CARS HOMES JOBS

Argument that lower tax rates would create jobs is full of holes

Monday, November 26, 2012
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Argument that lower tax rates would create jobs is full of holes

The Nov. 18 letter by Don Cazer is refuted by Thomas Hungerford’s Sept. 14 report for the Congressional Research Service, “Taxes and the Economy.”

In it, an in-depth analysis was done on tax rates on the top income brackets from 1945 to the present. What they found was no correlation between reduced tax rates for the wealthy and economic growth. “The top tax rates appear to have little or no relation to the size of the economic pie.” What they did find was that lower top tax rates were associated with greater income inequality.

In other words, rich people don’t create jobs, consumers create jobs; and when middle-class consumers, who make up the bulk of the consumers in the country, become stressed from 30 years of tax policy that favors the wealthy at the expense of the middle class, we have what we have today — stalled economic growth and high unemployment.

Talk about fairness. Is it fair that capital gains is taxed at a lower rate than wages? We should be encouraging work and productivity, not money manipulation and wild speculation. The near monetary collapse of 2008 was a systemic failure.

The whole idea of free market capitalism comes into question when the bankers and the titans of Wall Street who are extolling the virtues of capitalism, where everyone is responsible for their own economic well being, themselves have to be bailed out to the tune of $7.7 trillion at near-zero interest with no strings attached.

In the United States, we have two social safety nets — one for the people at the bottom and one for the people at the top. Those of us in the middle pay the largest portion of our income in taxes and are on our own.

I say, let all the unjust Bush tax cuts expire. I’d gladly pay 1.5 percent to 2 percent more, which is my benefit of those cuts, to see the top brackets kick in 13 percent to 14 percent more, which is their benefit of those cuts.

Thirty of the largest corporations in the country spend more on lobbying than they pay in taxes. What does that say? It says they are not being taxed enough. It’s time we end the loopholes and tax shelters and make everyone, individual or corporation, pay at least the same percentage as the average middle-class working person.

Frank DeSantis

Gloversville

Thruway should resist raising tolls on trucks

As you may have heard, the state Thruway Authority plans a massive (roughly 45 percent) increase in tolls on large trucks.

Advocates state that trucks damage the Thruway, and that this toll increase is justified. First, trucks already pay way more in tolls than cars. Second, many federal and state laws limit weight, both total and by axle, as well as specify the arrangement of axles on large trucks. These laws ensure that large trucks do not damage our roadways.

In the last election cycle, one of the few things that everyone agreed on was the importance of small businesses; that it is, in fact, small- and medium-sized firms that are actually the biggest job creators in our economy.

Many trucking companies are just these kinds of enterprises. Many are family-run outfits that have been here for generations, some with deep roots in our regions. They provide employment, and many of them are good corporate citizens, through their businesses as well as personally giving back to their communities.

In addition, many of the businesses that these trucking companies serve are themselves small, locally based businesses and so, if trucking companies have to charge these clients more, the hardship on the trucking industry will effectively be spread throughout the economy.

Trucking companies are already struggling with rising costs — from health care, insurance, and near-record fuel prices.

Also, the way in which the Thruway Authority has gone about this, quietly slipping it through in hastily-called meetings, in some cases not even making the agenda public beforehand, seems to be the polar opposite of transparency in government, something Gov. Cuomo has tirelessly advocated for.

Eric K. Edlund

Delmar

Obama shouldn’t knuckle under to GOP demands

Dear President Obama: Congratulations on your re-election. You now have a mandate for change. Those who supported and voted for you were not the banks or Wall Street, but the poor and middle class. Do not betray them by capitulating to the demands of the Republicans whose main goal for 2012 was your defeat.

Do not cut Social Security, Medicare and Medicaid. These are important and successful programs that have protected our seniors from penury.

Do not be taken in by the “fiscal cliff.” These programs were not responsible for the deficit. The tax cuts for the wealthy and the ability of the wealthy and corporations to hide their money in overseas accounts, as well as the wars in Iraq and Afghanistan, are.

From experience, we know that austerity is not a job creator, but a job loser. We need to cut the military budget and use those funds to put people to work fixing our crumbling infrastructure. Our railroads are a shame compared to most other countries’. Do we need to have a bridge crumble and people lose their lives before we do needed repairs? Stand tall, we the people will stand with you.

Bertha Kriegler

Schenectady

 
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November 26, 2012
4:19 a.m.
janesjoys says...

Re Tax Rates - Oh, Frank, if only the people that need to understand what you are saying would actually read your letter with some level of comprehension! Unfortunately, you will never convince them on economic matters any more than on the validity of President Obama's birth certificate or global warming and the presence of dinasaurs. However, we need to keep trying, so thanks!

November 26, 2012
12:17 p.m.
wmarincic says...

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20.” Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now paid $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

November 26, 2012
12:18 p.m.
wmarincic says...

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man, "but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up because he wouldn't divide the money as fairly as they thought he should.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists, and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

November 26, 2012
5:51 p.m.
justapto says...

wmarincic your analogy is flawed. The tax code is NOT written to collect taxes. It is written to influence behavior.
Originally; the tax code was adopted to pay for wars. As the federal government grew, the tax code changed to a permanent one. Tax collection was regressive. Each person paid the same rate on the first $10,000 of income with each additional value of income being indexed. The next $100,000 or so,(as example), was taxed at a higher rate and the next $100,000 again at a higher rate. A man making $1 million does not pay 39% on the entire million only 39% on the amount above $1 million.
Then tax policy brought in a multitude of incentives to push for new investments in business, homes, energy upgrades, 'buy American cars', etc.
A simpler way: Tax on purchases. That eliminates tax shelters, special deductions, the underground economy from being tax free, drug money being taxed etc.
The more money you have the more you buy and the more expensive things you purchase.
I should pay 2% tax on my $100,000 home and you pay 2% on your $1 million one with the up grade furniture, cars, food, clothing etc generating increasing amounts of income. The more you make; the more you are taxed on the amount you have to enjoy from The Great American Dream.
My goal is to pay $1 million in tax.

November 28, 2012
12:03 p.m.
wmarincic says...

As we have seen after this election, many of the super rich are leaving America, that is not a surprise with what Obama and the dems have comming. BTW most are democrats, go figure.

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