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Good To Know

History Lesson #8: Taxing the Rich

Summary: No, the goal of the U.S. is not to help the rich get richer. 

 

 

It seems that somehow the GOP has forced Biden to reconsider raising taxes on the rich, or at least reversing Trump's tax cuts, in an effort to pay for infrastructure and everything else Biden wants.

 

But why? Isn't a study of economics in history able to give Biden the guidance he needs? Let's give Biden the tools he needs to raise the taxes on the rich before the U.S. comes crashing down around our feet.  But also, it's the GOP's job to make Biden fail.

 

Here's a report from CBS News: "Poll after poll show that people favor higher taxes to reduce the deficit. That's because, while susceptible to demagoguery, most of us aren't total idiots. The case for balancing the budget in part by raising taxes on top income-earners is compellingly simple. Better yet, it's good economics."

 

Good economics. What does that mean? According to this site the Bush era tax cuts during his war contributed greatly to our deficit. That's not hard to believe. Even if the taxes on the rich were raised, their income gains would still dramatically increase compared to the rest of us. Can Bezos stand to pay more in taxes? There's really very little doubt about that.

 

(I would love to stop supporting Amazon but that's the only place my books are currently available. But I will say that my sales have screeched to a halt the better part of this month, so I'm sure others are boycotting.)

 

And there's this: "Recent income gains for the highest-income one percent have far exceeded gains for everyone else, leading to dramatic income concentration at the top of the scale. Now, more than ever, the highest-income households are in a better position to pay taxes."

 

Don't believe CBS? Let's look at another source.  The PEW Research Center has a pretty good rap. Here's what they say about what we think about raising taxes: "By two-to-one (44% to 22%), the public says that raising taxes on incomes above $250,000 would help the economy rather than hurt it, while 24% say this would not make a difference. Moreover, an identical percentage (44%) says a tax increase on higher incomes would make the tax system more fair, while just 21% say it would make the system less fair."

 

Okay, I get it. More of us are in favor than against, which is proportional to more of us voting Democrat to Republican. What are the Republicans afraid of? That rich people will no longer have the money to help them cheat at elections? Okay, you know I'm biased, right? The Republican Party needs a new image, a new mission statement, in order to align with voters today in a more honest and direct way.

 

Now, granted, that was an old survey, but fair enough because of the references above to GW Bush.

 

Here's one from Marketplace.org in 2018, a little more recent.  "One of the most pernicious economic falsehoods you'll hear during the next seven months of political campaigning is there's a necessary tradeoff between fairness and growth. By this view, if we raise taxes on the wealthy the economy can't grow as fast," noted Robert Reich. He noted that taxes were higher on the rich in the first three decades after World War II than they've been since. He also said Clinton's taxes on the wealthy contributed more to the growth of the economy than did Bush's tax cuts after him.

 

"What we should have learned over the last half century is that growth doesn't trickle down from the top. It percolates upward from working people who are adequately educated, sufficiently rewarded, and who feel they have a fair chance to make it in America."

 

Let's look at an opposing opinion to see how much sense it makes.  "Luckily, there are some people out there who understand why higher taxes are bad for the economy and society. Steven Horowitz of Libertarianism.org is certainly one of them and he does a terrific job of explaining just why the current tax-scheme regime is hurting America. In his recent article, "The Social Harms of Taxing Private Wealth," Horowitz does a great job of defending capitalism and the current private financial system and he explains why the Democrats are so misinformed about wealth and what a wealth tax would mean for not only our nation's billionaires but also every other productive member of society."

 

Oh my goodness. We cannot take a chance on hurting billionaires? Maybe someone who has 5 billion will end up with 4 billion and that will just destroy him? I'm sorry, it's hard to take those people seriously. Please look at their link if you want to read more. I'd rank those comments right up there with QAnon lies about mass shootings being fake.

 

When did trickle down start? How about Coolidge? Coolidge both cut taxes and cut the federal budget. He knew that to cut taxes you had to cut spending. Fair enough. No brainer, really. He served during the roaring Twenties, a time of tremendous economic boom, during which a middle class was created. The war was over -- it was time to dance. The tax was reduced on the wealthiest from 77% to 7% he was the one to start Reagan's "trickle down" economics by lowering taxes on businessmen.

 

Economic historian Steve Fraser felt that the Coolidge administration perfected "crony capitalism," where you could no longer tell the difference "between the representation of a political constituency and the servicing of a corporation client."

 

This was a happiness bubble that grew too big and finally burst. But not under Coolidge. He didn't like to see what was happening to the stock market but he felt it wrong for the government to interfere. He chose not to run again, Shlaes said, because he'd had enough.

 

So that particular trickle down, if left uncorrected under Hoover, led to the crash of 1929. From what I could find, Hoover further cut taxes, believing in hands-off capitalism. He too believed people would benefit if the rich business owners had more money.  So low taxes on the rich directly led to the depression, it seems.

 

Most of us remember Ron Reagan as being the one who created trickle-down. It didn't start with him, but obviously he didn't know his history. Reagan called his program of cutting taxes to produce more jobs and reducing regulations to get the federal government out of business interests as "The New Federalism."

 

Reagan's package offered no relief when the country went into a devastating recession. High interest rates put the stopper on everything from home mortgages to factory prosperity. They finally realized they had to drop oil prices and Reagan also cut domestic programs. The federal deficit, however, continued to grow, because Reagan funneled domestic savings into the defense budget, while the taxes for the wealthy were cut dramatically to create that 'trickle-down' that would produce jobs.

 

Did you notice that today even your CDs get very little interest? I wonder why that is. Yes, no economic growth thanks to the pandemic. But maybe taxing the rich would help.

 

In 1981 there was a serious recession, with unemployment as high as 11%. Growth from tax cuts failed to materialize; he thought slashing income tax up to 25% would encourage people to reinvest in the economy. "Debt interest payments became the government's third largest bill after defense problems and entitlements such as public assistance." As Reagan assured the people to stick with him, Congress enacted a $100 billion tax increase. By 1983 the country again experienced a period of growth.

 

Hey, I'm not making this stuff up. Some of the above, by the way, you can find in "From Lincoln to Trump."

 

Here's a summary found online.

 

"As projections for the deficit worsened, it became clear that the 1981 tax cut was too big. So with Reagan's signature, Congress undid a good chunk of the 1981 tax cut by raising taxes a lot in 1982, 1983, 1984 and 1987. George H.W. Bush signed another tax increase in 1990 and Bill Clinton did the same in 1993. One lesson from that history: When tax cuts are really too big to be sustainable, they're often followed by tax increases."

 

So now it's time for that tax increase, Mr. Biden. Congress must act.

 

"The other argument that advocates of tax cuts for the rich make is that many small-business owners would be see their taxes go up and thus would be discouraged from hiring workers. The facts do not support this. "Only 3 percent of small-business owners are in the top bracket," notes Roberton Williams, a senior fellow with the Tax Policy Center, which is sponsored by the Brookings Institution and the Urban Institute. And, he adds, "They are not all what we think of as job-creating small businesses. A lot of them are hedge-fund managers and law-firm partners." So other than perhaps a few restaurateurs on Manhattan's Upper East Side, the workforce is unlikely to be affected."

 

This was another article about the Bush tax cuts expiring.  Jeepers, I sure hope they did because if not, we have Trump tax cuts on top of them. No wonder rich men can afford to build spaceships.

 

Oh wait …

 

The Bush tax cuts were two tax code changes that President George W. Bush authorized during his first term. Congress enacted tax cuts to families in 2001 and investors in 2003. They were supposed to expire at the end of 2010. Instead, Congress extended them for two more years, and many of the tax provisions remain in effect—and continue to affect the economy—to this day.

 

Son of a gun.

 

 

SOURCES:

 

From Lincoln to Trump: A political transformation

 https://www.cbsnews.com/news/why-raising-taxes-on-the-rich-is-good-economics/ 

 https://www.pewresearch.org/politics/2012/07/16/raising-taxes-on-rich-seen-as-good-for-economy-fairness/ 

 https://www.marketplace.org/2012/04/18/taxing-rich-good-economy/ 

 https://genzconservative.com/why-higher-taxes-are-bad-for-the-economy/ 

 https://www.thebalance.com/president-hoovers-economic-policies-4583019 

 https://www.brookings.edu/blog/up-front/2017/12/08/what-we-learned-from-reagans-tax-cuts/ 

 https://www.newsweek.com/would-raising-taxes-rich-hurt-economy-74041. 

 https://www.thebalance.com/president-george-bush-tax-cuts-3306331 

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New Gun Safety Laws

We should be required to submit a resume and character references in order to own a gun. Why not?  Why shouldn't we have to apply to own something that can potentially take an innocent life?

 

First, I'm not talking about taking anyone's guns away – unless they're illegal.  I am talking about making guns that are rapid fire illegal, and then yes, everyone who owns one would be required to turn it in for some kind of monetary "reward." Here's a stat shared by a South Carolina congressional candidate: When Clinton banned assault rifles in 1994, mass shooting deaths dropped by 43%. After the ban expired in 2004, they shot up by 239%. With statistics like this, how can anyone argue against a ban? This time, make it a ban that does not expire. Forbid even the manufacture.

 

Gun ownership needs to be taken as seriously -- no, more seriously -- than driving a car.  After all, you can always take a bus. But you should not be able to take a bus loaded with weaponry. You do have to get a photo ID to drive and it needs to be renewed every eight or so years, because you could become OWI in the meantime. Even operating while intoxicated isn't as bad as buying guns so you can shoot people.

 

I read the other day about a woman who was stuck in a traffic jam in CA and started shooting her handgun at other cars. Imagine that. Road rage is real, but usually you just have to worry about a fender bender. Did that lady think someone wasn't going to report her by her license plate?

 

So of course you need to get a license on that weapon to have it properly registered in your name. Do you? Guns can so easily change hands. But if a gun is registered to you, then no matter who uses it to kill people, YOU are responsible. Yes. Accept that. And there are ways to get guns where you don't have to register them. No one who sells you a gun currently cares about your mental health, or what you want it for.

 

We have to stop allowing concealed weapon or open carry laws. We have to stop. Because we cannot tell what any single individual carrying a gun is planning to do. Oh yes, they say, they're exerting their 2nd Amendment rights. No, they're not. There's nothing in the 2nd Amendment about walking around with a gun. People who lean on that amendment forget when it was written, and why. It was so each state had an active militia to protect against a "federalist" government. They were afraid the Brits might come back and try to re-exert influence again. Period.

 

On the other hand, if only concealed carry were allowed, then criminals might think twice, not knowing who might be carrying a gun and ready to shoot back.  The only thing that makes sense is concealed carry.  Then, too, the average citizen doesn't have to be made nervous or frightened seeing people walk around with these big guns. But the problem with concealed carry is the same -- what are they planning to do with that gun on their person? And how does any cop who confronts any traffic offense know who or what he's facing?

 

With concealed carry, every public building should install metal detectors -- don't worry, they'll get pretty cheap -- and anyone who enters a building with a gun needs to show his carry license, before going about his business.  It can be a kind of silent alarm, so that if there is a shooter in the building, they won't hear it go off and quickly scurry off to another public building to shoot up.

 

Gun owners also need to be aware that they will very likely not ever get the drop on anyone intent on doing harm.  Why? Because in a public place, you don't go there that day expecting trouble. The shooter does. The shooter is ready.  You're not. So who's going to out draw who?  You might be able to take him out after he's killed a few, but not before.

 

Finally, before I get to the resume part, think twice about needing a gun.  I never have and never will.  Instead, I prefer to live my life in a way that I'm not seen as a threat to others, and I hope you do, too.

 

Anyway, here's my step-by-step plan for someone who wants to get a gun.

 

  1. They need to be gainfully employed.  Seriously, they want to do a background check on someone in order for them to get a gun already, don't they?  Make sure they have and can hold a job.  The people who don't or haven't are more likely to turn suicidal, hold a grudge or become vindictive.
  2. They need character references.  Now just to be sure we understand this, these character references will need to be contacted, each of them, to make sure they are legitimate. They will need to testify to this person's personal character, first on paper, and then on the phone—and if necessary, in person.  The potential gun owner might be divorced, but he should be a willing partner to the divorce, and pay child support.  And if there are any red flags in any of these five references, then get more references.  Some of the questions these references must answer are related to the person's mental stability, and answers need to be consistent, and not sound coached.
  3. I think it's necessary that the person be over 25, at which age you can drive a rental vehicle. But if the person is aging, it could be important that they not have Alzheimer's and their eyesight isn't going.  I know that the aging population is at higher risk, but we don't want them to be a risk to others, or themselves.
  4. They need a clean record.  Squeaky clean.  Never arrested for drunkenness, never hit a cop, they don't speed (indicates stress), absolutely nothing in their past record.  As with resumes for jobs, they have to give past names used, past addresses, past jobs, social security number, driver's license number, whatever it takes to verify a clean record.  This is a must.
  5. The renewing of the license, too, is not a DMV-speedy event.  It's a week-long process, where the record is obtained for the past year to make sure their record stayed clean. If they have even one accusation of George-Zimmerman-itis, the gun is taken away.
  6. Before they're allowed to take the gun home, they need classes. Lots and lots of training.  They need to know how to put the safety on, and where to keep the weapon so that the kids don't get it but they can get at it in the event of burglary.
  7. Finally, they need this last bit of advice.  "You will likely never, ever shoot it.  Get used to that idea."

Now let's look at what Biden is proposing. These are all in the form of executive action currently, which would have to be made into law to have any real impact.

  • to propose a rule within 30 days to stop the proliferation of so-called "ghost guns," or makeshift weapons that can be constructed at home or that lack a serial number. These kits will be treated as firearms.
  • directing the Justice Department to issue a proposed rule within 60 days that makes clear a device marketed as a stabilizing brace, which effectively allows a pistol to operate as a short-barreled rifle, is subject to the requirements of the National Firearms Act
  • Bipartisan Background Checks Act, would expand background checks on firearm sales, closing a gun show and online sales loophole. It passed the House with the support of eight Republicans
  • the Enhanced Background Checks Act of 2021 would close another loophole dubbed the "Charleston loophole," which allows gun sales to proceed without a completed background check if three business days have passed, by extending the background check review period from three days to 10. The loophole is named because it is linked to the 2015 shooting in Charleston during which a white supremacist was able to obtain firearms that killed Black churchgoers.
  • Sen. Dianne Feinstein, D-Calif., and Rep. David Cicilline, D-R.I., have introduced a new bill that would revive the ban [on assault rifles]. "It was the law for the longest time. And it brought down these mass killings. We should do it again," Biden said.
  • Strip manufacturers of protection from lawsuits by repealing PLCAA (2005); as it stands now, it can only be sued for defective merchandise.
  • Red flag legislation will allow police and family to petition courts to remove firearms from people who may present a danger to themselves and others - the Justice Department would do this immediately to allow the states to enact this legislation but the federal government would need Congress to pass the law.
  • Contributions to community violence program in the last stimulus program.
  • Biden appointed a director to the Alcohol, Tobacco, Firearms and Explosives Division, which has been an empty position since 2015. He needs confirmation.

 

The most controversial of these is the repeal of Protection of Lawful Commerce in Arms Act (PLCAA), put into effect under GW Bush. This prevents the gun manufacturers from being sued, except if the weapon has a defect, or if they knowingly sold to someone for criminal activity. But this law also prevents the manufacturers from adding extra safety features, such as child locks or making them harder to steal. For instance, you can have a fingerprint ID on a phone; why not on a gun? There are those who say that making them responsible for how these weapons (meant to kill people) are used illegally is like making Ford responsible when people drive drunk. If you do make them responsible, wouldn't training and better background checks be a part of the sale? If someone drives drunk, and is killed, there is other culpability that can be enforced, unlike with weapons; if you are the victim, you can, for instance, go after a friend who let them drive drunk. It's called culpable negligence. I think since that PLCAA is so recent, it should go, and along with other measures noted above, manufacturers will start acting more responsibly in these measures.

 

Let's hope Biden can get this done, and soon, while we have a Democratic Congress. Some of the above information taken from

https://www.usatoday.com/story/news/politics/2021/03/24/gun-control-where-president-biden-stands-legislation-executive-orders/6989667002/;

https://www.govtrack.us/congress/bills/109/s397; 

https://www.msn.com/en-us/news/politics/biden-wants-to-end-gun-maker-liability-protections-that-could-sink-the-industry-advocates-say/ar-BB1ftgTI?li=BBorjTa

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