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The Truth about Reagan and tax rates

From TP:

President Obama met with House Republicans today at the White House to discuss ways to move forward on negotiations regarding the nation’s debt ceiling and the budget. During the discussion, talk evidently turned to taxes, and when Obama noted that taxes today are lower than they were under President Reagan, the GOP, according to The Hill, “engaged in a lot of ‘eye-rolling’“:

Republicans attending a White House meeting on Wednesday didn’t take kindly to President Obama telling them tax rates were higher during the Reagan administration. GOP members engaged in a lot of “eye-rolling,” according to a member who was on hand to hear Obama, who invited House Republicans to the White House for discussions on the debt ceiling. […]

“[The President] made a comment like the tax rate is the lightest, even more than (under former President) Reagan,” Rep. Lee Terry (R-Neb.) told The Hill following the meeting. House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) joked that during the meeting, “We learned we had the lowest tax rates in history … lower than Reagan!”

(The fact ) That House Republicans find this preposterous is symptomatic of the hold (that) Reagan mythology has over them. After all, for seven of Reagan’s eight years in office, the top tax rate was higher than the current 35 percent. In six of those years, it was 50 percent or more. And every year that Regan was in office, the bottom tax bracket was higher than the current ten percent.

For a family of four, the “average income tax rate under Reagan in 1983 was 11.06 percent. Under Clinton in 1992, it was 9.18 percent. And under Obama in 2010, it was 4.68 percent.” During Reagan’s time, income tax revenue ranged from 7.8 to 9.4 percent of GDP. Last year, it was 6.2 percent and is not projected to climb back to 9 percent until 2016. In fact, in 2009, Americans paid their lowest taxes in 60 years.

Republicans are very fond of saying that the U.S. has “a spending problem, not a revenue problem.” But the truth is that revenue has plunged due to the recession and to continued misguided tax cuts, and revenue needs to be raised to eventually bring the budget into balance. And Reagan knew that taxes were an important part of the budget equation. After all, he “raised taxes in seven of his eight years in office,” including four times in just two years.

By |2011-06-06T06:34:23-04:00June 6th, 2011|Party Politics, Taxes|Comments Off on The Truth about Reagan and tax rates

Work isn’t valued in America

Work isn’t valued. Making money is valued but work isn’t. If work were valued, then workers would be paid more. No one would ever think about cutting wages or killing pensions if work were valued.

From EPI:

Over the last 30 years there has been very modest wage growth for the typical worker. This is not because the economy was weak and employers were strapped for cash or profits. The economy enjoyed soaring productivity between 1980 and 2009. The Figure compares median wage growth over that period to average gross domestic product growth per worker, a measure of what each individual worker, on average, contributed to the overall economy. This is equivalent to the growth of income per worker as well. While average income per worker grew 59.0%, median wages grew by just 11.2%. Over this same period the amount of wealth (household assets less liabilities) per worker grew by 63.7%.

This modest wage growth was not the result of a broken economy: rather, modest wage growth is the result of the way the economy has been designed to work.  Essentially, economic policy of the last three decades has not supported good jobs. The focus instead has been on policies that claimed to make consumers better off through lower prices: deregulation of industries, privatization of public services, the weakening of labor standards such as the minimum wage, erosion of the social safety net, expanding globalization, and the move toward fewer and weaker unions. These policies have served to undercut the bargaining power of most workers, widen wage inequality, and deplete access to good jobs. In the last 10 years, even workers with a college degree have failed to see any real wage growth.

By |2011-03-20T21:11:52-04:00March 20th, 2011|Business, Economy|2 Comments

Some of the richest counties in the United States surround DC, why? (Updated)

This is an interesting question. I’m glad it was brought up in discussion. Some are pointing to the salaries of federal employees as an indication of how bloated our government truly is.

I look at the zip codes around DC, Virginia and Maryland and I see lobbyists. I see $3000 suits. I see expensive sports cars. I see government contractors. I see multimillion dollar houses which government employees cannot afford. Average income in Loudoun County, Virginia is $110,000. The average government employee income is less than $75,000.

Please note that the house below is for sale in the Loudoun County area.

In case there is some doubt about the enormous income of lobbyists generate, here is the income that these firms are required to report. This is 2009 data. (this table has been updated. It was correctly pointed out that the previous table did not reflect income to the lobbying firm.)

Lobbying Firm Total
Patton Boggs LLP $40,080,000
Akin, Gump et al $32,390,000
Van Scoyoc Assoc $27,300,000
Podesta Group $25,780,000
Brownstein, Hyatt et al $23,220,000
Cassidy & Assoc $22,270,000
Ogilvy Government Relations $21,810,000
Holland & Knight $21,240,000
Dutko Worldwide $19,780,000
K&L Gates $18,570,000
Hogan & Hartson $18,160,000
Williams & Jensen $17,220,000
BGR Holding $15,510,000
Ernst & Young $14,077,701
Quinn Gillespie & Assoc $13,570,000
Cornerstone Government Affairs $12,780,000
Venable LLP $12,394,000
Ferguson Group $11,890,000
Prime Policy Group $11,443,333
Alston & Bird $11,170,000
By |2010-11-12T19:35:40-04:00November 12th, 2010|Domestic Issues|Comments Off on Some of the richest counties in the United States surround DC, why? (Updated)
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