Raising the debt ceiling

Grover Norquist?

Gordon Gray said:

Grover Norquist?

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Precisely, his only agenda is Republican control, at any cost. He could care less about our nation, he only cares about power. As far as I'm concerned, he should be labeled anti-American.

Pretty scary dude Steve. Makes Mr. Rove look like Beaver Clever.

He apparently was elated with the failure of the Super Committee. All six Republican Committee members have signed his "no tax increase" pledge. Mission accomplished.

Had ties to Madoff and other wonderful folks.

His grand vision is to have the Republicans take control of the Senate and effectively block anything the Democrats or Obama try to do, assuming Obama is re-elected.

If anyone missed last Sundays' 60 Minutes program, you might be interested in checking out the interview on the internet and make your own judgment.

GG

Honestly, I'm so tired of hearing this "rich should pay their fair share" thing. The rich do pay their fair share. I started a company several years ago that was acquired by a major corporation. At the end of the day, I paid a little over 60% of the proceeds to the federal government. Right off the bat, 35% went to corporate taxes. Money that the company then paid to me in the form of salary was taxed at around 39% in the form of regular income taxes at the marginal rate. The remainder was taxed at 20% in the form of capital gains. Averaged out, I had lost about 61-63% of each dollar to the government.

Adding insult to injury, I get to hear the president demonize me almost daily, saying that I'm not paying my fair share.

So when I think about starting a new company, here's what runs through my mind: I will have to put my own capital at risk, endure long hours with no salary or company benefits for 4-5 years. The odds of success are very slim. Then, at the end, if the company is acquired, I will lose most of it to the government in the form of taxes, ever mind all the money I'll have to spend on corporate and tax lawyers. Why should I bother?

So, like so many of my colleagues, I and my capital are on strike. I won't be creating any new companies, or the jobs and tax revenue that implies. My capital will remain invested in the emerging Asian economies where governments actually welcome business. When the US government learns that we must encourage, attract and retain businesses rather then demonize their leaders, I'll be back. Thriving, profitable businesses are the solution, not the problem.

Gordon Gray said:

So now that the Popper Committee has failed, where to from here?

I hope I share most members disgust at our Congress's inability to function.

FWIW, the MSNBC website has a current vote going on regarding the reason for failure.

Current result, with some 70,000 folks voting is:

Both sides / 17 %.

Obama / 13%

Democrats 17%

Republicans 53%

I know that MSNBC is seen (by conservatives) as being somewhat on the liberal side of the equation but this result seems to be reinforced by another poll that asked if the "rich" should be required to pay their fair tax share.

75% said yes.

GG

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Interesting. Your goal is to get something started that is then bought out. My goal has been to make something that leads to significant differences in the way people live. Yet I suspect we are both at or near the1%. I really do not mind the taxes I pay and I give more to people who are less lucky in life. I do mind the incompetence in governing we are seeing in congress. I have not seen much of that in government workers who are in general under paid and do a credible job.

I suspect if we could bias the tax rules so that long term personally owned firms got a tax advantage and that short term ( less than 5-10 years) did not ; some good things would happen.

autoformer said:

Honestly, I'm so tired of hearing this "rich should pay their fair share" thing. The rich do pay their fair share. I started a company several years ago that was acquired by a major corporation. At the end of the day, I paid a little over 60% of the proceeds to the federal government. Right off the bat, 35% went to corporate taxes. Money that the company then paid to me in the form of salary was taxed at around 39% in the form of regular income taxes at the marginal rate. The remainder was taxed at 20% in the form of capital gains. Averaged out, I had lost about 61-63% of each dollar to the government.

Adding insult to injury, I get to hear the president demonize me almost daily, saying that I'm not paying my fair share.

So when I think about starting a new company, here's what runs through my mind: I will have to put my own capital at risk, endure long hours with no salary or company benefits for 4-5 years. The odds of success are very slim. Then, at the end, if the company is acquired, I will lose most of it to the government in the form of taxes, ever mind all the money I'll have to spend on corporate and tax lawyers. Why should I bother?

So, like so many of my colleagues, I and my capital are on strike. I won't be creating any new companies, or the jobs and tax revenue that implies. My capital will remain invested in the emerging Asian economies where governments actually welcome business. When the US government learns that we must encourage, attract and retain businesses rather then demonize their leaders, I'll be back. Thriving, profitable businesses are the solution, not the problem.

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Was this >60% tax rate just on the year you sold the company? Did you pay that kind of rate the year before, when you did not sell the company? Are you saying you shouldn't have to pay a capital gains tax? I, too have paid an extra 30% in a year with large (to me) gains, but that was a one time deal. I disagree that the wealthy pay their fair share; especially with Bush's tax breaks still in effect. Of course, wealthy is relative, but somewhere along the line, the wealthier can afford a higher percentage than those less wealthy. I'm not saying so much more as to keep everyone equal, that's ridiculous, but it can't really be argued out without specific numbers.

Not really, it just always seems to turn out that way. Of course, I always start trying to do something that improves peoples' lives. Focus on the customer to exclusion of everything else and you are usually on the right path.

I agree that the tax code is not particularly friendly to startup companies whose activities are not diversified enough to take advantages of the many tax loopholes that large corporations can leverage to minimize their tax burden.

And I don't mind paying taxes either, but sheesh, don't you think that 60+ cents on the dollar is just a bit excessive?

jmschnur said:

Interesting. Your goal is to get something started that is then bought out. My goal has been to make something that leads to significant differences in the way people live. Yet I suspect we are both at or near the1%. I really do not mind the taxes I pay and I give more to people who are less lucky in life. I do mind the incompetence in governing we are seeing in congress. I have not seen much of that in government workers who are in general under paid and do a credible job.

I suspect if we could bias the tax rules so that long term personally owned firms got a tax advantage and that short term ( less than 5-10 years) did not ; some good things would happen.

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Yes, only during the year the company was sold. Corp tax+regular income tax+cap gains. When you take the total proceeds, subtract the taxes in all their forms, the founders realized around 37-40 cents of each dollar from the gross proceeds of the sale.

I think that's excessive. And after paying that much tax, I'm still a bad guy. I hear it every day. The President thinks I'm a bad guy who's not paying his fair share. At least one half of the Congress agrees with him. And I'm sure I'd be torn to shreds if I blundered into an Occupy protest.

What must I do to be considered a honorable citizen who has contributed fairly? 80%? 90%?

Sincerely,
A Demoralized Entrepreneur

autoformer said:

Yes, only during the year the company was sold. Corp tax+regular income tax+cap gains. When take the total proceeds, subtract the taxes in all their forms, the founders realized around 37-40 cents of each dollar from the gross proceeds of the sale.

I think that's excessive. And after paying that much tax, I'm still a bad guy. I hear it every day. The President thinks I'm a bad guy who's not paying his fair share. At least one half of the Congress agrees with him. And I'm sure I'd be torn to shreds if I blundered into an Occupy protest.

What must I do to be considered a honorable citizen who has contributed fairly? 80%? 90%?

Sincerely,
A Demoralized Entrepreneur

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I read your story and it looks like you paid plenty that year. I don't know what percentage of business owners sell their businesses often, I would like to think that most business owners keep their companies for a while, but I can surely see that many times that does not happen, as in your case. During that ownership period, the tax rate is much less, due to not having the cap gains from selling the business, so hopefully, those were some money making years. If the goal is to make money by selling a business, then I agree, that is a hard road.

What distresses me is the great many wealthy who pay nowhere near that percentage in taxes, year after year. When I read headlines that $Billion companies paid $0 in taxes, it infuriates me, it is so grossly unfair. When I read of multimillionaires paying the same rate of tax as those who will never see a $Million in their lifetime, the greed is so apparent, that infuriates me. For many people the question becomes, "How much is enough?", at least it did for me.

I agree with you, Steve. And it is particularly unfair to small to medium sized entrepreneurs who don't have the breadth of activities that large companies have, allowing them to take advantage of subsidies and tax shelters. That hurts the economy the most, since it is these smaller to midsize businesses that form the backbone of employment in any free country.

I am for a level playing field for both businesses and individuals. The government should stop playing favorites and ask everyone to pay the same percentage across the board. Once you start with the concept of progressive taxation depending on income or revenue, the government has gotten into the business of picking winners and losers. I know this isn't a popular idea among low income groups, but everyone should have some skin in the game. Everyone should have a stake. Everyone should pay at least something.

slowGEEZR said:

What distresses me is the great many wealthy who pay nowhere near that percentage in taxes, year after year. When I read headlines that $Billion companies paid $0 in taxes, it infuriates me, it is so grossly unfair. When I read of multimillionaires paying the same rate of tax as those who will never see a $Million in their lifetime, the greed is so apparent, that infuriates me. For many people the question becomes, "How much is enough?", at least it did for me.

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I would be for that if say the first $25k of disposable income per person $50k per family was not taxed and then a rate of say 25% tax rate with no deductions.

Hi Auto,

I was merely reporting what the polls seem to clearly indicate.

It's not only Obama but a clear majority of Americans who share the opinion that the tax code needs to be revised to address apparent inequalities in the system.

I'm sorry that you are sick of it but I don't think the issue is going away. The "Occupy" movement (in part) seems to support this sentiment.

As long as Republicans take the "over my dead body" position, as espoused by Norquist et al, little progress can / will be made.

GG

PS: Please don't shoot the messenger.

Hi Gordon,
Yeah, I hear what you're saying. People are hurting, but they're also very confused. Some of the things you hear out of the Occupy movement are just ridiculous. In the same breath, protesters complain about unemployment, then rant about tearing down the banking system. How do they think businesses are capitalized? And who do they think creates jobs? The best thing the government can do to fix the jobs situation is to get off the backs of businesspeople. As a businessperson, all I really want is for government to stay out of my way. And yet, people are calling for even more regulation. It just doesn't make any sense. A more prosperous business environment means more jobs. It's as plain and simple as that.

Gordon Gray said:

Hi Auto,

I was merely reporting what the polls seem to clearly indicate.

It's not only Obama but a clear majority of Americans who share the opinion that the tax code needs to be revised to address apparent inequalities in the system.

I'm sorry that you are sick of it but I don't think the issue is going away. The "Occupy" movement (in part) seems to support this sentiment.

As long as Republicans take the "over my dead body" position, as espoused by Norquist et al, little progress can / will be made.

GG

PS: Please don't shoot the messenger.

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autoformer said:

The best thing the government can do to fix the jobs situation is to get off the backs of businesspeople. As a businessperson, all I really want is for government to stay out of my way. And yet, people are calling for even more regulation. It just doesn't make any sense. A more prosperous business environment means more jobs. It's as plain and simple as that.

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I would submit that we are in the current situation in large part because of too little regulation. Sorry, but I don't buy into your argument that an unregulated business climate is the best thing for our country. It has been shown time and again that unregulated businesses pursue profits at the expense of everything else, including the health, safety and well-being of the country. The recent melt-down on Wall Street and in our banking sector is a prime example. Too little regulation led to people taking too much risk in order to make short-term profits and resulted in a catastrophic shock to our national economy. Proper regulation of those industries could have prevented that from occurring.

I also really don't buy into your sob story on the burden of taxation from selling your business. We sold our business in 2000, before the Bush tax cuts came into effect. But we didn't have to pay near the level of taxes you are describing. And we had plenty of money left from the sale of that business to live happily for the rest of our lives. We didn't need the Bush tax cuts, but have benefitted from them nonetheless. While the nation as a whole has suffered.

As I pointed out above, some of the greatest economic expansion this country has ever had occurred when tax rates were much, much higher than they are now. And the past ten years of Bush tax cuts have given us some of the most anemic economic growth we have ever had, so your argument that higher taxes are going to deter investors from creating new businesses is obviously a false assertion, as is its implied corollary. You and your capital are "on strike?" Give me a break. You are just investing your capital in whatever area you think will currently get you the highest return on your dollar, so you can make even more money, as any intelligent investor does. Once the economic cycle recovers in the U.S., you will be looking to invest here, regardless of what the tax and/or regulatory climate is like. You will chase the opportunity, wherever it arises.

Hi Auto,

That's why I said "in part" when referencing the Occupy movement.

To be effective in the political environment, they need to have a clear, concise, defensible message.

Their lack of the above compromises their credibility.

Gordon

From a story on the Black Friday retail sales picture:

Marshal Cohen, chief retail analyst of NPD group, a marketing research services firm, told "The Early Show," "There is no stimulus package, there is no jobs program, there is no tax rebate that the president's put on the table, so it's really up to the consumer to go toe the line themselves."

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In other words, republican policies are hurting, not helping, retail business in America right now. Why, one would almost think that the republicans desperately wanted to avoid an economic recovery before the 2012 elections, and will do anything to stop it. Say it isn't so.

Maybe you all ought to stick to Audio discussion , at least its something you all know how to discuss with intelligence. Happy Thanksgiving weekend!

Well excuse the hell out of me Rep.

By the way, that is a very intelligent post. Shows that you are a truly deep thinker.

GG

PS: And if you do have something of substance to add other than your inane comment that we are all stupid (except you of course), please do.

As Dave has said on many occasions, if you don't like the discussion, you can ignore it.

That's why this section is called "OFF TOPIC".

Hi Rich,
Of course, I agree that we must have some regulation, particularly in the financial sector. We just have to be smart about it. I hope you agree, however, that too much drives business away. Sarbanes-Oxley is a good example. I have seen first hand how SOX compliance increases management cost and complexity by concentrating too much responsibility at the top levels of an organization. SOX makes it difficult to distribute authority properly throughout an organization, slowing decison-making and action. Of course, that was the very point of SOX - to ensure upper management accountability for activities throughout their organizations. It probably sounds like a good idea to politicians who've never run a business but, in practice, it creates a lot of inefficiency. When you see regulatory compliance resulting in small line of business expenditures on the order of $250k going to your executive board for approval in a global company with over 100,000 employees, there's a regulatory problem.

Regarding tax rates, see here for Federal C corp tax rates:
http://en.wikipedia.org/wiki/C_corporation

Taxable Income ($) Tax Rate Of amount over
Over But not over
$0 $50,000 15% $0
50,000 75,000 25% + $7,500 50,000
75,000 100,000 34% + 13,750 75,000
100,000 335,000 39% + 22,250 100,000
335,000 10,000,000 34% + 113,900 335,000
10,000,000 15,000,000 35% + 3,400,000 10,000,000
15,000,000 18,333,333 38% + 5,150,000 15,000,000
18,333,333 — 35% 0

Those are the rates. Now, as the remaining money passes from your C corp to your pocket, it is taxed a second time and subject to either regular income tax rates or capital gains. Add it up. My numbers are, if anything, conservative. Having "enough to live happily" isn't the point. The point is, whether you think that the government taking over 60% of your hard-earned money is reasonable. I don't.

In M&A scenarios, a stock swap is a great solution, since it keeps everything in capital gains. But depending on the parties involved, it's not always possible. In particular, if the parties are based in different countries, it can be disadvantageous.

I agree with you that the previous administration's policies were a disaster. But I doubt that tax cuts were nearly as much of a problem as the 2 wars we started in the wake of 9/11. We need to learn to mind our own business, but it doesn't look like we have. Last week, the President announced troop deployments to Australia and naval assistance to the Philippines. Both moves are to counter China's growing influence in the Pacific. The South China Sea will be a flash point. The Chinese are encroaching on Philippine atolls there, ferrying material and equipment to build oil rigs. The US will stand with its old ally. Thoughtful diplomacy is key to avoiding dangerous contention with China over resources.

Investing in the emerging Asian countries might look promising at the moment, but it's a tenuous game. I am very concerned about the President's announcements last week and, as in investor, am watching the situation closely.

Rich said:

I would submit that we are in the current situation in large part because of too little regulation. Sorry, but I don't buy into your argument that an unregulated business climate is the best thing for our country. It has been shown time and again that unregulated businesses pursue profits at the expense of everything else, including the health, safety and well-being of the country. The recent melt-down on Wall Street and in our banking sector is a prime example. Too little regulation led to people taking too much risk in order to make short-term profits and resulted in a catastrophic shock to our national economy. Proper regulation of those industries could have prevented that from occurring.

I also really don't buy into your sob story on the burden of taxation from selling your business. We sold our business in 2000, before the Bush tax cuts came into effect. But we didn't have to pay near the level of taxes you are describing. And we had plenty of money left from the sale of that business to live happily for the rest of our lives. We didn't need the Bush tax cuts, but have benefitted from them nonetheless. While the nation as a whole has suffered.

As I pointed out above, some of the greatest economic expansion this country has ever had occurred when tax rates were much, much higher than they are now. And the past ten years of Bush tax cuts have given us some of the most anemic economic growth we have ever had, so your argument that higher taxes are going to deter investors from creating new businesses is obviously a false assertion, as is its implied corollary. You and your capital are "on strike?" Give me a break. You are just investing your capital in whatever area you think will currently get you the highest return on your dollar, so you can make even more money, as any intelligent investor does. Once the economic cycle recovers in the U.S., you will be looking to invest here, regardless of what the tax and/or regulatory climate is like. You will chase the opportunity, wherever it arises.

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repman said:

Maybe you all ought to stick to Audio discussion , at least its something you all know how to discuss with intelligence. Happy Thanksgiving weekend!

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I suppose that you think the current group of republican candidates for presidents does a better job on this topic?