This isn't about the bill. It's about a lot of things including Italy. It's about the dumb money panicking and leaving.

Here's where sometimes the financial markets make no sense. Due to the downgrade of the ratings of US Treasury, there was a widespread stock sell-off to move the money to...

US Treasury issues

Nowhere else to put it. And our debt is still as safe as anything else.

On the plus side, should be a good time to buy soon...

It's a GREAT time to buy right NOW.

I think the S&P downgrade was a surprise. I don't think its coincidental that there were rumors of a downgrade on Thu which is when the market really started to crash.

Tempted, tempted ... but thinking its got some more room to fall.

Especially with September and October right around the corner...

SI

Just put a lot into my retirement right now. Normally don't try and time stuff, but can't pass this up.

Man, teaching AP Government this year is going to be fun.

Any chance you are doing it in DC? They could use it.

I'm actually upping my contribution and shifting towards stocks.

Panic sellers want out...for a little while. Then they throw money towards bonds. But bonds are too boring so they'll be back to the stocks as soon as Warren Buffet shows up to ring the opening bell in a couple of weeks (or some such similar nonsensical show of market stability).

You know............I was wondering. What if a candidate came out right now and said........I'm going flat tax, and I'm cutting spending (not to crazy low levels), and we'll pay off the deficit in 10 years with the surplus. How would people react to paying more tax to balance stuff out? Are we ready for tough love?

I'm sure the downgrade played some part, but the bigger issue is that there's nothing on the horizon that will lead to growth. The EU may have to crack apart, the U.S. has no plan to lower unemployment and China is running out of gas. Because the global rich won't allow anything that hurts them to any degree we're going to stagnate for the next few years.

Big day in Wisconsin tomorrow with 6 Republicans facing recall elections. Dems need three seats to pick up the State Senate. I think they have a good chance of picking up at least two, as one Republican has a scandal and the another will probably fall victim of being in a Republican in a Democratic district.

Two Democrats are up for recall next week also, with one Democrat already successfully defending against the recall after some wife beating Tea Party clown won the Republican primary. One of the Ds might be in some danger, so I'd say that if the Dems want the Senate back, they should win four races tomorrow to be safe. And that's a very realistic proposition for them.

Listen I am not into S&M or nothing but I would be in favor of this plan. The problem with a politician saying this is it will be a lie. I would love for us to pay off the debt and get another 30 years of good times... enough time for me to amass a fortune.

:)

Noop

P.S. Barry makes me mad with his empty speeches.

I'd vote for that candidate in a heartbeat. Been asking for that option for some time now. Just toss out a flat tax with no deductions or credits. Everyone under that option pays their fair share rather than the 'fair share' that Obama's trying to shove down our throats.

If you tied it directly to the actual debt, and did not allow it into the general slush fund, I think you'd have a shot. Not a great shot, but a shot nonetheless.

Flat taxes are shown to be the most regressive form of taxation, far from being 'fair share'. But not surprising coming from someone calling for an end to the Bush tax cuts as something "Obama's trying to shove down our throats".

I'm all for a simplified progressive tax system, but a flat tax is a horrible idea and would destroy the economy unless you've got an insanely high floor to avoid destroying the buying power of the middle and lower classes.

You'd have to make the spending benefit everyone in a more equal way which will never happen.

No, that's not the case at all. Obama's only the latest one to refer to 'fair share' as an escalating tax bracket while leaving in a ton of deductions and credits for corporations and big income earners.

My case is a perfect example and I'll bring it up again. Under the current tax bracket, I'm in the very top tax bracket. My wife and I were supposed to be paying around 35% of our income to taxes. My actual tax rate for last year?????

11%

This stuff about 'fair share' and increasing taxes is an absolute joke. No one is increasing taxes on those people. Why? Because they're always tossing in bones behind the scenes to allow those people to continue to pay a paltry tax rate. A flat tax of even 20% with no deductions or credits would nearly double my current tax liability.

Just another perfect example of these 'leaders' refusing to enact real reform rather than the continued bull that is called 'reform'. Give me a break.

Does anybody have any good links to discussions of a flat tax? On the surface, it sounds like a good idea, but I figure this board will show plenty of differing insights.

I don't understand how the standard conservative economic program is supposed to work.

- Reduce taxes for the wealthy and corporations
- Raise taxes on the lower and working classes
- Cut unemployment benefits
- Cut the earned income tax credit
- Repeal health insurance subsidies
- Immediately pull hundreds of billions out of the economy through government cuts
- Fire tens of thousands of government workers
- Pay teachers and other government employees less
- Eliminate unions
- Reduce or eliminate the minimum wage
- Cut Social Security and Medicare

What's the theory behind these ideas that says things will get better?

The current system seems to benefit GE more than a flat tax would seem to.

You can still have a floor but I don't think it would necessarily need to be insanely high. It could be ~$10k per capita or something like that.

But I do think the practical act of implementing it would be a massive shock to the system. Since companies (presumably) couldn't deduct operating costs, you'd see an instant hike in prices of at least 10-20% (and likely more depending on the industry) since they couldn't deduct the cost.

I guess I like the idea of a flat tax so I don't buy that you can't make it work, principally, with just some very minor tweaks.

Which is why I'm for a simplified progressive system as opposed to the current system or the flat tax.

From David Frum:


A fuckin men

Same here MBBF...my effective rate of income taxation was 14%(which is only that high because I moved to a high tax state). I don't know if you were including other taxes as well in there but I'm certainly not paying 25% all told. I'm not in the top 5% but definitely top 20%.

I don't actually want to pay 25% of my income to the government but I'm struggling to see how a flat tax would do anything other than put it all out there and make it transparent.

Agreed that a simplified progressive system would be a good start.

Yeah, I think we've hit a point in civilization where up is down and left is right...both literally & figuratively. :)

I can't believe I'm agreeing with you on something. I don't agree on the flat tax at all. While I'd love a simpler tax system, I still feel a progressive system is fair because those who earn more receive more in return.

I still there are some deductions worth keeping. I do want one on student loan interest simply because I think we should be encouraging people to get an education. But outside of that, I don't think we need deductions for mortgage interest, new cars, even kids. I never understood why someone who has kids, who uses more resources than me, actually gets to pay less in taxes. We can likely do away with a lot of these extras that makes filling out a tax form so complex.

But the loopholes and bullshit needs to stop. This was one of the most infuriating things I have read in awhile. This is one area where our politicians agree and it is nothing more than corporate welfare.

Corporate Tax Holiday in Debt Ceiling Deal: Where's the Uproar? | Rolling Stone Politics | Taibblog | Matt Taibbi on Politics and the Economy

I also believe that capital gains should be taxed the same as regular income. Not only has it been used to dodge income taxes (we'll just pay our execs in corporate shares!) but there is no reason that one guy who works 40 hours a week should have to pay 30% while the guy who hits his mouse a few times pays 15% of what he makes.

You guys understand that the percentage of federal income tax associated with the "top bracket" only applies to the income in that bracket. So for the first x of your income you're paying at the lower rates, right?

By definition then, your actual rate of federal income taxes is going to be less than that of that of the highest tax bracket.

I understand you're trying to make a different point based on deductions and such, but you're being a little misleading.

While Washington has been more concerned about debt, I don't think they've been that concerned with inflation. I think they'd love some right now. They've been trying to pump money into the economy but banks don't want to do anything with it.

The problem lies with them going through a middle man (the banks) to get money into the economy. They should have just done it direct through real stimulus programs, not the bullshit "everyone throws the pet project they've had on their plate and whatever else big donors want" one we had a couple years ago.

If it's a flat tax, you're going to be paying a smaller percentage anyway.

Even in a simplified tax scale, you don't have anywhere near the amount of paperwork and accounting required right now. Give me a two page document where I enter my income and take it times a fixed percentage. Save me a lot of time and money and this is coming from a guy who has a master's degree in accounting.

I always thought that a flat tax meant that there were no longer the tiered system of taxes we have now? It sounds like the flat tax that people are talking about is that everyone gets taxed the same percentage? Which I guess does get rid of the tiered system.

If we're talking about increasing revenues, how about we fix this shit before we start hitting people with it?

Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes - Bloomberg

The tax code is due for an overhaul. Throughout the IRS's existence, there was a major overhaul every 10 to 15 years. The last time one occurred was 1986.

Yeah, it also gets rid of the tax deduction (or at least the concept I support does) by taxing all income rather than just profit. So, clearly that would increase prices but (imho) would now make the real costs of everything more transparent.

You could argue a downside is that it could be a disincentive for businesses to engage in activities that might not otherwise bother if not for the tax benefit of it....but I think those are outliers. And besides...I'd rather have a motivated person or corporation develop, create, expend resources to do something to make profit and add value than a conglomerate doing it only for the tax benefit.

Yep...close that loophole and the one that GE found and you've cut the deficit by 10%.

Ah cool, thank you. I just don't know enough about the inner workings of our taxes other than I have to pay them. I couldn't find a loophole to save my life.

Hopefully, innovative companies get some kind of reward or benefit. Don't know how, but, there's plenty of people smarter than me, that I'm sure could think of something.

Interesting poll.

CNN Poll: Time to clean house in Congress? – CNN Political Ticker - CNN.com Blogs

2012 will be a fascinating election on many levels. Could see historic turnover.

I agree. Anti-incumbent sentiment will be (and continue to be) the story of elections until one of the parties gets it right.

And by right...I mean what the vast majority of Americans really care about...jobs, rising food & gas costs, and housing...in that order.

Well, the local area bounced out some Dems back in the check-kiting and post office scandals of the early / mid-90s, then put them back in on the next election cycle and they are still there, so I have very little hope for the anti-incumbent fervor.

What it seems to fail to consider is how many are unhappy with the established GOP for compromising as much as they did.

I'm surprised by just how angry a lot of conservatives seem to be that a deal was struck at all, I guess I'm just among the more pragmatic wing of the party sometimes.

For example, I seem to be one of the few conservatives voices in this district who was lukewarm about Broun's "no" vote. From the reaction I got for commenting along those lines in a couple of places you'd have thought I suggested sacrificing fetuses on the town square, selling the stem cells to Satanists, and donating the proceeds to the Taliban.

Those folks ain't real happy with the GOP at the moment either, and if there's more of them than I expected then there's a pretty good chance that there's more of them than most people would expect either.

I've always considered myself a conservative leaning moderate. To back that up my family considers me a right wing whacko. My wife's family thinks i'm just a stone's throw from pinko commie.

To think that Jon hangs with people that consider him to be milquetoast moderate is both funny and frightening to me.

More the former than the latter.

Not all that different from my reaction really ;)

A Tea Party themed candidate could probably win a plurality in most of N.Georgia in a 3-way race with the R's and the D's right now ... if there was any such thing as an organized Tea Party in the first place. Seems to be by it's very nature a rather disorganized thing IMO.

It would help the Tea Party a bit if they didn't have utter morons like Bachmann leading the charge.

what a volatile day in the market. up 150... fed says no interest rate bump till 2013... then down 200... then a 600 point boost to end the day up 420

I have to imagine that computers are causing these huge swings. Just doesn't seem natural at all.

The Fed decision is a double edged sword. On one hand they are saying they won't raise rates, on the other they are almost admitting that the economy is in deep shit for awhile.