Posted on 10/14/2013 5:45:35 AM PDT by reaganaut1
David Stockman is at it again. The Reagan-era budget director caused an uproar in 1981 by publicly decrying the moves of his boss to spur the economy with tax cuts. Now a private investor and author, he’s pushing for a huge new tax on big earners. Stockman would subject the nation’s top 10% of households to a levy equal to 30% of their wealth, payable over a decade. Without it, he maintains, the U.S. will wind up in a horrific, Greece-style debt wreck.
Stockman, 66 years old, recently talked up his plan at an unlikely forum: New York City Junto, a monthly soirée of libertarians organized by hedge-fund manager Victor Niederhoffer. The tax-averse crowd listened politely as Stockman laid out his case. For starters, he said, the long-term budget outlook is much bleaker than the “rosy, Keynesian nonsense” put out by the Congressional Budget Office. Stockman reckons U.S. debt, now $17 trillion, is headed to $30 trillion, or 150% to 200% of gross domestic product. “That is a nonstarter, and that takes the system down,” Stockman said. The CBO’s baseline projection puts debt at 130% of GDP by 2050.
The wealth tax, Stockman said, could go a long way toward stabilizing things. It would be part of a broad package of measures he has in mind to bring the deficit down and keep it low. The tax wouldn’t be permanent—it could be lifted in 10 years or so, when debt has dropped to a more manageable 30% of GDP. Interestingly, Stockman, a multimillionaire, would be subject to his own tax.
But Stockman is the first to admit that the proposal may never fly in Washington.
(Excerpt) Read more at blogs.barrons.com ...
If you think Obama gave out a lot of exemptions for Obamacare, wait til you see how long the exemption list would be for this tax.
Twelve days ago, the luxury tax on expensive cars expired. It was the last of the luxury taxes that the first President Bush signed in 1990 as part of the budget agreement in which he broke his “read my lips, no new taxes” pledge.
The agreement was brokered Sen. George Mitchell , D-Maine , then majority leader. And the luxury tax was supported by Sen. Ted Kennedy, D-Mass.
The luxury tax applied not just to cars, but to jewelry, furs and private planes, and to expensive boats — yachts.
Not So Lucrative
Congress estimated that in 1991 these luxury taxes would rake in $31 million. But the actual sum was just $16.6 million.
Why? Because, to the surprise of no one except tax-raising politicians the luxury taxes caused people to buy less jewelry and fewer expensive cars, planes, and, especially, yachts.
The tax destroyed jobs — an estimated 25,000 of them in the boat-building industry, much of which is in New England — in Sen. Mitchell’s Maine and Sen. Kennedy’s Massachusetts.
Job losses cost the government more than $24 million in unemployment benefits and lost income tax revenue. So the luxury tax actually cost the government money.
New England’s boat-building industry was still so devastated by 1999 that another Kennedy — Ted’s son Patrick, a Rhode island congressman — actually proposed a federal subsidy to help rich people buy yachts. He called it, “exactly the opposite of a luxury tax.”
Remember this costly farce when you hear talk about helping the common folks by taxing the rich.
http://abcnews.go.com/ThisWeek/story?id=132568&page=1
David’s 15 minutes were up two decades ago...
I’m guessing this article was posted due to the hype in the title. But if you read the entire thing, I basically agree with everything Stockman says in it, save for the concept of the wealth tax. The Fed has created bubble upon bubble the last 15 years and it is what has driven the “economy”
In the meantime big government and big business have become somewhat indistinguishable from each other, which in the long run is going to completely stifle economic growth and trample on US economic freedoms.
Anyone who says that this idea is "crazy" is both directly and indirectly supporting socialism and progressivism.
Any solution to our economic problems, and they are many, cannot be tied to one part of the public. All must feel the pain equally or as equal as one can make it. Anyone receiving Federal money, must consider a forty percent cut from the get go as a minimum. Once the forty cents on the dollar debt the government is acquiring every year is under control, by shutting off the debt ceiling increase. then the remaining overspending on entitlements must be brought under control.
Government hiring must cease immediately, as there is no rhyme or reason to increase the size of government already at a minimum fifty percent larger than need be. That is an arbitrary number as a starting point to bring things under control. Retirees, and those who leave government may be replaced on a one for three basis. The bottom line remains everyone must feel the pain. Pain now will be far easier to tolerate than pain expected the longer it takes to reach the total tipping point.
Fixed
I am not a math guy, but if the government cut 10% across the board with a 5 year no growth policy, got rid of redundant departments and sent home every illegal alien currently incarcerated and their families, would that make a dent?
Riiiiiiiiiiiiiiight.
If the government instead says, sign over 3% of your assets, the same problem exists, only it is the government that has to find, or print, the ready cash. I don't see how this turns into spendable money.
I am now taking the Hillsdale economics 101 class, so go easy on me if this is a stupid question.
Just who do you think there rich folks vote for and support? It ain’t us. Think Warren Buffett/Soros.
Wouldn’t your solution be better? Of course. But no one will ever propose it.
Oh PS I forgot a couple of items. The Fed must allow interest rates to rise normally, that should really scare the hell out of anyone with a rudimentary understanding of economics, and finally good luck getting any of this by the Senate, much less the occupant of the white house.
Tax Hollywood!
Oh I already know that, I also know it will never EVER happen. I am just sickened by the people who push the “Tax the Rich” stuff are the mega-rich who know darned well it will never apply to them.
I don’t think they have a disagreement with it.
A 30% wealth tax means people end up transferring assets to the government. You could live on your farm, but it is now restricted as a future national park. You run your business, but must give jobs to government cronies or sell it to the state and become an employee.
>> It would just give them license to spend more.
Nailed it.
I’ve got to say I have mixed feelings about the idea. It would be horrible for economy and I think is is morally equivalent to armed robbery but....
Most of the dem elite have already made theirs, income tax does not affect them, if you are ever going to get their skin in the game, it will be in the form of a wealth tax. The IRS taking 30% of the Kenendy clan’s money gives me a little tingle running up my leg.
That being said, I am still against it because it runs contrary to my values.
The interviewer then said, “Do you know how much in France you would have to pay on earnings above 1 million euros [French President Francois Hollande's proposal]? Not 30 percent – 75 percent.”
At that point, Smith said, “75? Yeah, that's different, that's different. Yeah, 75. Well, you know, God bless America.”
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