Higher taxes are “just the beginning” [Reader Post]

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This will surprise few readers of FA:

A group of House Democrats has formed its own “Gang of Six” to push for progressive tax reform — in which the expiration of the Bush-era tax rates for the wealthiest Americans is “just the beginning.”

This is the platform of a group of “progressives” in Congress.

“In response to the call for progressives to draw a red line in the fiscal cliff sand, here is our big picture stance on corporate and individual tax reform,” Rep. Michael Honda (D-Calif.) said in a statement. “Six progressive tax principles from a new Gang of Six. The expiration of the Bush tax cuts for the wealthiest Americans is just the beginning of the discussion.”

The progressive group also includes Reps. Jan Schakowsky (D-Ill.), Keith Ellison (D-Minn.), John Conyers (D-Mich.), Raúl Grijalva (D-Ariz.), and Barbara Lee (D-Calif).

All members of the Progressive Caucus.

They have six demands:

The group outlined six tenets of a progressive tax policy. They say it must be revenue positive, promote responsible corporate behavior, be a “global system,” have “fair rates” for the wealthiest taxpayers, reexamine expenditures that benefit the wealthy, and protect the poor and elderly.

There’s that word again- “fairness.”

Progressives want to do away with the capital gains tax:

“To maintain or strengthen progressivity, we should end one of the leading contributors to after-tax income inequality in this country, the special tax breaks for investment income,” the group said in its statement, released Thursday. “Workers who get their salaries from wages often pay a higher effective tax rate than wealthy individuals like Mitt Romney and Warren Buffett who make most of their income from selling stocks and bonds or from dividends.”

But even Matt Yglesias thinks capital gains tax rates are a good thing:

And the thinking is that world number one where people with valuable skills take a large share of their labor income and transform it into capital goods is ultimately a richer world than the world in which such people just go out to a lot of fancy dinners.

That’s the theory, at any rate. It’s a pretty solid theory, it’s in most of the textbooks I’ve seen, and it shapes public policy in basically every country I’m familiar with. Even researchers like Thomas Piketty and Emmanuel Saez (see “A Theory of Optimal Capital Taxation”) who dissent from the standard no taxation of investment income position think capital income should be taxed more lightly than labor income.

Speaking of progressive, the Communist party of the US claims to be “progressive”:

The Communist Party has an unparalleled history in the progressive movement of the United States

Just so we’re clear.

For more explanation of how parallel progressives and Communists are, go here.

But back to that “fairness” thing.

Barack Obama wants taxes increased on the “rich” but not for the purpose of revenue. As previously noted, those taxes will net only $80 billion per year thrown at a $1250 billion deficit. Obama wants to be seen as “punishing” the well off in the guise of “fairness.” “Fairness” appeals greatly to those who lack the ambition gene.

Obama has a history of seeking “fairness.”

When asked why he would raise the capital gains tax rates even though it would not increase revenue, Obama replied:

“I would look at raising the capital gains tax for purposes of fairness.”

Here’s the video

Lenin was also big on fairness. Obama clearly is a progressive, but if it is not Communism it’s certainly a waypoint on the road to Communism.

Now it’s reported that “centrist” Republicans are split on voting for “middle class” tax cuts.

A number of more centrist Republicans, however, have signaled they are open to the idea of extending tax rates only for the middle class.

The thinking behind the strategy is that Republicans will find themselves boxed in at year’s end if negotiations to avert the “fiscal cliff” have stalled and Democrats are pressuring the GOP to pass legislation to protect 98 percent of taxpayers from a marginal rate hike.

“I don’t want to be in a position, at the end of the month, where because of inaction, or I should say because of a breakdown in negotiations, the only thing the Senate is able to do is to send over what they send over, which will be extending the tax rates for everybody by whatever percent,” Rep. Charlie Dent (R-Pa.) said in an interview.

This is the same Neville Chamberlain approach that worked so well for George HW Bush. (Search “read my lips.”)

Now is the time for the GOP to put its foot down and just say no until there are sufficient and legitimate spending cuts.

After all, as Nancy Pelosi would say- dissent is the highest form of patriotism.

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.

37 Responses to “Higher taxes are “just the beginning” [Reader Post]”

  1. 1

    Wm T Sherman

    What is numbingly common in academia seems more startling and disconcerting in an American president. We’ve seen some hints of the Obama fairness doctrine in the past. During a 2008 debate, ABC News anchor Charlie Gibson asked the candidate if he would raise the capital gains tax on the wealthy, even if this policy resulted in lower revenue for the government. Obama answered: “I would look at raising the capital gains tax for purposes of fairness.”


    Income above acceptable level will be punished. Unless of course, you are “connected.”

  2. 2

    old guy

    If the House Republicans were worried about the country and not their reelection, I think they might grow a set. Unless I am wrong the House still holds the purse strings. I am hoping they might also just defund Obamacare.

  3. 3


    And of course the elitist GOP want to be just like the “Gang of Six”. This is why I am totally disgusted with the fact the GOP in Congress have no spine, and will most likely give Obama what he wants.

  4. 4

    Wm T Sherman

    Boehner and the GOP leadership just purged fiscal conservatives from key House committees: Budget and Financial Services. Laying the groundwork for caving in to the Left. The RINO paradigm: talk big, create some drama, delay the Statist agenda a week or two and then surrender. Announce victory because in return for giving everything away without a fight, they got complimentary pine-scented air fresheners for their government limousines.

  5. 6


    On top of the tax increases most of us will see next year, I recently got a notice from my health care insurance provider informing me that the cost of my current plan was going to cost me slightly over $1,100.00 more next year. When I called them to ask why, I was told that there was no longer a co-pay for pap smears or birth control pills/devices.

    Perhaps I should contact Sandra Fluke and tell her that I am not only paying for her birth control pills ($9.00 per month at CVS, Walgreens and Target) , but for 9 of her friends.

    At it stand now, Obama, and his Socialist plans, are going to cost me roughly $5,000 next year. Now, where was that list of nations with no income tax?

  6. 7

    oil guy from Aberta

    I’m not going to pay for another socialist mess like we once had in Canada. Harper has down sized socialism to a point where its at least manageable. There are more plans to down size.

    Our national debt is close to 600 billion and will be further reduced if there are no more stimulous pipe dreams. My tax rate in Alberta is 16%. Great place to invest!!!

  7. 8

    Nan G

    DrJohn wrote:

    Lenin was also big on fairness. Obama clearly is a progressive, but if it is not Communism it’s certainly a waypoint on the road to Communism.

    Lenin was big on fairness even if it meant murdering or allowing millions to die.
    Lenin allowed 20 million to starve just to institute his ”fair” farming policy.
    Lenin purged at minimum 1,500,000 people just for disagreeing with him.
    Millions were killed when he destroyed so many of the country’s religious edifices.
    Marx was the father of Marxist communism.
    He was more patient than either Lenin OR Obama!
    Marx felt that, in time, people would come to communism all of their own.
    Impatient Obama is to the LEFT of Marx.

  8. 9

    James Raider

    @debraraes: #3,

    This is why I am totally disgusted with the fact the GOP in Congress have no spine, and will most likely give Obama what he wants.

    . . . the video linked in this article, “Truth On Fiscal Cliff Negotiations” provides you ample evidence that the fix is in, . . . providing solid grounds for the validity of your worst fears. The Republicans are unfortunately NOT planning on holding any line worth a nickel. Spending will not be cut. It’s a mess.

    Your disgust is justified.

  9. 10

    James Raider

    @oil guy from Aberta: #7,

    You’re probably living in one of the best places for business on the continent. Alberta is somewhat of an anomaly in what has become a statist, socialist, liberal country, and Harper is doing his best for the most part to govern with only 39% of the popular vote. It’s worrisome that the majority (61% and rising ) are socialist – particularly BC, Ontario and Quebec who are completely lost to unions and socialism – they can’t grow government fast enough.

    One of the mistakes which Harper is making, as much as I like him and wish him well, has to do with not bringing under control, the out-of-control and fraudulent immigration industry. Canada has the world’s highest per capita level of incoming individuals, overwhelmingly from Asia, and too many are relying on the healthcare and welfare system which is now overburdening the taxpayers. That is why the system is cracking. It’s a very different situation which the U.S. finds itself in, however.

  10. 11


    James Raider
    yes, they should start to be choosy on IMMIGRATION,
    he is looking also at the many fraud in that system, I was reading they expatriate thousands who where here fraudulently, THAT IS A GOOD MOVE , LATE TO COME BUT IT’S A START.


  11. 13


    oil guy from Alberta
    the SENATORS came on GRETA SHOW, all very angry at OBAMA’S BEHAVIOR,
    Santorium was a guest and said that he think OBAMA want the cliff, because he refuse all from the REPUBLICANS, because he want the tax for everyone even the small business,
    he is playing the REPUBLICANS, who have been trying all kinds of ways,and one more thing too OBAMA WANT A UNLIMITED CREDIT CARD FOR HIM,
    he doesn’t want to ask the CONGRESS anything anymore,
    I saw a link to take him out, let’s see if they have the nerve to do it.
    NORQUIST said that OBAMA declare himself king.

  12. 14


    I’m looking at the old movie ; THE STING with ROBERT REDFORD,
    MAYBE OBAMA want to do the same CHICAGO STYLE.
    it look like it, just by the way he is acting,

  13. 15


    There is no “fairness” involved in any of it.

    The definition of ‘fair’ that most closely connects with the connotation it’s used by Democrats, when discussing taxation, is this one;

    6 a : marked by impartiality and honesty : free from self-interest, prejudice, or favoritism
    b (1) : conforming with the established rules : allowed (2) : consonant with merit or importance : due

    The Democrats, or liberal/progressives, in using the word are applying it with an arbitrary value attached to it. In doing so, they automatically inject self-interest, prejudice, and favoritism into the equation.

    But what, exactly, is fair? It’s hard to say when you are combining apples, oranges, grapes, cherries, blueberries,…………you get the picture. How can you compare two individuals’ work and compensation, and subsequent taxation, when one of them is, say, a much in demand lawyer, and the other person a retail employee? Or a doctor compared to a truck driver? Or a nuclear engineer compared to a social worker?

    But the liberal/progressives don’t compare people’s jobs to one another, do they? Instead, they compare only one aspect, that of peoples’ wages. But the only concern that addresses is the result of peoples’ industry, not the work required to produce that industry, or the learning required to accomplish it, or the ingenuity required to obtain the various levels of industry. It’s almost as if they want the CEOs and stockboys to make the same wage, and if they don’t, then the liberal/progressives will step in and do all they can to make the end resultant wages, equal. Or………..fair. Again, in order to achieve what they call fair, they inject prejudice and favoritism into the equation.

    Look at it this way: If you walked into a bar and saw three people sitting together discussing their various tax rates from the previous year, not knowing anything about any of them, and one said his rate was 15%, another said his was 25%, and the third said his was 35%, would you immediately think the rates were “fair”? Probably not. At least not until you knew their particular jobs and could guess at their income levels. Right? But that doesn’t follow the definition of fair, does it?

    Or maybe look at it this way: Three people are employed making widgets. The first only works 30 hours a week, and produces 2 widgets an hour. The second works a full 40 hours a week and produces 5 widgets an hour. The third works whatever overtime the company requests of him, something like 40+20 hours, and makes 10 widgets an hour. As such, the payrates are $15/hr for the first guy, $20/hr for the second guy, and $30/hour for the third. The first guy makes around $23,500 for the year. The second guy makes around $42,000 per year. And the third guy makes around $109,000 per year. All three have a wife, two kids, and a modest house.

    Given the above, is it “fair” that the third guy will pay almost double the tax rate of the first guy, who likely earns a low enough amount to qualify for the various “credits” as well, often gaining back more than they paid in? Why should this be the case? Because some liberal/progressive arbitrarily sets a “standard” for what “fair” is considered?

    Now expand that out to the entire, general population. And no, I’m not saying that all highly paid people are hard working, highly educated, highly motivated, or any combination of those and more. Or that all low paid workers are lazy and do the bare minimum. That’s not the point of the above example.

    What is the point is that under our tax system, when looking at tax rates only, it is extremely unfair that some people pay higher rates than others, simply because they happen to make more money. I understand the desire to compensate those making low wages that barely allow for subsistence, though. I do. But that is no reason, none at all, to apply harsher standards to those that do make more money. You cannot justify it with any reasonable argument.

    And they don’t. The ‘they’ being liberal/progressives. That is why they use the catch-word of “fairness”, or what they deem as an equivalent, in “equality”.

    I remind everyone, again, and again, and again, that our Declaration and Constitution does not call for equality of result, but only for the equality of opportunity. Any deviation from that goes against the principles we were founded upon.

  14. 17


    OK, since the Democrats are always looking for things to be fair, I have a couple of suggestions:

    1. A single flat rate tax for everyone. It is ‘unfair’ to have a progressive tax rate as it penalizes success.

    2. No deductions for anything, be it charities, costs, depletion allowances, environmental programs, etc. None, zip, nada. That way no one gets a break! (This alone should dry up money to groups like Friends of the Earth, Greenpeace, etc.).

    3. End welfare, replace it with workfare. It is ‘unfair’ to expect those who work for a living to support those to lazy to work!

    Let’s turn their arguements back in their face!

    Merry Christmas!

  15. 18


    @Hard Right, #16:

    Maybe conservatives should pay a little attention to details such as Dick Armey’s $8 million payout—assuming that they really want to figure out what happened to the Tea Party movement. I suppose being angry at democrats is a lot easier than taking a close look at what might be wrong in the GOP.

  16. 20


    @ilovebeeswarzone, #19:

    The grass roots Tea Party energy and message were taken over by the GOP, which was also attempting to appeal to the Christian right by adopting what a majority of mainstream voters saw as a rather extreme social agenda. What could have been a very compelling message about the need for fiscal responsibility got distorted and buried under a host of controversial social positions and statements.

    That’s my own understanding of what happened, anyway. Other people might see things differently.

  17. 21

    Hard Right

    So greg, why do you support a party like the dems that wants to hurt “the little guy” just to score political points?
    Stop trying to derail the thread and adress how the dems are willing to raise taxes on the middle class strictly for political gain.

  18. 22


    but I didn’t see any where the words TEA PARTY,
    and I heard there are many false tea party sprouting,
    FROM BEFORE THE ELECTION, to lie to people,
    as many other frauds from the election,

  19. 23


    @Hard Right, #21:

    That’s an interesting question, coming from someone supporting a party that’s apparently willing to see all taxpayers’ rates go up if the rates of those having the highest income can’t be protected.

    I really don’t understand the logic. Everybody pays the same rates on their first taxable $250,000. The republican position would mean that the highest earners would have rate increases on that portion of their taxable earnings also–not just on the amount exceeding that level.

  20. 24


    rendered useless, because not affordable
    which he campaign and said it’s free, that’s a lie,
    and as for the comments of ANN AND ROMNEY, YES YOU KNOW WHERE THEY COME FROM,
    of anyone who has a few dollars save for the rainy days coming with OBAMA.
    do they know that they won’t get a penny from him, and he want a credit card unlimited
    the big spender is anxious to spend, the money of the PEOPLE, but not his own,
    and come out from the ditch of OBAMA,

  21. 25



    But Greggie, I thought you progressives were all about “fairness.” If that is the case, and the tax rate is going to be raised on the wealthy (determined by Obama anyone who earns $200K+/yr) then why is it not fair to increase the tax rates on everyone, and while at it, abolish the EITC so that everyone pays something and doesn’t use April 15th as a pay day because they get back more than they paid in?

    Do those who pay no federal income taxes at all not use the same roads, the same federal agencies, expect security from the same military, CIA and FBI as the wealthy who earn $200+K a year? So why should some get away scott free and not have to pay any federal income taxes while others, who are more productive, pay more?

  22. 26


    @retire05, #25:

    Where is the unfairness? Everyone would pay the same rates on taxable earnings that fall into the same brackets. People having taxable earnings of $350,000 would get the same tax rate as everyone else does up to the $250,000 point.

    If republicans scuttle any tax legislation for the middle class, the highest earners will see their rates go up on the first $250,000 as well as on anything over $250,000.

    Those who pay no federal income taxes are in that situation because their income is so low. People talk about their status as if it were some sort of special privilege. Having so little income that you aren’t even liable for federal income taxes is hardly a desirable position to be in. And you’re still subject to the inescapable taxes: sales tax, gasoline tax, property tax, automobile excise tax, etc.

  23. 27

    Hard Right


    Greg ducks the question again. The GOP wants spending cuts to try and stave off the economic crash that will occur otherwise. The GOP wants to keep tax cuts for everyone, and are willing to increase revenue thru loophole and deduction elimination.
    obama/dems do not. They want to punish the middle class so they can play hero later. They are the ones who WANT us to go over the cliff entirely for political gain. Please explain how they are looking out for the little guy and why you support them.

  24. 28



    Greggie, “fairness” is equal taxation, which a progressive tax rate is not. So although you do the things that increases your earning power, you know, like not having a bunch of kids out of wedlock, not doing drugs or alcohol to excess, finishing school, when your earnings reach a certain level, progressives want to punish that money you make over and above the lowest tax bracket. And you call that fair?

    And you excuse those who do not pay any income tax based on the fact that their income is so low. Why is their income low, Greggie? What makes them not worth a solid middle class wage? Could it have to do with that word you progressives seem to love “choice?”

    Poverty is not a condition we are born with, it is a condition we are born into. It does not have to be a permanent condition, and only remains so because of personal choices. But it takes something you progressives don’t encourage, personal responsibility, to climb your way out of povery. Instead, you support enabling bad choices and punishing those who have done with it takes to make a good living, in spite of being born into poverty.

    And pleeeeeeze, don’t throw in the carnard about gas taxes, yada, yada, which is the only federal tax on that list.

  25. 30

    Nan G

    Could the money (tax revenues) come in withOUT raising tax RATES on the rich?
    Of course!
    Is Obama ”for” doing that?
    Not NOW, but he WAS OK with that before he glommed onto his ”class warfare” campaign tack.
    Here’s what Obama said in a July 22, 2011, White House news conference:

    “What we said was, give us $1.2 trillion in additional revenues, which could be accomplished without hiking taxes — tax rates — but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax-reform process that could have lowered rates generally while broadening the base.”

    Yet NOW this is what Obama says:

    “It’s [that his $1.6 trillion plan to avoid the fiscal cliff of tax increases and deep spending cuts must include higher tax rates for the top 2 percent of the income scale]
    not me being stubborn. It’s not me being partisan. It’s just a matter of math.”

  26. 31



    Greg, on your #20, that is exactly what happened, but only to the bigger and more heavily noticed of the multitude of TEA Party groups. The local one, for me, has not become engaged in social issues, except where they have become financial problems, or will become one. Obamacare is one of these that come to mind.

    And yes, if not for the move by the Establishment GOP to co-opt the movement to their own devices, the TEA Party movement could have become a major force for overhaul of the federal government’s financial mismanagement.

  27. 32


    I am reading a clip from the PAPER,
    about the dual citizens, in CANADA, and other COUNTRY, naming THE UK also. and other around the world
    that the IRS might demand the BANKS to demand more information to their clients
    which the president of the banks is not happy about, there is a talk between the GOVERNMENT of CANADA
    about it,
    so far the dual CITIZENS won’t be penalize for the previous late tax owing to USA,
    but now they say they sent all the dual CITIZENS a warning letter to them to file their USA tax,
    even if they paid it in CANADA, or get a heavy fine of 30/cent,
    CANADA WON’T collect those money for the IRS, and will limit the information
    on his dual PEOPLE,
    so there is a conflict there between CANADA wanting to protect the privacy of them
    and the IRS called the FATCA [ US LAW], but it seem to lead to a positive outcome they say
    if the BANKS are force to ask more info from the citizens, they have no choice but comply,
    but they will prefer to give the info to CANADA INCOME TAX AGENCY, so the FATCA could get their info from the CANADA tax agency not the BANK,
    This is being negotiated now.
    the title of this clip was :
    US-CANADA TAX TALKS raise concerns

  28. 36


    Glenn M. Cassel AMH1[AW] USN RET
    I see you are in one of those mindset,
    not fair this life, but some memories surge in to shake the feeling
    and it make you smile again, it could be a dream forgotten,
    replace by an order to achieve and concentrate on tasks more difficult than a man can do,
    in times of urgency, because your crew depend on you,
    there was no time to taste that old beautiful dream
    and then things change in the busy life, to bring you back
    and you don’t recognize your own AMERICA, and there you go on being sad.
    but your tomorrows you don’t know yet, they possibly will bring you that lost smile,
    I was just wishing you the best for those tomorrows at your door closer than you think.


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