Will increasing tax rates on the wealthy close the budget deficit?

NO!  The Answer is NO!!!  Not even a tenth.  In the long term not even a hundredth.  This is just an FYI for those that don't actually want to read the post.  I'm actually fine with increasing taxes on the wealthy.  But it won't get us out of our hole.  It will make us go deeper slightly less quickly.


http://www.intellectualtakeout.org/library/chart-graph/federal-deficit-spending-billions


Increasing tax rates for Americans who earn more than 250,000 to the pre-Bush levels will result in 60,000,000,000 to 120,000,000,000 next year.  As cool as it was to write that, it's easier to just write 60-120 billion dollars.  That's a ton of money.  Probably way more than a ton of money.  Tons of money.  What will it do to stop the deficit spending?  Nothing.  It will reduce next year's shortfall of 1 trillion dollars by 5-10%.  We'll still have a much bigger hole than we did before.

http://seekingalpha.com/article/1006461-higher-taxes-on-the-rich-would-barely-dent-the-deficit


http://factsnotfantasy.blogspot.com/2010/11/cartoon-round-up_12.html

I'm still a little bit upset with hardcore President Obama voters who slammed Mitt Romney's plan.  Taxing the wealthy was Obama's plan. It was the only one I ever heard, except once, when the issue was pressed, he said he'd deal with it in 6 months.  Mitt's numbers didn't add up all the way.  He only would have managed 80-90% of the debt... Now we have Obama, and 5-10% of the new debt will get reduced.  The 16.5 trillion in debt that we have.  No plan for that.  But it's cool.  Done is done.  Obama has some advantages that I like along with the things I dislike.


http://www.freerepublic.com/focus/f-news/2370685/posts
The above cartoon was from 2009.  Imagine how big that hole is now.  :)

Using the term "fiscal cliff" is wrong.  Just thought I'd throw this out there.

http://www.examiner.com/article/with-gop-on-defense-as-voters-say-tax-the-rich-does-boehner-fear-fiscal-cliff


http://davidswanson.org/node/1713

Reading another article, it looks like President Obama is also planning to increase investment tax rates to 20% (they're now at 15%) and dividends tax rates to the same level as a person's top income rate (they're also now at 15%)  It looks like this will only be done on "the rich."  And this is almost exactly the same thing I heard out of Mitt Romney explaining his tax plan.  Not sure who thought of it first, but I think it's a good idea.

http://money.cnn.com/2012/11/14/news/economy/obama-taxes-deficit/


http://www.coyoteblog.com/coyote_blog/tag/economy

I understand the idea of giving people an incentive to save by reducing their tax rates on income gotten through savings, but lets face it, most Americans aren't saving.  The probability that a person saves money increases almost directly parallel to their income.


http://redalexandriava.com/2012/02/24/cartoon-of-the-day-obamas-pledge-to-cut-the-deficit/

I keep seeing 1.6 trillion quoted as the increased revenue from changed tax rates for the wealthiest, and my understanding is that this is the amount over ten years.  Why they had to multiply the savings over ten years and give it to us that way I have no idea.  But 1.6 trillion in ten years is not much at all when we already have 16.5 trillion in debt, and the debt is increasing by more than 1 trillion per year.


http://brianwoods.com/?m=200904

My big thought about all of this though, is that it won't be enough.  It never can be.  I think when any entity is spending more than it takes in, the main control has to be on reducing expenditures, not on increasing income.  Very rich multi-millionaire athletes and others find themselves in the poor house all the time.  It's easy to spend money, and in the case of many democrats, it's fairly easy to increase government income from taxing the American people.  Controlling expenditures is hard.  That's the key to the federal deficit.  Medicare and Medicaid will have increasing expenses over time.


http://www.americanthinker.com/2010/08/iraq_the_war_that_broke_us_not.html

Compare the US deficit to Canada's 26 billion dollar deficit.  Their government is actively working to balance the budget.  Good job Canadians.  Come on US, let's follow suit.

http://www.globalmontreal.com/fiscal+update+showing+larger+deficit+puts+federal+government+promises+in+doubt/6442752860/story.html


http://polymath07.blogspot.com/2011_04_01_archive.html

In contrast, the US deficit increased by 120 billion dollars.  Just for the month of October.

http://www.thefiscaltimes.com/Columns/2012/11/14/Tax-Hikes-Worthless-Without-Entitlement-Reform.aspx#page1


http://www.cbsnews.com/8301-503544_162-57326268-503544/national-debt-crosses-15-trillion-mark/

As it stands now, by 2025 all federal revenue, ALL of our tax money, will be just enough to pay interest on debts, medicare, medicaid, and social security.  This is according to the Simpson-Bowles commission that President Obama requested.  It looks like both parties are guilty for not pushing it forward, as the resulting plan included some tax hikes which Republicans hated, and lots of spending reduction, which Democrats hated.

http://www.thefiscaltimes.com/Articles/2011/11/22/Super-Flaw-If-Only-Obama-Had-Upheld-Bowles-Simpson.aspx#page1


http://www.businessinsider.com/who-owns-the-us-national-debt-2011-1

The following link is especially upsetting to me.  Apparently a poll says that Americans prefer to tax the rich and keep Medicare, Medicaid, and Social Security how they are.  Nobody told these Americans that THE MATH DOESN'T ADD UP!!!  They heard all about how Romney's math didn't add up.  They appear not to understand that Obama's math doesn't add up either, and by a lot more.  Oh well.

http://peoplesworld.org/clergy-reject-grand-bargain-tax-the-rich/


http://blogs.fayobserver.com/mohn/March-2012

Men vs. Women: Negotiating: Why women make 80 cents to a man's dollar

This blog is mostly for the girls in my cohort of speech therapists. We're all in the process of getting jobs, and I just wanted to share something I heard on NPR a few weeks ago. A study showed that men are four times more likely to negotiate their salaries than women. The average graduate level employee that negotiates their salary for their first job makes 1-1.5 million dollars more over the course of their career than someone who does not negotiate the salary of their first job.

Image from www.islandmix.com/backchat/

So how do you negotiate salary? Here's a link to a Washington Post article about that: http://www.washingtonpost.com/wp-srv/jobs/how-to/negotiate_salary_guidance.html And here's a link to an askmen article about it: http://www.askmen.com/money/career_100/141_career.html The ask men article seems quite useful... And I have no idea why they have a website called askmen. It's kinda weird. But the article is good. I had to X an ad to see the article, but that's not a big deal.

Image from http://ozguru.mu.nu/archives/2007/03/

The main idea of these articles is to do your research, know what you're worth, let them introduce the salary, and then talk it out with them. Anyway, some of us that are working at schools will have exactly 0 opportunity to negotiate. Although EBS, which contracts therapists to schools, will pay an SLP on average 3-7,000 more per year than the district would have otherwise. Which means that school districts do negotiate. Anyway... NEGOTIATE! Think of whether 1.5 million dollars is worth a little conversation instead of a rubber-stamp "yes" when they make an offer.

Image from www.10dailythings.com/2010/07/25/

As Speech Language Pathologists, we are in demand! A good number of us will be working at a place that wouldn't have an SLP, or would have to pay thousands more per year to a company to contract one, if we didn't work there. I have found a job for CFYs that offers 62,000, one that offers 63,000plus, and one that offers 94,000 for a CFY!

Rich and Poor

My original purpose in this blog was to talk about the idea of a flat tax to replace the current stepped tax brackets that are used in the United States presently. I want to first talk about the relativity of wealth or poverty. It’s always interesting to me that nearly everyone thinks of themselves as ‘middle class.’ I knew a guy once that made $400,000 plus per year. When confronted with the opinion that he was rich, he said “no, I know a lot of guys that have way more money than I do.”

Others, like myself, may live in poverty, making far less than the established guidelines for poverty, and yet, we consider ourselves middle class. The idea of class originates in Europe from what I know, and was used in a time when class positions were not easily changed. Here and now many of us may make minimum wage when we are teenagers or even in the twenties, and make more than $100,000 per year later in life. Of course class wasn’t and isn’t just about income. It’s about culture. And in any case I hate class. The idea of some people being better than others because of the way they were raised. It continues to exist to some degree here, but thankfully, I believe it is much less prominent than in previous times or in other places. In any case it is all relative.
An Alexander the Great or a Julius Caesar did not have the internet. He did not have air conditioning. He did not have his choice from hundreds of different food items at any given time. He did not have a car. He didn’t have living quarters free from bugs. He didn’t have over the counter pain killers. While he may have had tailor made clothing, there weren’t a wealth of materials to choose from. He didn’t have TV or movies or video games. These are differences between him and us, and it is us in the enviable position of being the “haves”. Not only are these differences between peoples in ancient times and us, they are differences between us and others that are living and breathing right now. There are people that don’t have any of these things, and there are probably hundreds of millions of them. I just put $10,000 into the annual income cell at http://globalrichlist.com/ If I’d made that amount last year then I would be richer than 86.69% of people on planet earth. The reason that this is the case is that money is not evenly distributed… AT ALL!!! Look at the income graph below:
Graph from: http://benbyerly.wordpress.com/2008/11/28/how-rich-are-you/
According to this site, anyone that makes more than $47,500 per year is within the top 1% of income earners on the planet. The median income, which would be the one at the number 3 on the graph, is $1,700 per year.

Looking at annual income is one way to look at the disparity. Looking at ‘wealth’ is another. Looking at wealth, we look at the total value of assets minus total value of debts. There is some correlation with annual income, but not as much as you’d think. 40% of Americans own 1% of America’s wealth. 1% of Americans owns 38% of America’s wealth. The 40% (like me right now) are not saving any money, and have roughly equivalent income and expenses, and if they start making 100 times more money, they will start having 100 times more expenses. The other groups actually save and invest money in most cases, or have an inheritance in a few cases.

So the question is, are you getting compound interest, or paying compound interest? It’s not entirely coincidental in my opinion that the graph showing the increase of money with interest over time looks a lot like the annual income graph above. $100 per month for a year isn’t $1,200. At 7% interest, it’s $1,284. Not much right? At 5 years it’s $7,384. At 10 years it’s $17,740. At 20 years it’s $52,638. At 40 years it’s $256,331. At 50 years it’s $521,983. At 60 years it’s $1,044,560. That is $72,000 in money you put in over 60 years, and $1,044,560 you get out. Do you have $100 per month? Once I have a career job later this year, I’m going to put a lot more than $100.00 into savings/investments per month.
When I was in my second year of college, after my mission to Colombia, I had a friend that was single and raking in the money, and he didn’t know what else to spend it on. I was taking a personal finance class at Utah Valley State College (now Utah Valley University) and showed him the magic of compound interest. When he moved out, he had been getting interest on $1,000 per month invested for a number of months. If he does that for 40 years at 7% interest, he’s up to 2.6 million dollars. I should have charged him for my services.

I think having money helps, whether you want it for yourself or you want to help others. It won't bring happiness, but it can allow you to do a lot of good in the world. Anyway, there’s a major huge ginormous article split into 10 parts called “The United States of Inequality” by Timothy Noah on Slate.com: http://www.slate.com/id/2267157/ I’m going to read it now. It sounds interesting. More interesting to me than writing more blog.