July 08 2008 show notes

Topics, guests, upcoming events, quotes, links to articles, audio clips, books & bumper music.

Tuesday 08 July '08 show

  • What is rational tax policy?
  • Book: Wealth and Democracy: A Political History of the American Rich, Kevin Phillips.
  • Guest: Dr. Edgar Browning, professor of economics, Texas A&M University. Author, "Stealing from Each Other: How the Welfare State Robs Americans of Money and Spirit". He suggests that progressive tax policies are a form of theft, and are very expensive. Thom's candy bar example - we all use the commons, government services. Why he thinks Obama's economic plan will cost America its future. He called social security a transfer program, welfare, not an insurance program. Medicare. Investment programs. Social security's paid to retired persons, widows, orphans, the disabled; it was set up as an insurance program and it's always been an insurance program. Interest on the debt. Veterans benefits. Unemployment.

    Federal budget. The food stamp program comes under the Department of Agriculture. He said no country has ever redistributed its way to prosperity. The example of Denmark which Thom visited recently, one of the most prosperous nations and on Earth. Average income. His article, "Let's cut taxes on the rich" in which he says, "Am I the only one that thinks the rich are overtaxed relative to the middle class. First, the rich provide most of the capital that is used in the American economy and makes us all more productive as workers.

    Second, the rich also provide highly skilled labor services to the economy". The majority of new jobs created over the last 35 years in the United States were created by companies with fewer than fifty employees, that is to say, started by entrepreneurs, by and large people who are not rich people, who are starting companies on a shoestring, on a credit card. Whether people are paid more if they become more productive. The decline of wages. Inflation. Fringe benefits. The Asian economy. Let's go back to the taxation system we had under Eisenhower, a Republican.
  • Bumper Music: Suddenly I See , KT Tunstall.
  • Bumper Music: Have You Had Enough?, Rickie Lee Jones, Tom Maxwell and Ken Mosher.
  • Redistributing wealth is a healthy thing for society, Americans used to agree on it, e.g. Dwight Eisenhower. Taxation history.
  • Article: .
    "France in a Lather as President Takes a Swipe at Cushy Benefits".
  • Bumper Music: I'm so Loathsome I Could Spy, Paul Hipp.
  • Guest: Roni Deutch, head of the nation's largest tax resolution law firm. Her blog. Who has a better tax plan - McCain or Obama? She likes it that McCain does not want to come in and raise taxes. The dollar will rebound. How can it rebound given the debt? Do you want fries with that? She said we've got to lower corporate taxes. Tax havens, shelters, loopholes. We have a major tax crisis. Obama wants to raise the tax on dividends 35%. She wants them to keep reinvesting. Let's keep it fair for the wealthy. Families each owe $115,000 national debt.
  • Bumper Music: Blow Smoke In Your Eyes, Dave, The Power Hour.
  • Bumper Music: Crazy, Gnarls Barkley.
  • Article: Group proposes George W. Bush Sewage Plant. "The panel says it's a fitting tribute to the 'mess' he'll leave behind"
  • The major point of cleavage between Obama and McCain, beyond the Iraq war which feeds into the economy, is the economy. McCain is the elitist with 8 mansions, over $100m. Obama just paid off his college loans.
  • Investing in stock does not put your money into the company, unless it is an initial public offering, but into the hands of other investors.
  • Thom:

    Here's the thing that most people don't get...

    let's say I have backyard and I dug down and I found, you know, a big pile of gold and all of a sudden I've got a million dollars worth of gold that I take it down and I convert it to dollars, and what am I going to do with that? I go down and I say, "okay I'm gonna invest in the American economy". I buy a 100,000 or million dollars. Let's say it's a million dollars worth of gold and I buy a million dollars worth of stock. You know, whether it's Exxon Mobil or Apple or IBM, it doesn't matter, I buy a million dollars worth of stock.

    What does that do? All that does is, I didn't put a million dollars into Exxon Mobil or IBM or General Motors by doing that; I simply put a million dollars in the pockets of some other stockholder who decided to sell his stock and if he sold it at a profit, by the way, he's only going to pay a maximum of 15% income because it's a capital gain. And, you know, if you lost money he can deducted from his income taxes, you know, try doing that with the loss of you know, the barbecue set that you bought or something like that. I mean, this is where it is so skewed; people investing in the stock market are not stimulating our economy. And people just don't get it...

    This is such a core concept. When when a business starts, the initial investors, the initial investors who put in the money, they're the ones who fund that business. Beyond that, when you buy stock in the company you're not giving a penny of that company. You're not supporting Exxon Mobil if you buy Exxon Mobil stock unless you can buy enough of it to drive up the value of the stock so that the executives can sell off their stock options, but the money is not going to Exxon Mobil. It's going to some other stockholder. Once that stock has been issued and it's out on the market, it's simply a game; it's simply going around in a circle. So to say, "well, we've got to make sure that the wealthy, they have more wealth so that they can invest it", it's not helping the rest of us.

  • Bumper Music: We Can't Make It Here Any More, James McMurtry.
  • Clip:
    "Roosevelt is dead, his policies may live on, but we're in the process of doing something about that as well." Rush Limbaugh.
  • Bumper Music: Calling America, ELO.
  • Sheldon Drobny, co-founder of Air America Radio, used to work for the IRS and is a tax expert and a venture capitalist, and sent Thom a note from which Thom quoted:
    "Historically, when individual taxes were higher on the wealthy". Again, as I said, you know, give me the Eisenhower taxes of 91%, the Kennedy taxes of 71%. He says, "historically when individual taxes were higher on the wealthy the economy is stimulated because the lower income people pay less tax and have more spendable income". See, that's the bottom line is that what drives the economy is consumer spending. And so if you if you reduce the taxes, which is what Barack Obama's proposing to do by the way, reduce or minimize the taxes to working people then they will spend that money, Spending money, frankly, is much better for the economy than so called investing money, you know, buying stocks in the stock market. Buying stock in the stock market is simply moving money around from the hands of one investor to another investor as I pointed out. It doesn't, the money does not end up in the corporations, it doesn't help the corporations.

  • Article: Iraq says may agree timetable for U.S. withdrawal.
    Iraqi Prime Minister Nuri al-Maliki: "This means the phenomena of unilateral detention will be over, as well as unilateral operations and immunity... Today, we are looking at the necessity of terminating the foreign presence on Iraqi lands and restoring full sovereignty."
  • Article: Administration Rebuffs Maliki

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