What economic model do you believe?

In France, it is now hard left-wing socialism. Be prepared for private enterprise and wealth to flee France like rats off of a ship, increase in government spending, taxation out the hoo-ha, and in my prediction: a demonization of the wealthy for any ills, past, present, and future. Read the original here.

Nabila Ramdani: François Hollande will strike fear into the hearts of the rich
He has admitted that he 'does not like the rich' and declared: 'my real enemy is the world of finance'
NABILA RAMDANI
MONDAY 07 MAY 2012
UK Independent

France will be waking up today to its first Socialist President for 17 years – and bracing for radical change. There are all kinds of reasons why one might fear a François Hollande presidency, especially if you are a prosperous French person.

The 57-year-old Socialist has openly admitted that he "does not like the rich" and declared that "my real enemy is the world of finance". This means taxing the wealthy by up to 75 per cent, curtailing the activities of Paris as a centre for financial dealing, and ploughing millions into creating more civil service jobs.

Add an explicit threat to renegotiate the euro pact to replace austerity with "growth-creating" spending, and you have one of the most vehemently left-wing programmes in recent history.

German Chancellor Angela Merkel – the woman at the centre of the Franco-German economic powerhouse which has dominated Europe – was at one stage even threatening to campaign for her conservative ally, Nicolas Sarkozy, against Mr Hollande.

Caution is justified, though one thing Mr Hollande will not repeat is the disastrous tax-and-spend policies introduced by France's last Socialist President, François Mitterrand, in 1981. He was soon forced into a humiliating U-turn, and into sharing power with the right as the Communists quit his cabinet in protest.

In contrast, Mr Hollande will focus on solving the euro crisis and reversing a Gallic economic decline widely blamed on a failed capitalist system, and particularly a rotten banking sector.

Just as pertinently, he will seek to heal divides caused by five years of the most unpopular head of state in post-war history.

Mr Sarkozy continually stigmatised perceived undesirables, from France's six-million-strong Muslim community to Roma Travellers, whom his administration regularly deported.

The diminutive conservative has claimed Mr Hollande is an incompetent "liar" who will "bankrupt France", but the caricature of an untrustworthy leftist is wide of the mark.

Mr Hollande is an Enarque – a product of ENA (L'École Nationale d'Administration) France's elite "rulers' academy".

He came seventh in his year, above former conservative Prime Minister Dominique de Villepin, and is by no means the grey, provincial local government apparatchik his detractors claim.

Mr Hollande styles himself as a "social democrat" and not as any kind of revolutionary.

"I want to initiate a change in society in the long term," is how he put it earlier this month, as he outlined a programme which was far more pragmatic than ideological.

Mr Hollande's commitment to equality is evident in his promise to introduce parity between men and women in his cabinet, and create a ministry of women's rights. Efforts will also be made to promote equal pay between the sexes. He will bring under-represented minorities into government, and work to make the Republic more egalitarian.

Managing France is a near-impossible task at the best of times, and the current warnings of economic chaos and social disorder are no worse than those levelled at Mr Sarkozy five years ago.

François Hollande is going to have an extremely rough time, but he should not be written off as easily as some would like.

Who pays their fair share?

I'm guessing you do. But do government workers? Of course, the IRS is currently lead by a Treasury Secretary who decided that paying taxes was too complicated. So he just didn't. And then became Treasury Secretary. Other people would have had their wages garnished or been arrested. Read the original here.

Hey, how about administration officials pay their fair share of taxes?
POSTED AT 2:31 PM ON APRIL 18, 2012
BY TINA KORBE
HotAir.com

Over at our sister site, Townhall.com, Carol Platt Liebau and Kevin Glass issue a timely reminder. At the same time that the president shrilly demands passage of a rule to force millionaires to “pay their fair share” of taxes (passage the Senate didn’t deliver), administration officials and federal workers owe an astonishing amount in back taxes.

Some 36 members of Obama’s executive staff owe more than $800,000 in back taxes, while federal workers owe more than $3.4 billion in unpaid taxes, according to the Internal Revenue Service.

Granted, we can’t wait for perfect compliance to reform the tax code, just as we can’t wait for the elimination of every instance of waste, fraud and abuse before we reform entitlement programs. The noncompliance of so many members of the Obama administration and the federal government, though, might reveal yet another reason why they target “the rich” for tax increases. Because they don’t pay their own taxes, they don’t trust others to pay their fair share without special enforcement, either. “The rich” — as such a small portion of the population — are easy to monitor and easy to milk. Few millionaires would take the risk of fudging their tax returns — especially since the IRS is, in fact, auditing more millionaires these days.

Meanwhile, the Buffett Rule isn’t even the most disastrous tax the Obama administration has proposed of late. John Ransom calls attention to the many pitfalls of a global minimum tax, which Joe Biden recently touted:

A global minimum tax is a tax on all profits made by nominally US companies that operate overseas. They operate overseas for various reasons, but one big reason is because corporate taxes are higher in the US than overseas. And to fix high corporate taxes in the US, the Obama administration proposes even HIGHER TAXES on corporations. …

Not content to tax the rich here in the United States, Democrats are so hungry for welfare revenues that they now want to tax all revenue, everywhere, ignoring international borders, international waters and universal common sense.

And guess who is gonna pay the tax? When they toll the bell “rich” during this campaign, understand that that bell tolls for thee.

Because, while the “rich” may be someone across town in the US, the “rich” in Obama’s global sense, isyou. This is a tax that will fall most heavily on the poor and middle income earners.

The truth is, most of the tax increases the president has proposed will eventually hit the middle class, thanks to the phenomenon of trickle-down taxation. Grover Norquist thinks the American people won’t fall for tax-the-rich rhetoric again because they know eventually, in the eyes of the government, everybody will be considered “rich.” I hope he’s right — but the president’s opportunistic emphasis on the Buffett Rule during an election year suggests the president thinks his rhetoric will work.

The tax battle is not about “paying a fair share.” If it were, Obama would direct the injunction to pay up directly at the tax evaders in his administration. It is and always has been about wealth redistribution and centralization of power.

POTUS's taxes are lower than mine.

If I could afford to donate 22% of my earnings, I would. If I could lower my tax rate to equal that of POTUS, I would. There are a lot of things I wish I could do...How annoyed would you be if you were the secretary in this story? Read the original here.

President Obama’s Secretary Paid Higher Tax Rate Than He Did
Jake Tapper
Apr 13, 2012 3:00pm
ABC News

President Obama today released his 2011 federal income tax, with he and his wife reporting an adjusted gross income of $789,674. The Obamas paid $162,074 in total tax – an effective federal income tax rate of 20.5%. The Obamas also reported donating approximately 22% of their income to charity — $172,130.

President Obama has been making a big political push for the “Buffett Rule,” which would require millionaires to pay a minimum of 30% of their income in taxes. To illustrate the point, the president has pointed out that billionaire investor Warren Buffett pays a lower tax rate than does his secretary.

President Obama’s secretary, Anita Decker Breckenridge, makes $95,000 a year. White House spokeswoman Amy Brundage tells ABC News that Breckenridge “pays a slightly higher rate this year on her substantially lower income, which is exactly why we need to reform our tax code and ask the wealthiest to pay their fair share. ”

It should be noted that president would not be impacted by the Buffett Rule, though he would see his taxes go up if the so-called Bush tax cuts on higher income wage-earners were allowed to expire, as the president says he wants.

-Jake Tapper

Do you make money on dividends?

The President would like to tax it more. Read the original here.

Obama's Dividend Assault
A plan to triple the tax rate would hurt all shareholders.
February 22, 2012
WSJ.com

President Obama's 2013 budget is the gift that keeps on giving—to government. One buried surprise is his proposal to triple the tax rate on corporate dividends, which believe it or not is higher than in his previous budgets.

Mr. Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6% that will kick in next year. Add in the planned phase-out of deductions and exemptions, and the rate hits 41%. Then add the 3.8% investment tax surcharge in ObamaCare, and the new dividend tax rate in 2013 would be 44.8%—nearly three times today's 15% rate.

Keep in mind that dividends are paid to shareholders only after the corporation pays taxes on its profits. So assuming a maximum 35% corporate tax rate and a 44.8% dividend tax, the total tax on corporate earnings passed through as dividends would be 64.1%.

In previous budgets, Mr. Obama proposed an increase to 23.8% on both dividends and capital gains. That's roughly a 60% increase in the tax on investments, but at least it would maintain parity between taxes on capital gains and dividends, a principle established as part of George W. Bush's 2003 tax cut.

With the same rate on both forms of income, the tax code doesn't bias corporate decisions on whether to retain and reinvest profits (and allow the earnings to be capitalized into the stock price), or distribute the money as dividends at the time they are earned.

Of course, the White House wants everyone to know that this new rate would apply only to those filthy rich individuals who make $200,000 a year, or $250,000 if you're a greedy couple. We're all supposed to believe that no one would be hurt other than rich folks who can afford it.

The truth is that the plan gives new meaning to the term collateral damage, because shareholders of all incomes will share the pain. Here's why. Historical experience indicates that corporate dividend payouts are highly sensitive to the dividend tax. Dividends fell out of favor in the 1990s when the dividend tax rate was roughly twice the rate of capital gains.

When the rate fell to 15% on January 1, 2003, dividends reported on tax returns nearly doubled to $196 billion from $103 billion the year before the tax cut. By 2006 dividend income had grown to nearly $337 billion, more than three times the pre-tax cut level. The nearby chart shows the trend.

Shortly after the rate cut, Microsoft, which had never paid a dividend, distributed $32 billion of its retained earnings in a special dividend of $3 per share. According to a Cato Institute study, 22 S&P 500 companies that didn't pay dividends before the tax cut began paying them in 2003 and 2004.

As former Citigroup CEO Sandy Weill explained at the time: "The recent change in the tax law levels the playing field between dividends and share repurchases as a means to return capital to shareholders. This substantial increase in our dividend will be part of our effort to reallocate capital to dividends and reduce share repurchases."

And that's what happened. An American Economic Association study by University of California at Berkeley economists Raj Chetty and Emmanuel Saez examined dividend payouts by firms and concluded that "the tax reform played a significant role in the [2003 and 2004] increase in dividend payouts." They also found that the incentive for firms to pay dividends rather than sit on cash helped "reshuffle" capital from lower growth firms to "ventures with greater expected value," thus increasing capital-market efficiency.

If you reverse the policy, you reverse the incentives. The tripling of the dividend tax will have a dampening effect on these payments.

Who would get hurt? IRS data show that retirees and near-retirees who depend on dividend income would be hit especially hard. Almost three of four dividend payments go to those over the age of 55, and more than half go to those older than 65, according to IRS data.

But all American shareholders would lose. Higher dividend and capital gains taxes make stocks less valuable. A share of stock is worth the discounted present value of the future earnings stream after taxes. Stock prices would fall over time to adjust to the new after-tax rate of return. And if investors become convinced later this year that dividend and capital gains taxes are going way up on January 1, some investors are likely to sell shares ahead of paying these higher rates.

The question is how this helps anyone. According to the Investment Company Institute, about 51% of adults own stock directly or through mutual funds, which is more than 100 million shareholders. Tens of millions more own stocks through pension funds. Why would the White House endorse a policy that will make these households poorer?

Seldom has there been a clearer example of a policy that is supposed to soak the rich but will drench almost all American families.

Copyright 2012 Dow Jones & Company, Inc. All Rights Reserved

UK raises tax rate 50%, revenue goes down...

Anyone surprised? You shouldn't be. The same would happen in the US. Until tax loopholes are closed, all raising taxes does is squeeze those who can't afford to exploit the loopholes. Read the original here.

50p tax rate 'failing to boost revenues’via UK Telegraph
By Robert Winnett, and James Kirkup
10:58PM GMT 21 Feb 2012

A Treasury source said the relatively poor revenues from self-assessment returns was partly down to highly-paid individuals arranging their affairs to avoid paying the 50p rate.

“It’s true that SA revenues are a bit disappointing — it’s still early, but it looks like there’s been quite a lot of forestalling and other manoeuvring to avoid the top rate,” said the source.

However, another Treasury source added that the tax deadline had been extended by two days because of industrial action at HM Revenue and Customs. Therefore, it was too early to begin assessing the revenues raised from the 50p rate of tax because about 20 per cent of self-assessment tax is paid in the hours before the deadline.

Francesca Lagerberg, head of tax at Grant Thornton, an accountancy firm, said: “My guess is that because the 50 per cent rate was flagged up in advance many taxpayers, particularly those with their own businesses, decided to extract dividends ahead of the change. It highlights the fact that high tax rates don’t always deliver high tax revenues.”

George Osborne, the Chancellor, is expected to receive a definitive analysis from the revenue on the 50p rate before next month’s Budget. The Liberal Democrats have insisted that it must stay because it is important to demonstrate that the rich are paying their fair share.

David Laws, a Lib Dem MP, has also suggested reducing tax relief on pensions for top earners.

The prospect of higher taxation on pensions comes as savers complain that low interest rates and quantitative easing have pushed down returns on savings and pensions.

Charlie Bean, the deputy governor of the Bank of England, last night insisted that those people should accept the pain as the price of restoring the wider economy to health.

The Confederation of British Industry, in its Budget submission today, urges ministers not introduce new levies on the rich, warning that the UK “will become a less attractive location for entrepreneurs and key employees”.

I need their accountant

Read the original here.

GE Filed 57,000-Page Tax Return, Paid No Taxes on $14 Billion in Profits
1:11 PM, NOV 17, 2011 • BY JOHN MCCORMACK

General Electric, one of the largest corporations in America, filed a whopping 57,000-page federal tax return earlier this year but didn't pay taxes on $14 billion in profits. The return, which was filed electronically, would have been 19 feet high if printed out and stacked.

The fact that GE paid no taxes in 2010 was widely reported earlier this year, but the size of its tax return first came to light when House budget committee chairman Paul Ryan (R, Wisc.) made the case for corporate tax reform at a recent townhall meeting. "GE was able to utilize all of these various loopholes, all of these various deductions--it's legal," Ryan said. Nine billion dollars of GE's profits came overseas, outside the jurisdiction of U.S. tax law. GE wasn't taxed on $5 billion in U.S. profits because it utilized numerous deductions and tax credits, including tax breaks for investments in low-income housing, green energy, research and development, as well as depreciation of property.

"I asked the GE tax officer, 'How long was your tax form?'" Ryan said. "He said, 'Well, we file electronically, we don't measure in pages.'" Ryan asked for an estimate, which came back at a stunning 57,000 pages. When Ryan relayed the story at the townhall meeting in Janesville, there were audible gasps from the crowd.

Ken Kies, a tax lawyer who represents GE, confirmed to THE WEEKLY STANDARD the tax return would have been 57,000 pages had it been filed on paper. The size of GE's tax return has more than doubled in the last five years.

Ryan used the data point to underscore the irrationality of the corporate income tax code. He also contrasted GE with UPS to make the point that the corporate income tax code doesn't make sense. "UPS paid a 34 percent effective tax rate," while its biggest foreign competitor, DHL, paid a 24 percent tax rate, Ryan said.

The problems with the corporate taxes occur because "Republicans and Democrats, both parties, sit in Congress and they're picking winners and losers," Ryan said. The solution, according to the Wisconsin congressman: "Get rid of those loopholes and lower tax rates by a corresponding amount. Don't lose revenue, but for every loophole you pull out, and deny a company from being able to get this little carveout, you can lower the rates so we can be more competitive with our competitors overseas. We want to stem the bleeding of jobs going overseas, of foreign companies buying U.S. companies and taking headquarters overseas."

Ryan is hopeful that President Obama will work with Republicans on corporate tax reform. "This is the one thing I think we've got some bipartisan agreement on," he said.

Update: GE responds.
GE's Tax Return, Cont.
4:27 PM, NOV 17, 2011 • BY JOHN MCCORMACK
GE director of media relations Andrew Williams emails in response to this story:

We agree with Congressman Ryan that the U.S. tax system needs to be reformed and all loopholes should be closed. Furthermore, Congress needs to lower the corporate rate and provide the US a territorial system like every other major country in the world.

Here are the facts around our taxes. GE paid almost $2.7 billion of income taxes to governments around the world during 2010 including payment of substantial income taxes to the US government for prior years. GE paid income taxes for our 2010 return. GE also paid more than $1 billion in other federal, state and local taxes in the U.S. in 2010. The main reason why GE’s tax rate was so low in 2010 was that we lost billions of dollars in GE Capital as a result of the global financial crisis.

Williams's claim that GE "paid income taxes for our 2010 return" is contrary to reports in March the New York Times and ABC, which stated that GE paid no federal income taxes and actually received a $3.2 billion tax benefit. Williams points out that the New York Times reported in August what GE's tax benefit means:

Wait, there's a federal "Christmas Tree Promotion Board"??

And your tax money is paying for it. Bet you didn't hear about this on the news.  Read the original here.

Obama Couldn’t Wait: His New Christmas Tree Tax
David S. Addington
November 8, 2011 at 6:15 pm

President Obama’s Agriculture Department today announced that it will impose a new 15-cent charge on all fresh Christmas trees—the Christmas Tree Tax—to support a new Federal program to improve the image and marketing of Christmas trees.

In the Federal Register of November 8, 2011, Acting Administrator of Agricultural Marketing David R. Shipman announced that the Secretary of Agriculture will appoint a Christmas Tree Promotion Board. The purpose of the Board is to run a “program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry’s position in the marketplace; maintain and expend existing markets for Christmas trees; and to carry out programs, plans, and projects designed to provide maximum benefits to the Christmas tree industry” (7 CFR 1214.46(n)). And the program of “information” is to include efforts to “enhance the image of Christmas trees and the Christmas tree industry in the United States” (7 CFR 1214.10).

To pay for the new Federal Christmas tree image improvement and marketing program, the Department of Agriculture imposed a 15-cent fee on all sales of fresh Christmas trees by sellers of more than 500 trees per year (7 CFR 1214.52). And, of course, the Christmas tree sellers are free to pass along the 15-cent Federal fee to consumers who buy their Christmas trees.

Acting Administrator Shipman had the temerity to say the 15-cent mandatory Christmas tree fee “is not a tax nor does it yield revenue for the Federal government” (76 CFR 69102). The Federal government mandates that the Christmas tree sellers pay the 15-cents per tree, whether they want to or not. The Federal government directs that the revenue generated by the 15-cent fee goes to the Board appointed by the Secretary of Agriculture to carry out the Christmas tree program established by the Secretary of Agriculture. Mr. President, that’s a new 15-cent tax to pay for a Federal program to improve the image and marketing of Christmas trees.

Nobody is saying President Obama doesn’t have authority to impose his new Christmas Tree Tax — his Administration cites the Commodity Promotion, Research and Information Act of 1996. Just because the Obama Administration has the legal power to impose its Christmas Tree Tax doesn’t mean it should do so.

The economy is barely growing and nine percent of the American people have no jobs. Is a new tax on Christmas trees the best President Obama can do?

And, by the way, the American Christmas tree has a great image that doesn’t need any help from the government.

Use Debit Cards? Prepare for fees (surprise!)

Read the original here.

Remember the “Durbin Fee” while using your debit cards
POSTED AT 10:45 AM ON OCTOBER 3, 2011 BY ED MORRISSEY
Government imposes new price controls on an industry. Industry raises prices elsewhere to make up for the artificial cap on cost recovery. Government expresses shock, shock at the development. For those of us old enough to remember the 1970s, this seems like deja vu all over again, as Yogi Berra once said. For those either too young or too “dim,” as the Washington Examiner puts it, the surprise should be a learning experience, even for a “dim bulb” like Dick Durbin:


During the debate over the Dodd-Frank financial reform bill, when Democrats controlled Congress, Durbin insisted on including an amendment that had nothing to do with Dodd-Frank’s stated aims of stable banks and consumer protections. The Durbin amendment granted regulators the authority to establish price controls on what banks could charge merchants that accepted their customers’ debit cards as payment. The resulting regulations, which took effect Oct. 1, limit what banks can charge merchants to no more than 24 cents per debit card transaction.

Critics pointed out that banks, facing $6 billion annual losses from this change, would shift the costs of debit cards from merchants to bank customers. Sure enough, Bank of America and several of its largest competitors — including Wells Fargo, PNC, HSBC, SunTrust, TDBank, and Chase — will be imposing various new fees on their customers to make up for Durbin’s folly.

Congress set the cap not because it understands the costs and risks involved in issuing debit cards to consumers, but because they thought they knew better than the competitive market what constituted a “fair” price. Until Congress intervened, retailers paid the costs of the debit cards, which made sense since it made it a lot more convenient for their customers to make purchases. It also all but eliminated the use of checks at retail stores, which greatly reduced the risk that retailers had to make in parting with services or goods. That made debit cards a good deal for retailers, and the reduced risks kept consumers from paying more at the register.

Now, however, Congress has forced banks to shift a good portion of those costs back to the consumers instead. Every bank will have to make that adjustment, since none of them are in business to lose money, and their stockholders expect the best return possible on their investment. But for some reason, Durbin still doesn’t understand how a P&L statement works:


“Bank of America is trying to find new ways to pad their profits by sticking it to its customers,” Durbin said in a petulant statement released this week. This might almost pass the laugh test, if not for the fact that every bank is adjusting to Durbin’s dumb law in nearly the same way. …

Durbin shrugged off such warnings, suggesting that those who disagreed with him were motivated by greed and “on the side of Wall Street banks and credit card companies.” He absurdly claimed that the debit card fee cut would help to prevent banks “up on Wall Street” from causing another financial crisis — a non sequitur so completely disingenuous that it can only be called a lie.

It could also be called gross ignorance, or possibly even both. Price controls distort markets in exactly this manner. Retailers may have griped about the fees, but they could have easily refused to accept debit cards and insisted on checks or cash to conduct their business. Instead of allowing the market to work, government interfered on behalf of one set of stakeholders without having any idea what the obvious and predictable consequences would be. The only people shocked, shockedat the distortion that resulted are indeed great candidates for the Dim Bulbs of the Year.

Who pays taxes?

You always wonder why rich people harp that taxes should be raised. Must be nice to afford lawyers who can give you tax avoidance, regardless of the rate. If they really wanted to put their money where their mouth is, cut a check. At least Ben Affleck was honest in why he didn't want to: "I'm not Jesus Christ of the tax code. I can't completely martyr myself." Now, if only they didn't expect everyone else to be. Read the original here at RWN.

Let’s Call It ‘The American Class Warfare Package’
Written By : Kathleen McKinley

So, Obama’s new plan is the old plan. He hasn’t changed his tune since he told Joe The Plumber that we need to “spread the wealth around.”

From the AP:

President Barack Obama called for $1.5 trillion in new taxes Monday, part of a total 10-year deficit reduction package totaling more than $3 trillion.

Obama said, “It’s only right we ask everyone to pay their fair share,”

Really? Because 47% of Americans pay NO federal income tax and “the rich” (top 1%) pay about 40% of all income taxes into the federal government. So, who isn’t paying their fair share? To me a flat tax is the only way to go. Everyone should have “skin in the game,” as Obama likes to say, even if it’s a tiny bit. We all need to be a part of the solution to our fiscal mess. This would be the fair way. The rich would pay a great deal more, so the class warfare guys would be happy, and everyone would pay at least a little bit, which would be fair all around.

But Obama wants to make this about class warfare. He seems to be using the third richest man in the country to do it.

Warren E. Buffett was his usual folksy self Tuesday night at a fundraiser for Sen. Hillary Rodham Clinton (D-N.Y.) as he slammed a system that allows the very rich to pay taxes at a lower rate than the middle class.

Buffett cited himself, the third-richest person in the world, as an example. Last year, Buffett said, he was taxed at 17.7 percent on his taxable income of more than $46 million. His receptionist was taxed at about 30 percent.

You will be hearing the Buffett/Secretary line over and over. Trust me on that. But, as usual, it doesn’t tell the whole story. Greg Makiw, a professor of economics at Harvard, tells the rest of it:

You might wonder how Mr Buffett managed such a low tax rate. Most likely, it arose because corporate dividends and capital gains are taxed at only 15 percent. But the corporate income that funded those returns was already taxed at the corporate level, where the tax rate is 35 percent. Mr Buffett seems to be ignoring the first round of taxation. Is it possible that the world’s most successful has failed to pierce the corporate veil? (If you want to more reliable data on the progressivity of the tax code, see this old post for numbers from the CBO.)

Even more striking to me is a fact that Mr Buffett did not emphasize: how low his taxable income is. His income of $46 million represents a mere 0.1 percent of his reported net worth of over $50 billion. That is not an impressive rate of return!

Why is it so low? I can think of at least four possible ways investors like Mr Buffet can keep their taxable income, as opposed to their true income, low:
They hold stocks that pay minimal dividends.
They avoid realizing capital gains.
They hold some of their portfolios in tax-free municipal bonds.
They give appreciated assets to charity, getting a deduction for the current market value without ever having to realize and pay tax on the capital gain.
Notice that raising tax rates, as Mr Buffett seems to want to do, would not much affect any of these tax avoidance strategies. Even if tax rates were raised substantially, the tax savvy Mr Buffet probably wouldn’t be paying much in taxes as a proportion of his wealth or as a proportion of his true income.

And the last line is the kicker. Even hypocrites like Mr. Buffet use tax avoidance strategies. When Mr. Buffett writes a check for a few billion to the government out his $50 billion out of the goodness of his heart, instead of hiring lawyers to lower that bill, I can’t take him seriously.

The insane thing about all this is that at time we need jobs, all Obama is talking about is raising taxes.

Mitt Romney sent out this statement and it hits the nail on the head:

“President Obama’s plan to raise taxes will have a crushing impact on economic growth. Higher taxes mean fewer jobs – it’s that simple. This is yet another indication that President Obama has no clue how to bring our economy back. I encourage President Obama to look at my detailed economic plan to create long-term growth and prosperity for our nation. The only way to get our economy moving again is to elect a president who understands how to create jobs and rein in spending – that is why I am running.”

Rising Taxes

Read the original here.

Obama to propose $1.5 trillion in new tax revenue
By JIM KUHNHENN
Associated Press

WASHINGTON (AP) -- President Barack Obama will propose $1.5 trillion in new taxes as part of a plan to identify more than $3 trillion in long-term deficit reduction and slow the nation's escalating national debt.

Obama's tax plan is aimed predominantly at the wealthy and draws sharp contrasts with congressional Republicans.

It comes just days after House Speaker John Boehner ruled out tax increases to lower deficits. It also comes amid a clamor in his own Democratic Party for Obama to take a tougher stance against Republicans. And while the plan stands little chance of passing Congress, its populist pitch is one that the White House believes the public can support.

The core of the president's plan totals just more than $2 trillion in deficit reduction over 10 years. It combines the new taxes with $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare.

The administration also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.

The deficit reduction plan represents an economic bookend to the $447 billion in tax cuts and new public works spending that Obama has proposed as a short-term measure to stimulate the economy and create jobs. He's submitting his deficit fighting plan to a special joint committee of Congress that is charged with recommending deficit reductions of up to $1.5 trillion over 10 years.

In a defiant note, administration officials made clear Sunday that Obama would veto any Medicare benefit cuts that aren't paired with tax increases on upper-income people.

Officials cast Obama's plan as his vision for deficit reduction, and distinguished it from the negotiations he had with Boehner in July as Obama sought to avoid a government default.

As a result, it includes no changes in Social Security and no increase in the Medicare eligibility age, which the president had been willing to accept this summer.

Moreover, the new tax revenue Obama is seeking is nearly double the $800 billion that Boehner had been willing to consider in July. Republicans were already lining up against the president's tax proposal before they even knew the magnitude of what he intended to recommend.

"Class warfare may make for really good politics but it makes for rotten economics," GOP Rep. Paul Ryan of Wisconsin, the House Budget Committee chairman, said Sunday in reaction to one Obama tax proposal to impose a minimum tax rate on wealthy filers.

Former President Bill Clinton on Monday dismissed GOP claims that the tax on the wealthy would discourage jobs creation and hamper economic growth.

"Republicans in Washington always say the same thing," Clinton said on NBC's "Today" show. He called their argument an insult to wealthy Americans, including many who don't mind paying more.

Key features of Obama's plan, as described by senior administration officials Sunday evening:

-$1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.

-$580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Other mandatory benefit programs include farm subsidies.

-$430 billion in savings from lower interest payment on the national debt.

By adding about $1 trillion in spending cuts already enacted by Congress and counting about $1 trillion in savings from the drawdown of military forces from Iraq and Afghanistan, the combined deficit reduction would total more than $4 trillion over 10 years, senior administration officials said.

Republicans have ridiculed the war savings as gimmicky, but House Republicans included them in their budget proposal this year and Boehner had agreed to count them as savings during debt ceiling negotiations with the president this summer.

Obama backed away from proposing sweeping changes to Medicare, following the advice of fellow Democrats that it would only give political cover to a privatization plan supported by House Republicans that turned to be unpopular with older Americans.

Administration officials said 90 percent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers. The plan does shift some additional costs to beneficiaries, but those changes would not start until 2017.

Illustrating Obama's populist pitch on tax revenue, one proposal would set a minimum tax on taxpayers making $1 million or more in income. The measure - Obama is going to call it the "Buffett Rule" for billionaire investor Warren Buffett - is designed to prevent millionaires from taking advantage of lower tax rates on investment earnings than what middle-income taxpayers pay on their wages.

At issue is the difference between a taxpayer's tax bracket and the effective tax rate that taxpayer pays. Millionaires face a 35 percent tax bracket, while middle income filers fall in the 15 or 25 percent bracket. But investment income is taxed at 15 percent and Buffett has complained that he and other wealthy people have been "coddled long enough" and shouldn't be paying a smaller share of their income in federal taxes than middle-class taxpayers.

---

Associated Press writer Ricardo Alonso-Zaldivar contributed to this report.

Congressional Dems push for Internet Sales Tax

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Democrats Turn To Online Sales Tax For New Revenues Following Debt Battle

While the nation was captivated by the debt crisis – and whether tax increases would be part of any deal to reduce federal deficits – a group of Democratic senators and congressmen have rolled out legislation that would raise new revenues by targeting online sales from retailers like Wal-Mart and Best Buy.

These lawmakers say that states are losing billions in uncollected state and local sales tax on Internet sales and are touting the support of online retailers like Amazon who say they’re fine with an across-the-board system that would make tax collections simple.

But small businesses say the new legislation is unfair and puts them at a cost disadvantage at a time when they can least afford it.

The bill introduced by Sen. Dick Durbin, D-Ill., last week called the Main Street Fairness Act, has drawn support from several Democrats, including Sens. Tim Johnson of South Dakota, Jack Reed of Rhode Island, Reps. John Conyers of Michigan, Peter Welch of Vermont and Heath Shuler of North Carolina.

“Consumers shouldn’t have to face the burden of reporting all of their online purchases. Main Street retailers collect sales taxes on behalf of consumers, why shouldn’t online retailers do the same,” Durbin said in a statement Friday.

Durbin noted that states are expected to lose up to $24 billion in uncollected state and local taxes this year on Internet and catalog sales.

“This bill will level the playing field for local businesses, by ensuring that online retailers collect the same sales taxes that brick-and-mortar retailers already do,” Conyers said. “This will help our state and local governments avoid devastating layoffs and cuts to essential services vital to the well-being of our local communities.”

But several tech groups strongly oppose the bill.

“Congress often says that small businesses are the backbone of the economic recovery, but these new collection costs will break the backs of many small online businesses,” said Steve, DelBianco, executive director of NetChoice, a tech trade group.

“It’s a cruel irony to call this job-killing bill the ‘Main Street Fairness Act,’” DelBianco added. “Online sales are about the only way small retailers can survive being steamrolled by the big-box chains who are behind this bill.”

Retailers are only required to collect sales tax in states where they also have a physical presence under a 1992 Supreme Court ruling known as the Quill decision. The high court ruled that a sales tax on out-of-state sellers would be an unconstitutional burden on interstate commerce because of the complexity of states’ and municipalities’ sales tax rules.

That means out-of-state retailers can offer their customers a discount online, but consumers have to report the sales tax owed on online purchases on their tax returns.

In response to the Quill decision, 44 states and the District of Columbia are working with local governments and the business community to adopt a sweeping interstate system to simplify their sales tax rules and administrative requirements, called the Streamlined Sales and Use Tax Agreement. So far, 24 states have changed their laws in compliance with this interstate agreement.

But the Quill decision said Congress would have to authorize such an agreement, which supporters say the bill does.

Amazon.com Inc., the largest online Internet retailer, threw its support behind the bill.

“Amazon.com has long supported a simple, nationwide system of state and local sales tax collection, evenhandedly applied to all sellers, no matter their business model, location, or level of remote sales,” Paul Misener, vice president of Amazon’s global public policy, said in a letter to Durbin that the Illinois senator included in a press release.

“To this end, I am writing to thank you for your bill that would allow states that sufficiently simplify their rules to require collection of sales tax by out-of-state sellers,” he wrote.

The Retail Industry Leaders Association, which represents more than 200 retailers, also supports the bill, saying it would end special treatment for online-only retailers and relieve consumers of the tax-reporting requirement.

“For too long, U.S. tax policy has favored online-only retailers over the brick-and-mortar stores that creates the jobs and serves our communities,” said Katherine Lugar, a spokeswoman for the association.

“Government shouldn’t be picking winners and losers by giving a handful of companies a competitive advantage over everyone else,” he said. “It’s time to close this decades-old loophole and level the playing field for all retailers.”

But the Computer and Communications Industry Association opposes the bill, saying that taxing small Internet businesses with the most potential for economic growth is unfair.

“E-commerce has enabled businesses to broaden the scope of their activities beyond traditional geographical limitations,” said Ed Black, president and CEO of CCIA. “Sadly, this bill seeks to re-impose onto e-commerce businesses the very burdens that innovation has enabled them to overcome, and has given them a chance for success.”

Read more: http://www.foxnews.com/politics/2011/08/03/with-spending-cuts-only-deal-passed-dems-seek-new-revenues-in-online-sales/#ixzz1TzX4UirB

Umm...can they do this?

I don't know what's worse, that this has never happened before and now is, or that I'm not sure they can make this guarantee, but they are. Read the original here.

Obama To Banks: We're Not Defaulting

While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn't raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.

In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn't raised by the August 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders. Geithner made the rounds on the Sunday talk shows saying a default is imminent if the debt ceiling isn't raised, and President Obama issued a similar warning during a Friday press conference after budget negotiations with House Republicans broke down.

While the negotiations to craft a budget remain at an impasse, Republicans and Democrats on Monday began crafting their own plans to cut spending that could lead to an agreement to raise the debt ceiling. It's unclear if a broad agreement can be reached any time soon, but even if a deal is struck, a complicating issue for lawmakers and the administration is the possibility of a downgrade to the US debt rating, which would cut the triple-A rating on the nation's debt to a lower level.

Major ratings firms -- namely Standard & Poor's and Moody's -- have said even if the country raises the debt ceiling and doesn't default, there's a strong likelihood that the triple-A bond rating will be cut to double-A unless a budget can be crafted that results in $4 trillion in savings, the result of the massive debt load the country has accumulated in recent years. The nation's outstanding debt is more than $14 trillion.

A senior banking official told FOX Business that administration officials have provided guidance to them that even though a default is off the table, a downgrade "is a real possibility for no other reason than S&P and Moody's have to cover (themselves) since they've been speaking out on the debt cap so much."

This guidance is a big reason why Wall Street has largely dismissed the possibility of default, and though the markets have been jittery amid the talk of default, they haven't imploded as would be the case, many economists fear, if the nation missed a payment on its debt.

The banking official said the administration understands that if there were to be a default, it would likely spark another financial crisis.

"They also know they can pay the debt with cash on hand," this official told FOX Business. The Treasury collects around $2 trillion in tax revenues, and is scheduled to pay out $200 billion in interest to bond holders. In order to meet its obligations to contractors, social security recipients and others, the administration would have to raise another $1 trillion either through cuts, higher tax revenues, the issuance of debt or a combination of all three.

Congressional Republicans believe that the Administration is raising the possibility of a default as a way to ramp up pressure on Republicans to agree to a budget deal that includes tax increases, which they oppose.

A Treasury spokesman said that "when we exhaust our borrowing authority, as we will on August 2nd, there is no way to guarantee that we will be able to pay all of our bills. Any suggestion to the contrary is simply false."

Even without a default, banks expect some market turbulence if the triple-A sovereign-debt rating is cut, sources tell FOX Business. While bank officials do not believe there will be a “catastrophic” effect to a downgrade, that’s not to say there won’t be negative ripple effects, notably to bond deals and derivatives priced off triple-A-rated Treasurys.

Read more: http://www.foxbusiness.com/markets/2011/07/25/obama-to-banks-were-not-defaulting/#ixzz1TJJBFoUq

Debt Crisis Talks update...no real update

Read the original here.

Obama Kills Bipartisan Deal, Then Reid Resorts To Smoke And Mirrors - Right Turn
Jennifer Rubin - Washington Post

As I reported earlier, the president rejected a bipartisan congressional deal that would have calmed the markets, resolved the debt-ceiling crisis and restored faith in Washington politicians. President Obama was having none of it, demonstrating once and for all that the problem is NOT the House Republicans, but the election-obsessed White House.

So then the parties begin to devise separate congressional plans. The Post reports, “Senate Democrats are preparing to introduce legislation that would avert a national default on Aug. 2 and achieve $2.7 trillion in deficit savings over the next decade without raising taxes.”

But Senate Majority Leader Harry Reid is devising a sham that will never pass muster in the House. A Capitol Hill source with knowledge of the plan tells me: “It includes $1.2 trillion in OCO [Overseas Contingency Operations] savings . . . which was assumed anyway, $1.2 trillion (over $1.1 trillion less than [Majority Leader Eric] Cantor identified in the Biden talks) and $300 billion in interest savings.” A Senate aide says dryly that Reid “has about a trillion in ‘savings’ from ending the war in Iraq that’s already going to end.” And a disgusted House adviser bluntly tells me that Reid’s plan “isn’t real.”

We shouldn’t be too harsh on Reid. HE DID reach a bipartisan deal with the House. But the president squashed it. (Note to Congress: Next time don’t ask, just pass it and leave town.) Now we are back to gamesmanship.

It is extremely telling, however, that Reid’s plan contains NO tax hike. As I suspected, Obama doesn’t have enough support even in his own party (and particularly from Senate Democrats facing reelection) to pass the massive tax increases that he and his liberal base demand. And yet Obama at the last minute in negotiations with the speaker of the House last week threw in $400 billion in more taxes. There could only have been one purpose for that, since the Senate is as tax-hike-averse as the House: to create a crisis. We have finally found the president’s strong suit.

More on this topic in PostOpinions

Democratic Rep: Debt Crisis Has Been ‘Manufactured By House Republicans’

Question 1. Do Democrats just say whatever they want and see what sticks in the media? Question 2. How'd spending that $800,000,000,000 work out? 

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Democratic Rep: Debt Crisis Has Been ‘Manufactured By House Republicans’

(CNSNews.com) – Rep. Barbara Lee (D-Calif.) released a statement Monday saying the “debt crisis” has been “manufactured by House Republicans” who are “attempting to advance an extremist agenda.”

“The current, so-called ‘debt crisis’ has been completely manufactured by House Republicans attempting to advance an extremist agenda. This should be a simple vote to allow the US Treasury to fund all of the programs and obligations of the entire federal government that are already in the law,” said Rep. Lee in a statement handed out to reporters before a Democratic press conference on jobs at the Capitol.

Rep. Lee has called for Congress to increase the debt limit with no strings attached like spending cuts.

“Enough is enough,” she said. “We should immediately pass a clean bill to raise the debt ceiling so that we can work on the real crisis in this country – the jobs crisis.”Congressional leaders are currently working on a deal to increase the debt limit – currently at $14.3 trillion – by the Aug. 2 deadline

Washington Times on POTUS & the Debt Crisis

Read the original here. They get right to the point.

CURL: Is Obama A Pathological Liar?
The Washington Times
ANALYSIS/OPINION:

“Mendacity is a system that we live in.”

- Brick, “Cat on a Hot Tin Roof”

In the weird world that is Washington, men and women say things daily, hourly, even minutely, that they know deep down are simply not true. Inside the Beltway, we all call those utterances “rhetoric.”

But across the rest of the country, plain ol’ folk call ‘em lies. Bald-faced (even bold-faced) lies. Those folks have a tried-and-true way of determining a lie: If you know what you’re saying is patently false, then it’s a lie. Simple.

And lately, the president has been lying so much that his pants could burst into flames at any moment.

His late-evening news conference Friday was a tour de force of flat-out, unadulterated mendacity — and we’ve gotten a first-hand insider’s view of the president’s long list of lies.

“I wanted to give you an update on the current situation around the debt ceiling,” Mr. Obama said at 6:06 p.m. OK, that wasn’t a lie — but just about everything he said after it was, and he knows it.

“I just got a call about a half-hour ago from Speaker [John A.] Boehner, who indicated that he was going to be walking away from the negotiations,” he said.

Not so: “The White House made offers during the negotiations,” said our insider, a person intimately involved in the negotiations, “and then backtracked on those offers after they got heat from Democrats on Capitol Hill. The White House, and its steadfast refusal to follow through on its rhetoric in terms of cutting spending and addressing entitlements, is the real reason that debt talks broke down.”

Mr. Boehner was more blunt in his own news conference: “The discussions we’ve had with the White House have broken down for two reasons. First, they insisted on raising taxes. … Secondly, they refused to get serious about cutting spending and making the tough choices that are facing our country on entitlement reform.”

But back to the lying liar and the lies he told Friday. “You had a bipartisan group of senators, including Republicans who are in leadership in the Senate, calling for what effectively was about $2 trillion above the Republican baseline that theyve been working off of. What we said was give us $1.2 trillion in additional revenues,” Mr. Obama said.

That, too, was a lie. “The White House had already agreed to a lower revenue number — to be generated through economic growth and a more efficient tax code — and then it tried to change the terms of the deal after taking heat from Democrats on Capitol Hill,” our insider said.

The negotiations just before breakdown called for $800 billion in new “revenues” (henceforth, we’ll call those “taxes”), but after the supposedly bipartisan plan came out — and bowing to the powerful liberal bloc on Capitol Hill — Mr. Obama demanded another $400 billion in new taxes: a 50 percent increase.

Mr. Boehner was blunt: “The White House moved the goalpost. There was an agreement, some additional revenues, until yesterday, when the president demanded $400 billion more, which was going to be nothing more than a tax increase on the American people.”

But Mr. Obama, with a straight face, continued. “We then offered an additional $650 billion in cuts to entitlement programs — Medicare, Medicaid, Social Security.”

The truth: “Actually, the White House was walking back its commitments on entitlement reforms, too. They kept saying they wanted to ‘go big.’ But their actions never matched their rhetoric,” the insider said.

Now, Mr. Boehner and the real leaders in Congress have taken back the process. He’ll write the bill and pass it along to the president, with this directive, which he reportedly said to Mr. Obama’s face in a short White House meeting Saturday: “Congress writes the laws and you get to decide what you want to sign.”

Watching the one-third-of-a-term-senator-turned-president negotiate brings to mind a child spinning yarns about just how the living room lamp got broken. Now, though, the grown-ups are in charge; the kids have been put to bed. Ten days ago, the president warned the speaker: “Dont call my bluff.”

Well, Mr. Boehner has. He’s holding all the cards — and he’s not bluffing.

• Joseph Curl covered the White House and politics for a decade for The Washington Times. He can be reached at jcurl@washingtontimes.com.

© Copyright 2011 The Washington Times, LLC. Click here for reprint permission.

Who is pressing the Debt crisis?

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White House Stokes Debt-Ceiling Crisis - Right Turnby Jennifer Rubin - Washington Post

A Republican aide e-mails me: “The Speaker, Sen. Reid and Sen. McConnell all agreed on the general framework of a two-part plan. A short-term increase (with cuts greater than the increase), combined with a committee to find long-term savings before the rest of the increase would be considered. Sen. Reid took the bipartisan plan to the White House and the President said no.”

If this is accurate the president is playing with fire. By halting a bipartisan deal he imperils the country’s finances and can rightly be accused of putting partisanship above all else. The ONLY reason to reject a short-term, two-step deal embraced by both the House and Senate is to avoid another approval-killing face-off for President Obama before the election. Next to pulling troops out of Afghanistan to fit the election calendar, this is the most irresponsible and shameful move of his presidency.

As for the House, why not pass the deal that Sen. Harry Reid agreed to, send it to the Senate and leave town? Enough already.

Jobs, Jobs, Jobs....not as a Government beauracrat...

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Private Sector Job Creation Ground To A Halt Almost Instantly After Obamacare Passed « Hot Air

A new report out yesterday from The Heritage Foundation shows private sector job creation dropped dramatically almost immediately after President Barack Obama signed the Patient Protection and Affordable Care Act (a.k.a. Obamacare) into law.

From the recession’s low point in January 2009 until April 2010, when Obamacare went into effect, the private sector created about 67,600 jobs a month. After the president signed PPACA into law, that number slowed to a meager 6,400 jobs a month — a more than 90 percent decrease or less than one-tenth the previous rate.



As the report states, correlation cannot prove causation — but the change in course is statistically measurable and testing reveals a structural break between April and May of 2010. Moreover, small-business owners have said Obamacare is a deterrent to hiring. Take Scott Womack, the owner of 12 IHOP restaurants in Indiana and Ohio, as just one example. Before Obamacare became law, he had development plans in Ohio. Now, he’s worried he won’t be able to carry out his original plans unless Obamacare is repealed. Those restaurants he planned to open would provide jobs not only for his future employees, but also for everyone involved in the construction of the restaurant buildings themselves.

As the Heritage report explains, Obamacare discourages hiring in three important ways:

Businesses with fewer than 50 workers have a strong incentive to maintain this size, which allows them to avoid the mandate to provide government-approved health coverage or face a penalty;
Businesses with more than 50 workers will see their costs for health coverage rise—they must purchase more expensive government-approved insurance or pay a penalty; and
Employers face considerable uncertainty about what constitutes qualifying health coverage and what it will cost. They also do not know what the health care market or their health care costs will look like in four years. This makes planning for the future difficult.

Democrats once touted that Obamacare would create jobs, but the data underscore the reality that that’s not true for the private sector. The only jobs Obamacare created were within the new agencies and layers of bureaucracy the law added to the federal government.

The Heritage report recommends repeal — and comes as a welcome reminder that the health care law can’t be ignored as the president and Congress attempt to address the debt and deficit or as the nation attempts to right the still-struggling economy. Nor can it be ignored in the upcoming presidential election. Likely U.S. voters have said jobs and the economy are their No. 1 issue. That means the repeal of Obamacare should be a top priority, too.

One of the first acts of the new House at the beginning of this year was to pass a repeal bill, but, of course, that bill was blocked in the Senate and definitely didn’t receive the president’s signature. Still, repeal is possible — but it will require the election of a president who will sign a repeal bill in 2012. That puts all the GOP presidential contenders in perspective. Even Mitt Romney, the architect of Obamneycare (Tim Pawlenty’s one pitch-perfect zing), has said he’d support repeal — and, whatever skeptics might say, he’s surely more likely to sign his name to repeal than Obama is. When the GOP does pick its candidate, voters concerned about Obamacare’s impact on jobs and the economy surely can get behind whoever the candidate is.

Otherwise, the country faces more of the same. Another Heritage report out recently showed jobs recovery will take far longer than most expect under any circumstances. According to that report, unemployment wouldn’t return to its natural rate of 5.2 percent until 2014 even if the economy immediately started adding jobs at the rate it did during the tech bubble, which was about 265,000 jobs a month. At a more realistic rate of 176,000 jobs a month, the unemployment rate wouldn’t drop to 5.2 percent until about 2018.

Rasmussen Poll shows 55% opposed to any tax hikes

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55% Oppose Tax Hike In Debt Ceiling Deal

As the Beltway politicians try to figure out how they will raise the debt ceiling and for how long, most voters oppose including tax hikes in the deal.

Just 34% think a tax hike should be included in any legislation to raise the debt ceiling. A new Rasmussen Reports national telephone survey finds that 55% disagree and say it should not. (To see survey question wording, click here.)

There is a huge partisan divide on the question. Fifty-eight percent (58%) of Democrats want a tax hike in the deal while 82% of Republicans do not. Among those not affiliated with either major political party, 35% favor a tax hike and 51% are opposed.

Americans who earn more than $75,000 a year are evenly divided as to whether a tax hike should be included in the debt ceiling deal. Those who earn less are opposed to including tax hikes.

Voters remain very concerned about the debt ceiling issue. Sixty-nine percent (69%) believe that it would be bad for the economy if a failure to raise the debt ceiling led to government defaults. Only 6% believe it would be good for theeconomy. Fourteen percent (14%) believe it would have no impact and 11% are notsure. These figures are little changed from a few weeks ago.

At the same time, however, 52% believe it would beeven more dangerous to raise the debt ceiling without making significant cuts in government spending. Thirty-seven percent (37%) take the opposite view and believe a government default would be more dangerous.

(Want a free daily e-mail update ? If it's in the news, it's in our polls). Rasmussen Reports updates are alsoavailable on Twitter or Facebook.

The national telephone survey of 1,000 Likely Voters was conducted on July 12-13, 2011 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points witha 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted byPulse Opinion Research, LLC.See methodology.

Eighty-five percent (85%) of voters are following the debt ceiling story at least Somewhat Closely. That figure includes 48% who are following it Very Closely. Older voters are following the story more closely than younger voters.

Thirty-eightpercent (38%) believe the president has done a good or an excellent job handling the debt ceiling debate while 41% say he has done a poor job. Predictably, 74% of Democrats give him good or excellent marks while 71% of Republicans say he’s doing a poor job. Among those not affiliated with either major party, 31% give the president good or excellent marks on this topic while 42% say he’s doing a poor job.

Overall, the president’s Job Approval ratings have been remarkably stable for the past year-and-a-half. With only modest exceptions, his totalapproval numbers have stayed in the mid-to-high 40s since the end of 2009.

By a 59% to19% margin, Political Class voters favor a tax hike in the debt ceiling deal. By a 68% to 22% margin, Mainstream voters take the opposite view (for more on the Political Class-Mainstream classification, click here.

Data released earlier shows that most Americans believe tax hikes are bad for the economy and spending cuts are good.

Consumer confidence has fallen to the lowest level in twoyears and most Americans now believe their own personal finances are getting worse.

Additional information from this survey and a full demographic breakdown are available to Platinum Members only.

Please sign up for the Rasmussen Reports daily e-mail update (it’s free) or follow us on Twitter or Facebook. Let us keep you up to date with the latest public.

Quote of the Day

President Obama claims that 80% of Americans support tax hikes. Read the original here.

Obama: Public Is 'Sold' On Tax Increases In A Debt-Ceiling Deal
By Sam Youngman and Alicia M. Cohn - 07/15/11 11:54 AM ET

President Obama on Friday kept up the pressure on Republicans to agree to revenue increases in a deal to raise the debt ceiling, claiming 80 percent of the public supports Democrats' demand for tax increases.
"The American people are sold," Obama said. "The problem is members of Congress are dug in ideologically."

Throughout the press conference, Obama blasted Republicans for ignoring what he said is the will of the American people by rejecting tax increases that would balance out spending cuts in a debt package.


"This is not an issue of salesmanship to the American people," Obama said.

"I hope [Republicans are] not just listening to lobbyists and special interests ... I hope they're listening to the American people as well," Obama said, citing "poll after poll" showing Republican voters, as well as Democrats, believe in taking "a balanced approach" — including both increased revenues and spending cuts in a plan to cut the deficit.

Obama repeated his warning that the country is "running out of time" to avert a financial “Armageddon.”

"We should not even be this close on a deadline," Obama said. "This is something we should have accomplished earlier."

Obama said he is still pushing for a “big” deal to raise the debt ceiling by the Aug. 2 deadline despite the hardening of positions on Capitol Hill.

"I always have hope," Obama said. "Don't you remember my campaign?"

The president signaled he is opposed to the “Cut, Cap and Balance” proposal that House Republicans coalesced around Friday morning, and he challenged the GOP to "be ambitious" in proposing a package to cut the deficit.

"If they show me a serious plan, I'm ready to move, even if it requires some tough sacrifices on my part," Obama said.

Republicans in the House rallied Friday behind an effort to cut spending, cap spending in future years and pass a balanced-budget amendment to the Constitution.

“We asked the president to lead, we asked him to put forward a plan, not a speech — a real plan — and he hasn’t. We will,” Speaker John Boehner said (R-Ohio) before Obama’s press conference.

The plan would authorize a $2.4 trillion increase in the debt ceiling after Congress passes a balanced-budget amendment.

The president said he had not studied the new Republican proposal, but said it “doesn't sound like a serious plan to me."

Obama also shot down the GOP calls for a balanced budget amendment to the Constitution, saying "we don't need a constitutional amendment to do our jobs."

As he has done since last week, the president challenged Republicans to pursue the biggest plan possible, seizing an "opportunity to stabilize American's finances" for the next 10, 15 or 20 years.

Noting the acknowledgment by Republican leaders that the debt ceiling has to be raised, Obama said that they should not stop at the "routine" decision to increase the government's borrowing authority.

"I'm glad the congressional leaders want to raise the debt ceiling, but I think the American people expect more," Obama said.


The president has repeatedly called for the negotiators to put politics aside even as the negotiations have increasingly been framed through the lens of the 2012 election.

Obama said he was hopeful that the leaders would step back from trying to please their base constituencies and move on the debt ceiling, reducing the deficit and other economic agenda items.

"You know… whatever Sen. McConnell says about me on the floor of the Senate is not going to be impediment to us getting a deal done," Obama said. "You know, the question is going to be whether at any given moment we're willing to set politics aside at least briefly in order to get something done.

He continued: "Surely we can come up with a compromise to solve those problems. So there will be huge differences between now and November 2012 between the parties. And whoever the Republican nominee is, you know, we're going to have a big, serious debate about what we believe is the right way to guide America forward and to win the future. And I'm confident that I will win that debate.”

"And I think increasingly the American people are going to say to themselves, you know what? If a party or a politician is constantly taking the position, my way or the highway, constantly being locked into, you know, ideologically rigid positions, that you know, we're going to remember at the polls," Obama said.

Obama didn't rule out the fall-back plan proposed by Senate Minority Leader Mitch McConnell (R-Ky.) that would give the president the power to raise the debt ceiling to avoid a national default.

"It is constructive to say that if Washington operates as usual and can't get anything done, let's at least avert Armageddon," he said. However, Obama said he wanted to address the deeper debt issues.

"I have not seen a credible plan ... that would allow you to get to $2.4 trillion [in savings] without really hurting ordinary folks," he said.

The president said voters are paying attention to "who seems to be trying to get something done” in the high-stakes negotiations over raising the debt ceiling.

“It's going to be in the interests of everybody who wants to serve in this town to make sure they are on the right side of that impression,” he said.

This story was updated at 12:50 p.m.

How come I can't just leave meetings I don't like?

Read the original here.

President Obama Abruptly Walks Out Of Talks - Jonathan Allen And Jake Sherman

President Barack Obama abruptly walked out of a stormy debt-limit meeting with congressional leaders Wednesday, a dramatic setback to the already shaky negotiations.

“He shoved back and said ‘I’ll see you tomorrow’ and walked out,” House Majority Leader Eric Cantor (R-Va.) told reporters in the Capitol after the meeting.Continue Reading

On a day when the Moody’s rating agency warned that American debt could be downgraded, the White House talks blew up amid a new round of sniping between Obama and Cantor, who are fast becoming bitter enemies.

When Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him.

“Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.” He told Cantor that no other president — not Ronald Reagan, the president said — would sit through such negotiations.

Democratic sources dispute Cantor’s version of Obama’s walk out, but all sides agree that the two had a blow up. The sources described Obama as “impassioned” but said he didn’t exactly storm out of the room.

“Cantor’s account of tonight’s meeting is completely overblown. For someone who knows how to walk out of a meeting, you’d think he’d know it when he saw it,” a Democratic aide said. “Cantor rudely interrupted the president three times to advocate for short-term debt ceiling increases while the president was wrapping the meeting. This is just more juvenile behavior from him and Boehner needs to rein him in, and let the grown-ups get to work.”

On exiting the room, Obama said that “this confirms the totality of what the American people already believe” about Washington, according to a Democratic official familiar with the negotiations, and that officials are “too focused on positioning and political posturing” to make difficult choices.

Cantor insists he never interrupted the president, and was “deferential,” seeking permission to speak.

The latest and sharpest in a series of harsh exchanges between the two leaders heightened concern that markets could crash at any time amid fear of a reduction in the rating on once-ironclad U.S. debt.

Cantor, for his part, delivered the blow-by-blue of his interaction with Obama to a gaggle of Capitol Hill reporters in the Speaker’s Lobby, where lawmakers typically mingle with reporters during votes. It wasn’t through aides — it was Cantor taking on the president, directly.

Cantor accused the president and congressional Democrats of progressively low-balling, over the last several days, the savings that could be achieved from proposals discussed by Vice President Joe Biden’s working group on deficit reduction. Cantor warned that the group has not identified enough cuts to win House passage of a $2.5 trillion debt-limit increase — the size the president says is needed to get through the 2012 election, sources told POLITICO.

Obama told Cantor that he would either have to agree to tax increases or give up on his demand that the debt hike be matched dollar-to-dollar to the cuts — that is, $2.5 trillion in deficit-reduction over 10 years in exchange for a $2.5 trillion hike in the debt ceiling.

He said that the negotiators should return to the White House Thursday to discuss savings from health care programs, budget caps and options for raising revenue.

“Then he said we also ought to get in the mode here, because we’re going to have to decide by Friday which way we’re going,” Cantor said. “He said really we ought to all start to think about things we can do rather than things we can’t.”

That’s when Cantor said he would be willing to abandon his own insistence on having just one vote on the debt ceiling if they could agree to a smaller package of cuts in exchange for a shorter-term hike that would require another increase before the 2012 election.Continue Reading

But Obama said he wouldn’t do the debt-limit increase incrementally and that he would veto a short-term bill.

“That’s when he got very agitated,” Cantor told reporters.

“Obama lit him up. Cantor sat in stunned silence,” said an official in the meeting. “It was incredible. If the public saw Obama he would win in a landslide.”

House Minority Whip Steny Hoyer (D-Md.) said no progress was made in the Wednesday talks.
“The president is spending a lot of time and effort to get us to an agreement, and it is tough,” Hoyer said.
Cantor said he’s trying to inform the group of what House members will agree to pass.

“I’m trying to represent where the votes are in the House. and we’ve always said the votes in the House are consistent with the principles that the speaker’s laid out that we’ve been operating on,” Cantor said. “It is dollar-for-dollar match, it is the no tax increase and it is this other subject that we are discussing tomorrow the enforcement mechanisms … I understand why he’s frustrated. But again, we’re trying to get this thing done, and that’s why I was a little taken aback.”

Despite the president’s abrupt exit, Democratic officials pointed to signs of progress. Officials on Wednesday for the first time reviewed a series of proposed spending cuts. Obama has offered $1.7 trillion in deficit reduction over 10 years, and the parties have agreed in principle on roughly $1.5 trillion of those, officials said.

The agenda Thursday will focus on revenue — the touchiest subject of all for Republicans — and mandatory health programs.

On Friday, Obama wants an assessment of where the process stands, Democratic officials said. Of significant concern is the calendar, and the ability to get everything done in time to avert a crisis. It was unclear whether a lack of agreement by Friday was any sort of dealbreaker, or what consequences might be attached to that assessment.

“We are not miles apart here,” said one Democratic official familiar with the debt talks. “It’s sitting right in front of them.”

Julie Mason, John Bresnahan and Carrie Budoff Brown contributed to this story.

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