. Unfortunately, the Advisory Panel has thus far refused to release its methodology, making it difficult to reconcile its projections with those of Americans for Fair Taxation.

    Using a formula that corrects for the faulty assumption about government spending, William Gale, director of the economic studies program at the Brookings Institute, calculates that a 39.3 percent exclusive rate would be necessary for revenue neutrality. (We used the lower Advisory Panel number). A more recent study by FairTax supporter and Boston University economist Laurence Kotlikoff – working from Gale’s formula and adopting the same basic assumptions – determines that a 31.2 percent exclusive (or 23.8 percent tax-inclusive) rate would be sufficient.

    Even if Kotlikoff is correct that a 31.2 percent rate is revenue-neutral, there remains some reason to doubt that the rate actually would be that low. The FairTax proposal assumes a 100 percent tax base on consumption. By way of contrast, most states that have sales taxes have roughly a 50 percent tax base. With the FairTax’s 100 percent base, consumers would pay taxes on a great many things that may not intuitively seem like consumption. The list would include:
    Purchases of new homes
    Rent
    Interest on credit cards, mortgages and car loans
    Doctor bills
    Utilities
    Gasoline (30 percent in addition to current taxes, which would not be repealed)
    Legal fees
    At today’s prices, gasoline would cost almost $1 per gallon more. A $150,000 new home would run $195,000 – plus the 30 percent tax that the buyer would pay on the interest on the mortgage. In short, the FairTax taxes everything that one buys, with the one notable exception of education. Any exceptions to the tax base (for instance, eliminating rent or credit card interest from the tax base) would require an offsetting increase in the rate.

    But the FairTax Will Lower Prices

    Proponents of the FairTax point out that prices on consumer goods contain what are called “hidden taxes.” Under current law, corporations have to pay taxes on their earnings. Moreover, businesses have to pay social security taxes for each employee. The money to pay these taxes has to come from somewhere, and FairTax supporters argue that the cost is passed on to the consumer. In fact, the best-known proponent of the FairTax, talk-show host Neal Boortz, argues that 22 percent of the price of a consumer good is really a “hidden tax.” Get rid of corporate and social security taxes, Boortz argues, and consumer good prices would drop by 22 percent. Even with the 23 percent FairTax, prices stay the same, and with the elimination of income taxes, paychecks will get bigger. Everyone gets a raise and the federal government still gets its revenue. About 10 percent of the e-mail messages we received from FairTax proponents trumpeted this kind of magic act. It is easy to understand the confusion on the issue, as Boortz himself made similar assertions in the hardcover edition of his book. (He later issued a corrected version in paperback.)

    A bit of critical analysis shows that this cannot be right. The FairTax is revenue-neutral. That means that for every tax dollar collected under the current system, the FairTax has to collect a dollar. If the FairTax exactly equaled embedded taxes, then it could not possibly be revenue-neutral, since embedded taxes do not take into account personal income or estate taxes. The FairTax rate would have to be high enough to replace embedded taxes plus income and estate taxes.

    Chris Edwards, the Cato Institute's director of tax policy studies, points out that prices do not really matter; corporate, payroll, income and estate taxes currently generate approximately $2.4 trillion, and a revenue-neutral FairTax would still require that taxpayers pony up $2.4 trillion. Nor is it clear that the 22 percent embedded tax figure is particularly meaningful. David Burton, chief economist of the Americans for Fair Taxation, calls it "simplistic" to think that the entire cost of corporate taxes is borne by consumers. Cato's Edwards suggests that while consumers do pay at least part of the costs, producers also bear some of the burden. That is, employees pay part of the costs of hidden taxes (in the form of lower wages), and corporate shareholders pay another portion (in the form of lower returns on their investments).

    The FairTax: Is It Regressive?

    Sometimes sales taxes are called regressive, meaning that the poorest pay higher rates than the wealthy. Strictly speaking, sales taxes are flat, since everyone pays the same rate. But because the poor tend to spend a high percentage of their income on basic consumer goods such as food and clothing, sales taxes do require the poor to pay a higher percentage of their income in taxes.

    The FairTax plan, however, helps to alleviate this difficulty by exempting sales taxes on all income up to the poverty level. Taxpayers would receive a "prebate," which Edwards calculates to be about $5,600 annually. The Treasury Department estimates that the prebate program would cost between $600 billion and $700 billion annually, making it the largest category of federal spending. Americans for Fair Taxation disputes the Treasury Department numbers, claiming that the actual cost would be closer to $485 billion per year. The Treasury Department has so far refused to release its methodology, making it difficult to determine whose estimate is correct.

    Who Really Pays?

    With the prebate program in effect, those earning less than $15,000 per year would see their share of the federal tax burden drop from -0.7 percent to -6.3 percent. Of course, if the poorest Americans are paying less under the FairTax plan, then someone else pays more. As it turns out, according to the Treasury Department, “someone else” is everybody earning between $15,000 and $200,000 per year. The chart below compares the share of the federal tax burden for different income groups under the current system and under the FairTax. Those in the highest and the lowest brackets will see their share decrease, while everyone else will see their share of taxes increase.
    (more)
  • Adakin ... Carol 2012/09/29 20:15:31
  • Adakin ... Carol 2012/09/29 20:54:53 (edited)
    Adakin Valorem~PWCM~JLA
    Carol, a 'must read' for you should be "Bailout" by Neil Barofsky. I'm halfway through it and the author was a Democrat and Bush appointee for oversight of the $800Billion TARP program.

    He was there at the end of the Bush administration and the first year or so of Obama administration before leaving in frustration in both the G.W. and Barry management methods, how both administrations had a revolving door between Treasury, FedReserve and Wall Street, how the Wall Street guys protected their pals at Treasury and vise versa... and mostly how the Treasury Dept spun everything they touched (or redacted everything) to work so as to maintain the corrupt status quo.

    Bailout by Neil Barofsky
  • Carol Adakin ... 2012/09/29 21:19:48
    Carol
    Thanks, I will look for it.
  • Eric Carol 2012/09/29 06:39:38
    Eric
    +1
    I think that he is advocating for math. We do not have unlimited money. About $1 out of every $3 that the Feds spend is being charged on the credit card that someone will have to pay sometime. If we had unlimited money then we could afford all that stuff. Charging 100% tax rate on the super rich will not cover our debt. Every man, woman, and child owes about $50,000 to pay the $16 Trillion national debt.

    It would be nice to live in a fanasy world in which everyone gets everything but unfortunately we live in reality. There is no free lunch. Obama knows that we will run out of money but he hopes people won't notice until he is gone, or at least re-elected for the last time.

    As an older person, I feel bad about leaving so much debt for younger people. Social Security was established when average life expectancy was 66 year. Now SS and medicare has to pay for people living to an average age of 79. Some changes have to be made or the youth of the country will always live a lower standard of living then us older people have had.
  • twiggy 2012/09/28 03:13:47
    Not a fan
    twiggy
    +7
    Creepy frat boy.
  • Maynard twiggy 2012/09/28 11:32:50
    Maynard
    +2
    HATE MUCH?

    Don't believe in COLLEGE?

    Nothing of SUBSTANCE in your post?


    TYPICAL LIBERAL DEFINED.
  • Butterfly Maynard 2012/09/28 18:12:26
    Butterfly
    So true, they are 'cookie cutter' people. They all sound the same. I can tell by the writings, who is a dem or not. So, transperant, if ONLY our muslim president was. lol
  • Adakin ... twiggy 2012/09/28 18:53:14
    Adakin Valorem~PWCM~JLA
    Please Twig... don't overload yourself with too many details and specifics, you will only confuse your fellow libs.
  • Adakin ... twiggy 2012/09/29 18:56:28
    Adakin Valorem~PWCM~JLA
    Twiggy, which "BOY" are you describing? Are you being racist? or are you simply disparaging the youngest and least experianced candidate on the ballot running for POTUS?
  • Lady Wh... twiggy 2012/10/10 13:15:40
    Lady Whitewolf
    +1
    agreed!
  • Brian Haskins 2012/09/27 22:14:09
    Not a fan
    Brian Haskins
    +6
    I am definately not a Ryan fan. I do not support the Ryan Plan. After eight years of Bush economic policy the American economy was in grave economic and financial crisis. Moving on to a Romney/Ryan administration would actually move America back to the same economic policy that created the economic crisis during the Bush administration.
  • Maynard Brian H... 2012/09/28 11:35:11
    Maynard
    +2
    ARTICLE 1, SECTION 8 of the Constitution,

    Proves that YOU failed to understand how America works.


    Congress writes the Budget and the economy was GREAT until Dems took over the House and Senate in 07.



    NICE TRY but you're simply WRONG.


    ANOTHER WRONG LEFTY, at least this guy tried.
  • Carol Maynard 2012/09/28 17:37:07
    Carol
    No you are the one that is completely wrong.
  • Butterfly Carol 2012/09/28 18:18:30
    Butterfly
    +1
    Nope, a democratic party took over in 2007, under Bush, and it went down hill from then. You know nothing, no facts, history, just empty talk.
    Maynard is ,,,,,,,,,RIGHT ON. Research, don't just listen to dem propaganda. You all look foolish, when there are FACTS to see. Good luck.
  • Houston Butterfly 2012/09/30 01:11:46
    Houston
    +1
    Actually no... Presidents propose budgets..... It has been that way for quite some time... So you are wrong on this one......

    The Presidential budget is the request that the President submits to Congress for legal authority to spend federal funds. Fourteen days after the Monday on which Congress convenes each January, the President is required by the Budget and Accounting Act of 1921 to submit to Congress the budget of the U.S. government, along with a message outlining his budget priorities. The budget covers the fiscal, or business, year (from October 1 to September 30) and is named for the calendar year in which it ends
  • Adakin ... Carol 2012/09/28 19:06:13
    Adakin Valorem~PWCM~JLA
    Carol, Please dispute the statements below with citation to support your claim that Maynard is wrong.

    When G.W. left office in Jan 2009, the deficit was $165 billion. Obama's annual deficit has averaged over $1 Trillion (national debt Jan'09: $10.8 Trillion -today <4yrs later $16+Trillion)

    When Nancy Pelosi took control of the House Speaker's gavel in Jan 2007, unemployment was 4.6% By the time Barry Obama was sworn in as POTUS, unemployment was 7.8% and it has NEVER been lower since then.

    When the phased-in Bush tax rate cuts were fully implemented for the top income bracket in 2006, Federal Treasury tax revenue peeked in 2007 at it's highest level in the history of the U.S. Treasury Dept. http://www.taxpolicycenter.or...
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