Friday, February 12, 2016


President Bill Clinton cleaned up the first President Bush's destruction of the banking and credit union systems, and left us with a budget surplus.  Then came Bush two. With large tax cuts to the corporations and a needless war based on lies, the budget surplus rapidly turned into a rapid rise in the national debt.  The banking industry realizing no on was watching again, collapsed under their own fraud.  For a second time a Bush presidency resulted in the collapse of the economy and in particular the financial sector.  President Obama inherited trillion dollar deficits to the national budget.  His choice was to pay the bills or allow the government to default.  The bills were incurred by Bush and his fellow Republicans.  President Obama just paid the bills.

So now over a mere $30 billion dollars the same nut job Republicans are prepared to shut down the government.  "If Republicans and Democrats can’t find a way to trim $30 billion from a $4 trillion budget, “then none of us deserve to be here as members of Congress,” said Labrador  Guys, I agree we can find $30 billion in savings - that is not the issue - given the size of the problem $30 billion is nothing.



We are trying set a budget based on the same model which is driven my corporate welfare.  Here is the deal whether you believe it or not - you only are willing to pay so much for any given item.  There comes a point where the price reaches a level you will not buy the item.  You are the check on how corporations respond to taxes.  Yes, the corporate heads pass on corporate taxes in the form of higher prices.  But there is a point if they want to sell their product they can only charge so much.

The stock market is the biggest welfare system in the U.S.  People do not understand the difference between buying stock to help a corporation expand and grow and buying stock based on speculation that some new drug will increase the value of the corporation.  Capital gains is profits you make based on what you paid for something and how much you sold that same thing at a later date.  So if you spend $5,000 for a stock purchase and then later sell at $10,000 you have $5,000 in capital gains - which is taxable.

But not all capital gains are the same.  If I am willing to invest in a new company which will build new facilities and hire new employees, I should be given 5 years of no taxes on the capital gains I may earn when I sell the stock.  Why?  Because my investment resulted in new construction and new jobs which means new taxes paid to the government. 

But if my capital gains is from speculation that an existing business will increase in value because of a new pharmaceutical, then I have contributed nothing to the economy.  My trade was merely between speculators and not between me and a new business trying to raise revenue to start the business.  If my capital gains is the result of speculation, then the tax should be 35%. 

It is not merely about making speculators pay more.  It is about investors knowing if they invest in new businesses which bring new jobs and new tax revenues, then they will have 5 years to make money on their investment without having to pay a capital gains tax.  This grows the economy and tax base, whereas mere speculation on a corporate profits going up does nothing to create jobs and new taxes.

This is what I mean by change.  Our entire method of raising revenue must change.  The government spends less per recipient to manage Medicare than insurance companies spend to manage each insured.  The original idea of Part D [prescription drugs for seniors] was the government buying the medications on the open market and then making them available to seniors.  It's called the free market system.  The corporatists said no and forced all seniors who want Part D to buy the drugs on the open market for more than the government would pay as a larger buyer.  The taxpayer share went through the roof - this is a big part of our budget deficit created by Bush II and the Republicans.

President Obama wanted universal healthcare to be one payer.  The payer would be the government.  It has been proven the government is more efficient than insurance companies. The government does not have to pay the shareholders a profit or corporate heads million dollar salaries and bonuses.  The Republican compromise was doing away with the one payer system in favor of forcing the people to buy from hundreds of private insurance companies.  This caused the price of universal healthcare to go through the ceiling and corporate profits to go up.  The true solution should have been - a simple choice - you can keep what you have or sign up for universal healthcare through the government.

The real con was when the Republicans initiated the litigation to have held unconstitutional their compromise.

Really guys with a $4 trillion dollar budget you are going to shut down the government over $30 billion?  How about President Obama shut down the government unless the new budget ends Republican Corporate Welfare.  How about President Obama shut down the government unless the Republicans restore capital gains on speculation investments to 35%, and change Medicare Part D to a government program where the government using the open market buys the prescription drugs.

The entire budget deficit and national debt debate is a con by the Republicans.  They refuse to accept any meaningful change in how the government raises revenue.  They refuse to allow the market system to determine the price of drugs.  They refuse to do anything which might lower the multi-million dollar wages of corporate heads, while a growing number of Americans are working two part time jobs just to have a 40 hour week. 


Anonymous said...

You're comparing capital gains on stock investments with capital investment. If you buy capital equipment (buildings, machinery, etc), there's a very favorable tax treatment on that via depreciation and/or capital expenses, both of which lower your profitability and lower your taxes. Depreciation can even be accelerated to reduce further your taxes. That's really where you get five years of lower taxes!

After you your investment period, there's no reason to treat capital gains differently.

BobbyWC said...

You do not seem to understand start ups. People buy stocks in new companies so that they have the capital to start the company. Those people should be give 5 years of no taxes on profits if they later share their stocks.

You are talking about the corporation. Yes, and rightfully so they get tax breaks in the form of depreciation. But I am not talking about the corporation. I am talking about the stock investor who buys on speculation the stocks are going to sore versus the guy who buts stocks in a new company looking for money to build.

Bobby WC

Anonymous said...

I don't understand start ups? Really, how many startups have you been involved with? When a company is trying to access the capital markets in order to grow and be a viable growing concern, they issue stock, which people can choose to buy or not. There's a certainly of risk involved-- there's no guarantee that they will succeed. You're comparing the capital markets with the the private markets. The accounting is totally different.

BobbyWC said...

Your're never going to get it. My post was on stock purchases only - not corporate practices - but you insist on talking about corporate practices.

Bobby WC