Blood lust [Reader Post]

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An article in the Wall St. Journal paints a gloomy picture for the future

U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.

Half of the nation's 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.

Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.

At the same time, exports are slowing or falling to such critical markets as China and the euro zone as the global economy downshifts, creating another drag on firms' expansion plans.

Uncertainty

Corporate executives say they are slowing or delaying big projects to protect profits amid easing demand and rising uncertainty. Uncertainty around the U.S. elections and federal budget policies also appear among the factors driving the investment pullback since midyear. It is unclear whether Washington will avert the so-called fiscal cliff, tax increases and spending cuts scheduled to begin Jan. 2.

Nancy Pelosi has stated there will no agreement on the fiscal cliff unless there is a tax increase on the so-called rich.

House Democratic leader Nancy Pelosi says she's hopeful lawmakers can come to a deal to avoid a year-end “fiscal cliff” but any agreement has to include tax rate increases for the wealthy.

She tells ABC's “This Week” that she can't accept a deal that caps deductions and closes some loopholes but does not alter current tax rates for the wealthy.

The California Democrat says “just to close loopholes is far too little money” and other ideas have to be considered. Republicans have suggested they are open House Democratic leader Nancy Pelosi says she's hopeful lawmakers can come to a deal to avoid a year-end “fiscal cliff” but any agreement has to include tax rate increases for the wealthy.

She tells ABC's “This Week” that she can't accept a deal that caps deductions and closes some loopholes but does not alter current tax rates for the wealthy.

The California Democrat says “just to close loopholes is fa

r too little money” and other ideas have to be considered. Republicans have suggested they are open to finding more revenues.

As we've noted previously, increasing taxes on the “wealthy” would net only about $70 billion per year against a deficit of $1.25 trillion.

Additionally, it is estimated that increasing the taxes on the “wealthy” would have a serious and negative effect on the economy:

• Unemployment would rise 0.5 percent, which translates to 710,000 fewer jobs…

• Real after-tax wages would fall by 1.8 percent…

• GDP would fall by 1.3 percent…

• Capital stock and investment would drop by 1.4 percent and 2.4 percent, respectively

Investors are already taking action in anticipation of tax increases.

Business owners and investors are rapidly maneuvering to shield themselves from the prospect of higher taxes next year, a strategy that is sending ripples across Wall Street and broad areas of the economy.

Take Steve Wynn, the casino magnate, who has been a vocal critic of higher tax rates. He and his fellow shareholders in Wynn Resorts, the company announced, will collect a special dividend of $750 million on Tuesday, a payout timed to take advantage of current rates. Experts estimated that taking the payout this year instead of next could save Mr. Wynn, who owns a sizable stake in the company, more than $20 million.

For the wealthy like Mr. Wynn, the overriding goal is to record as much of their future income this year as they can. This includes moves as diverse as sales of businesses, one-time dividends and the sale of stocks that have been big winners.

But the democrat position is not really about revenues. It's about the perception of “fairness.” It's about blood lust. If the economy cannot be repaired, the left wing portion of the population will be satiated when those better off than they suffer more pain, regardless of the effect on the economy. Barack Obama has never done a single thing to create wealth other than his own. He has spent his entire life learning and teaching others how to take wealth from others through envy, hate and division. As Doug Ross pointed out, Obama has assumed the role of deciding who needs what and will take from you anything he feels you don't “need.”

…what I'm not going to do is extend further a tax cut for those who don't need it.”

The only question is, what won't we need next?

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DrJohn has been a health care professional for more than 30 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 30 years and has three kids- two sons, both of whom are attorneys and one daughter on her way into the field of education. DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed. Except for liberals being foolish.

24 Responses to “Blood lust [Reader Post]”

  1. 2

    ilovebeeswarzone

    ho much NANCY PELOSI CAN COME UP WITH OUT FRONT?
    if they want to tax those who don’t need it,
    take from the DEMOCRATS FIRST AND MAKE AN EXAMPLE,
    YOU ELECTED DEMOCRATS YOU HAVE A GOOD PAYING JOB PAID BY THE PEOPLE, LETS TAKE YOUR ASSETS STACK IN YOUR SOCKS,
    YOU WILL SURVIVE WITH YOUR PAY ALONE,
    and let’s see how much that amount to

  2. 6

    johngalt

    @Common Sense:

    Lib1 has recently had a common theme to his postings. That is, they all contain an accusation pointed at the right that actually detail the left’s actions and words more correctly than anything else.

    Take the statement he/she/it made this time.
    “-conservatives are pessimists because they may not get their way 100% of the time”

    And yet, they are the ones who display ads showing an evil Republican pushing granny off the cliff if the Democrats don’t get their way on tax and spend issues. They are the ones who put Biden out there telling black Americans that the GOP will “put them back in chains” if Romney was to win the presidency. They are the ones telling women that they will become nothing more than sex slaves to men, if the GOP has their way.

  3. 8

    Greg

    Nancy Pelosi has stated there will no agreement on the fiscal cliff unless there is a tax increase on the so-called rich.

    A Pew Research Center poll conducted this past July indicates that the American public favors raising taxes on incomes over $250,000 by a factor of two-to-one. This result is in line with a number of other polls taken on the same topic. It would also seem to be in line with the results of a recent presidential election.

    High end tax rates are presently at historic lows and have been for the past decade. They were at a low during 2008, when the recession set in.

    Corporate profits have been at record highs through most of Obama’s first term. Corporations have not been hiring or investing in new production or retail facilities as a result. In fact, the point has been repeatedly made that their profits have increased because of cut backs in such spending. I fail to see why that should make the public feel kindly disposed to maintaining historically low tax levels. I’ve never really understood why investment income should be taxed at a lower rate than wages in the first place. Hey, it encourages laziness. Why should people engage in productive activity when they can play a game that allows them to live off of other people’s work? (That was sarcasm, in case anyone missed it.)

    As we’ve noted previously, increasing taxes on the “wealthy” would net only about $70 billion per year against a deficit of $1.25 trillion.

    That’s significantly more than a wide variety of the program spending cuts republicans have forwarded as solutions to the deficit. Apparently whether or not a piddling sum like $70 billion actually does matter depends entirely upon who will be having to give something up.

    The main reason for raising high end taxes, however, has to do with the simple matter of fairness. If we are to undertake a serious program of deficit reduction—which most sane people understand to be essential if we with to save our system from total collapse—everyone should have to make some sacrifice. That includes those who have benefited from that system the most.

  4. 9

    johngalt

    @Greg:

    It would also seem to be in line with the results of a recent presidential election.

    Yes, Greg, it does. However, I cannot, for the life of me, figure out how anyone could be hoodwinked by Obama and the Democrats into believing that $70 Billion equals, or even comes close to, $1.2+ TRILLION. It seems to me that Obama ran on a platform promising to take away from those “who can afford it” and give away freebies to those who don’t have it.

    High end tax rates are presently at historic lows and have been for the past decade. They were at a low during 2008, when the recession set in.

    And what are you saying here, Greg? There is no correlation between the low tax rates and the recession, even though liberal/progressives love to relate the two. There really is no correlation between low tax rates and the massive deficits the federal government has incurred since Obama was first elected, especially as it was Obama and the Dems who have instituted such massive spending increases the past 5 years(including the two Dem Congress years with Bush still in office). You are implying a link when there isn’t one of tangible value to actually see, Greg.

    In fact, the point has been repeatedly made that their profits have increased because of cut backs in such spending.

    You do understand that by business cutting back on capital expenditures and hiring, that it frees up more money per year that can be counted as “profit”, don’t you? It is entirely expected that a company’s reported profit will increase, for the short term at least, when they cut down on the expenditures they otherwise might have made. For example, if I have a lemonade stand, and I’m selling cups of lemonade at $.25 per, selling 100 per day for 200 hundred days, my gross income will be $5000 for the year. Subtract the cost of the materials, I’ll call it $.15 per cup, along with advertising by postings 20 signs within an eight block radius costing $1.00 per sign, and my net profits for the year are $1,980. Now, the next year, I charge the same amount, the materials cost the same, but I forego the advertising (a capital expenditure). If I sell the same amount as the previous year, my profits go up by $20, to $2,000, a “record” profit for me. All by deleting an expenditure I made previously. Of course, this only works in the short term, as the advertising is designed to bring in the customers, and eventually the lack of advertising will reduce the number of customers I would see per day. Simple, but entirely demonstrative of why some businesses have “record” profits while sitting on their capital right now. And this doesn’t even begin to address all of the reasons why “record” profits are seen by some companies.

    I’ve never really understood why investment income should be taxed at a lower rate than wages in the first place.

    Let’s see if I can explain it to you, Greg.

    Companies looking to start, expand, or even simply maintain market shares, require capital in order to do so. Much of this capital comes from investment into companies, from various sources, including people’s 401k’s, various kinds of funds available in the market, venture capitalists, buying straight up shares of stock in a company, etc. People invest their money these ways and others and expect a return on their investment. These returns come in various forms, including the increase in value of stocks, stock dividends, simple part ownership in a company, or companies, and the share of profits the company garners, etc.

    It is precisely because of the expected returns on investment, that people invest in the first place.

    Now, let’s say that you decide to up the capital gains tax rate to 25%. You have now imposed a 10% increase on the taxes a person is expected to pay on the capital gains they make selling their stock. If a person made $1 million as a gain by selling a block of their stock portfolio, currently they would pay $150k in taxes. Increasing that tax rate to 25% means $250k in taxes. a $100k difference. Now, let’s say that person is looking at the prospective gains from their investment, and decides that the return on their investment is too small compared to the risk in making that investment. They decide to forego it. What about if their investment in the company would have made all the difference in the success that company had? What if their investment meant the difference, to the company, between employing only 100 people, and opening up a new facility doubling their employment, and increasing the company’s market share, and related profit increase? By jumping up that capital gains tax rate, you just killed what could have been an even greater increase in revenue garnered by the various government entities, simply because you looked only at a short-term gain in that revenue, vice the long-term prospects of 100 more taxpayers, each paying SS and income taxes, as well as the added tax revenue from a growing company. That $100k “gain” in revenue will seem like peanuts in comparison to what the long term could have held.

    Holding the capital gains tax rate low in comparison to actual income tax rates stimulates investment, not only by people like Warren Buffet, but also people like you and me, who invest in various small ways throughout our lives, including 401k’s and small stock purchases, by increasing the net gains we might see on our investments when it comes time to pay the tax man. If those gains are seen as too low for the risk we might incur, because the taxes due to the government are too high, then we might not choose to make those investments, and many companies end up without the funding they need to create jobs, grow business, or even remain profitable.

    Your argument for increasing the capital gains tax rate shouldn’t be anything related to “fairness”, but rather, that by setting that rate too low it results in a shift in compensation for some people from actual income over to investments. This is why Warren Buffet pays a lower effective tax rate than his secretary. Because he set his actual income low and chose instead to compensate for the difference in shares of his own company. So, yes, it can have some negative consequences, but these consequences may not be all that negative anyways, since the benefits of the added investments his company makes may outweigh the loss in income tax revenue the government might otherwise have gotten.

    I’d suggest that the capital gains tax rate must be kept comparatively low to the income tax rates to continue the incentive for investment, but not so low as to make the Buffet case the norm around the country. In my opinion, the 15% rate that is currently set is good, at least for where the income tax rates are set.

    Also, as an addition, if the high income earner’s tax rates are upped, and capital gains tax rates kept where they are, it will increase the disparity between them, making the Buffet case the norm, which is not what you want to do.

    And considering the small stated gain in revenue by reverting those upper income tax rates back to Clinton era rates, it just isn’t worth it, in the long run, to do so.

    It’s always been about the spending, Greg. Always. If and when the Congress-critters decide to actually get serious about the federal budget, spending cuts are what is going to be required. I’d rather have some pain now, from those cuts, rather than continue as we have been to the point that the cuts required hurt a whole lot worse. Address the deficits through cuts now, do what is necessary to get the economy back on track, and then start discussing any changes to the current tax rates. Otherwise, Greece, here we come!

  5. 11

    Greg

    From Hauser’s article:

    Higher taxes discourage the “animal spirits” of entrepreneurship. When tax rates are raised, taxpayers are encouraged to shift, hide and underreport income.

    Evidence strongly suggests these same “animal spirits” encourage the highest income segment of the population to “shift, hide and underreport” income even when rates are far lower, as they have been for the past decade. It would also seem that republican politicians have given their tacit approval to this sort of behavior, if their repeated efforts to reduce the IRS’s enforcement budget are any indication. This seems a bit odd, assuming republicans actually care about deficits: Every enforcement dollar spent by the IRS results in a 10-fold return in increased revenue, and there’s plenty of revenue escaping. It’s been estimated that in 2006—one of our years of historically low tax rates—$385 billion legally due federal taxes went unpaid. That’s not chicken feed. Add to it the $70 billion that could be gained by returning taxable earnings exceeding $250,000 to the Clinton era rates, and you’re approaching half-a-trillion per year. Why should we think entrepreneurs will suddenly lose all interest in making more money if they don’t get to keep quite so much of their additional earnings? It never slowed anyone down in the past. The nation has experienced rapid economic expansion during periods when taxes were far higher than now.

    The second part of any balanced solution has to be significant spending cuts. The necessary personal sacrifices will be a lot more palatable to the vast majority of American if they don’t see the highest earners in the nation getting preferential treatment. If preferential treatment is apparent, those necessary cuts won’t be politically possible.

    People have to accept this reality. If they don’t, nothing will get done, and there’s no longer time to put a real solution off.

  6. 12

    ilovebeeswarzone

    GREG
    stick to MR HAUSER OPINION AND READ MORE LINES,THERE IS MORE THAN THAT
    AND DON’T DRAG THE WHOLE REPUBLICAN IN THE LINK.
    I thought he made a very realistic exposy,
    of course it doesn’t fit your mindset,
    you don’t understand the whole page and you only focus on one line,which is connected to the rest
    you know the head is connected to the neck,
    the neck is connected to the thorax, the thorax is connected to the so on, so on,

  7. 13

    Larry1356

    Obama hasn’t even been sworn in for a second term yet. Can you imagine how bad things are going to get before his next four years are up?

  8. 14

    Kalashnikat

    @Greg:

    You’re trying to redefine reality to suit your purposes…The less money there is to invest in buildings, equipment, inventory, materials and supplies for a business, the less growth you are going to see. The more uncertainty you have in costs like taxes and healthcare, the less business are able to plan effectively for investments, and the more they will HAVE to sit on their irreplaceable capital until the picture becomes clearer…you are basically advocating that people throw their investment capital either to the Government in taxes or into investing in anticipation of growth that is entirely unlikely given the policies of the current administration…this is Obama’s new “economic patriotism” meme…entrepreneurs should deplete their capital on absurd taxes and investments that are not justifiable given the view ahead…
    To the extent business goes ahead with this in lockstep with the Government’s wishes, that is the textbook definition of fascism…that is the planned/controlled/directed economy, which has never worked anywhere in the world…

    Five year plans and New Deals…
    Wrapped in Golden chains…
    And I wonder, still I wonder…
    Who’ll stop the rain?

  9. 17

    ilovebeeswarzone

    AT FOX NEWS
    THE DOOMSDAY OF THE MAYAS.
    HEY THE 21 NOVEMBER , THAT IS NOW , TODAY, ANY MINUTE,
    what must I DO TO BEAT THE ODDS?
    oops is the 12month of the 22 days 2012 year,
    my mistake

  10. 18

    Ditto

    One wonders when the Democratic far-left will bring out the guillotines, gallows and firing squads to complete the typical history of mob-mentality based national “transformation”. With their current class warfare agenda it’s only a matter of time before government seizures of property and flash mob looting begins.

  11. 19

    Hard Right

    Folks, you have to understand that to a devoted marxist like greg, businesses/Capitalists are pure evil. They NEVER DO ANYTHING GOOD in his eyes.
    He’s been one of the leaders in accusing companies trying to survive obamacare by cutting back on employee hours, of hurting the “little guy” purely for political gain.
    His bigotry is how people like him justify their hatred, mistreatment, and even violation of rights of those they disagree with.

  12. 20

    ilovebeeswarzone

    Ditto
    that is a scary scenario, is in it,
    if they have the liking on smoking angel stuff,
    you never know what enlightenment can hit their mind.
    bye

  13. 21

    ilovebeeswarzone

    Hard Right
    yes, and they forget their sources who where the founders believing in CAPITALIST,
    and it worked and many made fortune and they provide jobs for the other,
    and that was good
    AS GOD SAID WHEN HE LOOKED AT THE CREATION AFTER HE FINISHED IT,
    and the CAPITALIST ENTICE THE OTHER FOR IDEAS TO BE GOOD FOR THE PEOPLE,
    AND THE CARS WHERE THOUGHT OF AND IT CAME TO REALITY
    THAT GOOD OlD AMERICA WAS ON THE MOVE ON HER OWN, AND THINGS CAME FROM HER OWN MIND,
    NOTHING CHEAP FOR HER, SHE HAD GRAND IDEAS, THE SKY THE LIMIT,
    what happen to stop her, to slow her down, she lost something
    what did she do wrong?
    who did that to AMERICA? she was loved so much,
    we have to go back and trace the time of her downfall from the beginning of it to know how to fix it
    bye

  14. 22

    johngalt

    @Greg:

    The second part of any balanced solution has to be significant spending cuts.

    The second part, Greg? Any way you slice this pie, it always comes up as the government spending too much. Not that the government doesn’t receive enough.

    Sorry, but you are trying to bend reality to fit your idea that taxes, and specifically tax rates on higher income earners, should be addressed prior to any spending cuts. That just doesn’t make any sense considering what the problem really is.

    What do you do at home, Greg? If you are at a point in your life where you are spending more than you are bringing in, to a point that you are adding debt little by little to retain your lifestyle, do you eventually address the spending issue? Or do you first go out and get another job? My guess is that you do as most people do, and address the overspending first, in an effort to address your budget.

    Simplify the issue, Greg, and you will see that it’s the government’s spending that is the problem, not the revenue shortfalls. Which makes your assertion that the spending should be addressed AFTER the revenue problem, completely ridiculous. And that ridiculousness can be exampled by Harry Reid’s implication that some cowboy poet’s should continue to be fed from the federal gravy train while insisting that taking more from the “rich” will be able to pay for it.

  15. 23

    ilovebeeswarzone

    johngalt
    well said as usual,
    I think the OBAMA government cannot stand the fact that we depend on all levels to the COMPANIES not on THE GOVERNMENT take over anyone’s lives, we don’t depend on THE UNIONS DICTATOR,
    we depend only on WALL-STREET market made up of BIG COMPANIES dictating the creation of jobs they support, not OBAMA’S jobs which are for only a few times
    before they close,
    we depend on smaller BUSINESSES who create jobs, as well as the big COMPANIES who depend on small business whatever needs to servicing their diverse needs from businesses
    all are connected to work together as well as their employees, all pay tax, as oppose to GOVERNMENT who don’t pay tax, but take from tax and also spend the tax
    on themselves, and to who send money to their election
    if they take from the rich, they ultimately take from the other also, and including the charity organization which the GOVERNMENT WANT TO KEEP THE FULL CONTROL BECAUSE THEY HAVE THEIR VOTES BY SHOWING HOW KIND AND GENEROUS THEY GIVE, BUT AVOID SAYING THAT IS WITH THE PEOPLE’S MONEY NOT THEIR OWN

  16. 24

    Blake

    Greg, @#8- You and the rest of your liberal socialist ilk seem to want to make the rest of us poorer, simply because you might have had a hard time making it in the real world. Get a grip- you who always prate on about “Darwinian Principles” seem to have convienently forgotten probably the truest part of them; that is, “Survival of the Fittest”- and this applies to mankind and economic survival as well as the rest of nature, which you seem to ignore.
    It is a culling process- all America does is give you the opportunity to succeed- but you have to work at it, not expect someone to subsidize your worthless existance. That’s just wrong.