Forum Post: Romney Makes a Case AGAINST Trickle Down Economics - and a Case For Increasing Taxes on Rich Americans whether they are executive wage earners, investors, or business owners.
Posted 4 years ago on Jan. 26, 2012, 10:49 p.m. EST by Middleaged
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There is much talk about Mitt Romney's Tax Filings.
And everyone now knows that Mitt Romney didn't take his money and invest in creating jobs by investing directly in a business or corporation. Mitt just bought stocks and bonds. He didn't trickle down and create jobs.
I don't believe Americans are good at analysis in our bipartisan political system. Determined Democrats and Republican can't be moved from their views. Many entrenched Americans jump into offensive and defensive positions when they meet a new or different idea. Big time friction if you talk politics or corporations in a midwest bar!!
How long have we been told by Republicans that the Rich create jobs in the USA when the tax rates are low. There is little evidence that the rich create job or that we are dependent on rich people for our economy. We know much of our tax history show tremendous growth in the economy during times when taxes were as much as 90% for the top tier.
The Rich in America consider many things in protecting their wealth:
1) Risk: we want low risk if we are rich. 2) Invest as a bond holder or share holder to reduce risk. 3) Invest in the Best kinds of industries, businesses, and look for "Blue Chip" type corporations 4) Opening a Business or starting a corporation is very risky, involves loans, involves putting up capital, and dealing with overhead expenses. 5) Business's goal is to maximize profits and revenues, and reduce overhead such as employees (reduce employees not provide jobs to the public). 6) Automate as much as possible to reduce employee overhead. 7) Use outside resources for accounting, legal, and other so that we don't' have to pay overhead for their taxes, health care, retirement, and other benefits.
If I get rich I will not put my money into a business since I don't have the personality, am risk averse, and I don't have a network of business connections. I haven't made much in dividend income, am in a lower tax bracket, and don't really like paying even the 15% on my dividends over the last 3 years. Many Americans seem to think 24% is a good tax rate for dividend income and for rich people in general as per Gallup polls (NPR Radio 23 Jan 2012). So okay I'll have to pay 25%-30% on my $200 dollar dividends at the end of the year when the tax rate goes up. Or what ever dividends I get.
There is at least another perspective here.
1) Instead of austerity (cutting benefits for those that lost jobs, don't have jobs, and now depend on social programs) we can raise taxes on the rich. 2) Let's encourage people to learn and get involved in financial management like buying stocks and bonds. 3) Let's increase the financial and Banking education of all people. 4) It is an illusion that all people can not learn about banking, finance, and investing in stocks and bonds. 5) It is an illusion that we are dependant on the rich in America. The truth is that certain men think they are better/smarter than the rest of us. 6) Men keep us down by controlling information - so we need to keep the Internet open to all and free for all to preserve liberty, freedom, transparency, democracy, and a fair banking-government system (BGS - Banking Government System). 7) We have to cut out loop holes in corporate taxes. 8) Executives Defered Wages should be outlawed since it is a gimick. 9) After business loop holes are closed, there needs to be an alternative minimum tax for Rich people, corporate executives (for all wages and bonuses including differed wages), and for businesses and corporations.
I don't believe rich Americans will take their money and leave the USA if their taxes are increased for the following reasons:
A) The best markets are in the USA for sales of business and consumer goods (or at least very lucrative markets if no longer the best markets). B) Most Americans like to be around other Americans, and like the infrastructure, high speed internet, or the convenience of living, investing, and doing business in the USA. C) The culture in other countries is different, can be difficult to comprehend the Spanish Law system in Central and South America, it can be difficult to get housing with American Standards, and most in the USA can not or will not adapt to living overseas outside of the USA.
So How Do We Encourage Businesses to operate in the USA? That is the problem. The right wing says we have to reduce regulation on businesses, but banking deregulation is how we got this Financial Crisis. William K. Black is the best teacher here. Check out his video: http://www.youtube.com/watch?v=6YT84CokUsA
A) Clearly we can not give in to voices for deregulation. Corporate America must comply with Accounting Rules (GAAP).
B) We can create individual Economic Free Zones in big cities that would reduce business rules, taxes, and even be union free for small entrepreneurs.
C) We need to reinstate banking and finance regulations and separate commercial banks from retail banks.
D) Maybe barriers to entry into food and small shops can be reduced to allow new businesses time to meet certification standards.
E) Maybe we can apply Tarrifs to imported goods to protect our new manufacturing corporations.
F) Corporate Structures in the USA must change to prevent looting through complex benifits packages and deferred wages being held in corporate trusts indefinately - how businesses are incorporated, and the board of directors, executive compensation. Publically and Privately held corporations must be rated to provide transparency of outrageous compensation packages.
G) Ratings Agencies and Independent Accounting Firms must be regulated to hold them accountable and put all businesses on the same playing field so that no corporation holds an advantage of manipulated Ratings and Fake certification by accounting firms.
H) We need to stop selling our new and unique Techology to foreign nations who then have the competitive advantage (sales of businesses and transfer of technology).
I) We can stimulate the Economy and Small Businesses by bringing US Military Troops back from Germany and South Korea. These service memebers will spend their money in the US Economy instead of overseas - and we will need lots of new construction at our bases, camps, and installations to accomidate them with new barracks, maintenance, and training facilities.