Krugman: How Bad America Could Get If a 1%-Loving Republican Wins in 2016

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    Jan 04, 2016 10:21 PM GMT
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    http://www.alternet.org/economy/paul-krugman-how-bad-america-could-get-if-1-loving-republican-won-2016

    ...In Monday's column, Krugman looks at the IRS’s tax tables for 2013, which were released last week, and concludes that elections have real consequences....

    ...which is to say that the stakes for the 2016 election are exceedingly high, with among other things, GOP candidates proposing tax cuts that make Bush's look like mincemeat.


    http://www.nytimes.com/2016/01/04/opinion/elections-have-consequences.html?_r=1
    But the truth is that Mr. Obama’s election in 2008 and re-election in 2012 had some real, quantifiable consequences. Which brings me to those I.R.S. tables.

    For one of the important consequences of the 2012 election was that Mr. Obama was able to go through with a significant rise in taxes on high incomes. Partly this was achieved by allowing the upper end of the Bush tax cuts to expire; there were also new taxes on high incomes passed along with the Affordable Care Act, a.k.a. Obamacare.

    If Mitt Romney had won, we can be sure that Republicans would have found a way to prevent these tax hikes. And we can now see what happened because he didn’t. According to the new tables, the average income tax rate for 99 percent of Americans barely changed from 2012 to 2013, but the tax rate for the top 1 percent rose by more than four percentage points. The tax rise was even bigger for very high incomes: 6.5 percentage points for the top 0.01 percent.

    ... for top incomes, Mr. Obama has effectively rolled back not just the Bush tax cuts but Ronald Reagan’s as well....

    Speaking of Obamacare, that’s another thing Republicans would surely have killed if 2012 had gone the other way. Instead, the program went into effect at the beginning of 2014. And the effect on health care has been huge: according to estimates from the Centers for Disease Control and Prevention, the number of uninsured Americans fell 17 million between 2012 and the first half of 2015, with further declines most likely ahead.

    Now, to be fair, some widely predicted consequences of Mr. Obama’s re-election — predicted by his opponents — didn’t happen. Gasoline prices didn’t soar. Stocks didn’t plunge. The economy didn’t collapse — in fact, the U.S. economy has now added more than twice as many private-sector jobs under Mr. Obama as it did over the same period of the George W. Bush administration, and the unemployment rate is a full point lower than the rate Mr. Romney promised to achieve by the end of 2016.

    ...Whoever the Republicans nominate will be committed to destroying Obamacare and slashing taxes on the wealthy — in fact, the current G.O.P. tax-cut plans make the Bush cuts look puny. Whoever the Democrats nominate will, first and foremost, be committed to defending the achievements of the past seven years.

    The bottom line is that presidential elections matter, a lot, even if the people on the ballot aren’t as fiery as you might like. Don’t let anyone tell you otherwise.

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    Jan 05, 2016 5:26 PM GMT
    Last week the Joint Economic Committee of Congress issued a report on the Obama recovery loaded with even more dismal news. On almost every measure examined, the 2009-15 recovery since the recovery ended in June of 2009 has been the meekest in more than 50 years.
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    Jan 05, 2016 6:11 PM GMT
    Well, that we've recovered at all, and I'm not yet convinced we have, surprises me. This has been hairy as hell. We'll see what the next decade brings.

    I keep an eye towards the debt to GDP ratio and that we survived the 1940's gives me not just hope but knowing that coming out of that was some prosperity for the nation as a whole. I don't know if automation and world markets works against that this time around. But also new tech here and new markets to sell to there creates new jobs so maybe we could wind up even better.

    Hold on, lemme check my crystal ball and I'll get to ya after the fact.
  • tj85016

    Posts: 4123

    Jan 05, 2016 6:52 PM GMT
    the Fed Reserve and the Treasury front-loaded this entire "recovery" with ZIRP, mortgage rewrites, bailouts, $12 or so additional TRILLION in Treasury debt, and a $5.5 TRILLION Fed balance sheet

    it's a sham

    by the way, the USA has the 3rd highest corporate tax in the world (beaten only by the UAE and Chad; Japan is not far behind and they're a mess)

    but the US will not get wacked half as badly as will Canada, Brazil, most of Europe, China, South Africa, Saudi Arabia

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    Jan 05, 2016 8:04 PM GMT
    tj85016 saidthe Fed Reserve and the Treasury front-loaded this entire "recovery" with ZIRP, mortgage rewrites, bailouts, $12 or so additional TRILLION in Treasury debt, and a $5.5 TRILLION Fed balance sheet

    it's a sham

    by the way, the USA has the 3rd highest corporate tax in the world (beaten only by the UAE and Chad; Japan is not far behind and they're a mess)

    but the US will not get wacked half as badly as will Canada, Brazil, most of Europe, China, South Africa, Saudi Arabia


    Is that the net corporate rate or before write off's/loopholes? Because (from a 2013 article I just quickly googled)...

    http://money.cnn.com/2013/07/01/news/economy/corporate-tax-rate/
    GAO: U.S. corporations pay average effective tax rate of 12.6%

    U.S. companies face the highest official corporate tax rate in the world. But there's a big difference between the rates set out by law and the cash that's actually collected.

    further
    http://www.americansfortaxfairness.org/tax-fairness-briefing-booklet/fact-sheet-corporate-tax-rates/
    Key Facts
    •Corporate share of federal tax revenue has dropped by two-thirds in 60 years — from 32% in 1952 to 10% in 2013.
    •General Electric, Boeing, Verizon and 23 other profitable Fortune 500 firms paid no federal income taxes from 2008 to 2012.
    •288 big and profitable Fortune 500 corporations paid an average effective federal tax rate of just 19.4% from 2008 to 2012.
    •Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010.
    •U.S. corporations dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than post office boxes — in tax havens.
    •U.S. corporations officially hold $2.1 trillion in profits offshore — much of it in tax havens — that have not yet been taxed here....

    U.S. effective corporate tax rates are not a burden

    The top statutory tax rate of 35% in the U.S. is somewhat higher than that of 30 other OECD countries, but the average effective tax rate — the actual rate paid after deductions and credits — is slightly lower than our competitors, according to the Congressional Research Service (CRS).

    Several studies have found that U.S. corporations pay a similar or a lower effective tax rate — the rate actually paid — than corporations in other countries. For example:
    •Our average effective tax rate is 27.1% compared with 27.7% for the other 30 OECD countries, according to CRS.
    •Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010, according to the Government Accountability Office.
    •Citizens for Tax Justice’s survey of 288 corporations, which included most of the Fortune 500 corporations that were profitable each year from 2008 through 2012, found that they paid an average effective federal tax rate of just 19.4% over that period.
    •Of 125 corporations in that study that had significant foreign profits, 82 (two-thirds) paid a higher effective rate to foreign governments than they paid to the U.S.

    Some corporations pay nothing in taxes
    •General Electric, Boeing, Priceline.com, Verizon and 22 other profitable Fortune 500 firms paid no federal income taxes from 2008 through 2012, according to Citizens for Tax Justice.
    •111 profitable Fortune 500 firms paid zero federal taxes in at least one of those five years.
    •General Electric, one of the most notorious corporate tax dodgers, got $3.1 billion in refunds on $27.5 billion in profits from 2008 to 2012. The company paid less in federal income taxes in five years than a single American family pays in one year.



    As to debt. I look at that per GDP, because how else to get a historical perspective to judge by.

    So even that still looks scary but also it shows that the country has overcome this.

    This being, I'm sure, a real simple picture of it, but useful enough to illustrate the point

    http://www.economicshelp.org/blog/3018/economics/history-of-us-national-debt-gdp/
    us-debt1900-2015.jpg
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    Jan 05, 2016 8:10 PM GMT
    desertmuscl saidLast week the Joint Economic Committee of Congress issued a report on the Obama recovery loaded with even more dismal news. On almost every measure examined, the 2009-15 recovery since the recovery ended in June of 2009 has been the meekest in more than 50 years.



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  • tj85016

    Posts: 4123

    Jan 05, 2016 8:11 PM GMT
    lol, dude if you're gonna compare the current debt/GDP to the aftermath of World War 2, we're in some serious doo-doo icon_lol.gif
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    Jan 05, 2016 8:13 PM GMT
    money wise, yeah, I think this was as serious. And if I was paranoid, I might think it was a war, one about which we just weren't told. I do not put anything past these "governments".

    Look! She took North America
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  • conservativej...

    Posts: 2465

    Jan 05, 2016 9:15 PM GMT
    In the years ahead there is going to be an even greater distance between those with wealth and the average Joe. Western democracies have simply been committing suicide with the expansion of their money supplies and borrowing. In fact, a large portion of that borrowing is covered by the central banks adding more cash to the money supply.

    You have to understand that people with considerable means did not get there through stupidity. If their ability to generate and use income fails, so will the governments that believe they can steal and transfer that wealth to others.

    If you don't believe me that's fine. Your belief won't change my life one single bit.
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    Jan 05, 2016 11:47 PM GMT
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  • musclmed

    Posts: 3280

    Jan 06, 2016 3:55 AM GMT
    Krugman is a disproven hack.


    After the 2008 recession, so many jobs had been lost that there was only one way to go. Up.....

    If you count the number of jobs added of course it will be higher, business rehired during the recovery.

    Compare the total workforce number and its at a 7 year low.

    A trick of numbers, the uneducated liberal will not notice.

    Also who pays the top tax rate? very few.... And if you taxed all the rich, it wouldnt put a dent in the deficit.