Ryan’s Hope and Change
Jonathan (FBD) Weisman hands the mike to Paul Ryan who denounces Obama’s trickledown envy economics
Mr Ryan [skip] also opposed “envy economics,” a hit on Mr. Obama’s proposals to curb tax breaks on huge individual retirement accounts, to raise the capital gains tax and to tax inheritances based on the value of assets when they were purchased, not based on their value when the owner died.
[skip]
Mr. Ryan says, the creators are doing well. Others are not.
“The Obamanomics that we’re practicing now have exacerbated inequality. They’ve exacerbated stagnation. They’re made things worse,” he said. “The wealthy are doing really well. They’re practicing trickle down economics now.”
Now it isn’t completely clear to me if the last “they” refers to the wealthy or to the Obamanomists. The sentence makes no sense either way.
But the point is that supply sider Ryan, after reinventing himself as a green eyeshade deficit hawk when the villagers agreed that the deficit was the defining issue of our times, is trying to re-reinvent himself as someone who cares about inequality now that the conventional wisdom is “what may be the defining economic issue of the era — the rising gap between the rich and everyone else —”.
I am not a fan of Mr Weisman. However, both his willingness to quote Ryan at length and his epitomizing of the VSP consensus make this article fascinating.
I do have a problem with the abstract “President Obama’s proposed 10-year budget, to be announced on Monday, will focus on increasing the incomes of the middle class through new spending and tax credits, while adding nearly $6 trillion to the debt” and this sentence “President Obama will propose a 10-year budget on Monday that stabilizes the federal deficit but does not seek balance, instead focusing on policies to address income inequality as he adds nearly $6 trillion to the debt.” The reason is that the proposed reforms “address income inequality” are paired with the total 10 year deficit. It seems to me that the reasonable comparison is the proposed reforms and the proposed 10 year deficit minus the business as usual 10 year deficit.
Weisman (and the anonymous Post staffer) could have well have written that Obama proposes mass production of the extremely expensive F-35 flysing Swiss Army knife and an additional $ 6 trillion in debt. With a bit of work, they could even have reported on the effect of Obama’s proposed reforms on the deficit. But they didn’t.
Weisman didn’t even make it clear that the $ 6 trillion is the proposed 10 year deficit (not the proposed increase in the 10 year deficit). I am sure it is, because the article also says that the debt/GDP ratio will remain about 75% and I can do the math.
It is interesting to see the continuing obsession with the “deficit” and “reducing Social Security and Medicare” as ends in themselves preoccupy VSP media types like Weisman.” Unemployment and underemployment, which along with the over strong dollar which puts downward pressure on wages of U.S. worker directly or indirectly competing in a globalized market, is the primary reason for slow growth in U.S. real medium incomes appears as some vague handwaving in concern with the deficit. (That 10 year predictions about the deficit are pretty worthless anyway also seems not to have penetrated Mr. Weisman’s reporting.)
Ryan plays to the zero information, racists in the base. Ryan is delusional.
It is only class war (envy economics versus greed and exploitation) when the 99% (aka those people) might get a “play” in.
Ryan is consistent given his budget policies the past couple of congresses.
“and to tax inheritances based on the value of assets when they were purchased, not based on their value when the owner died. ”
Why does he want to do that? That seems a dumb idea to me. If I inherent some worthless shares (say Xerox) I have to pay taxes based on what value they had 40 years ago? That doesn’t make sense.
“The Obamanomics that we’re practicing now have exacerbated inequality. They’ve exacerbated stagnation. They’re made things worse,” he said. “The wealthy are doing really well. They’re practicing trickle down economics now.”
Well they may be practicing it, but if it seems like it isn’t working (since inequality is getting worse).
““and to tax inheritances based on the value of assets when they were purchased, not based on their value when the owner died. ”
And Bill Gates kids are laughing.
O.K. So something doesn’t make sense here – what is the real story.
The real story is that Paul Ryan is one of the worst people in the world. And the fact he has any power in the world is beyond scary.
“Obamanomics” is a fictiitious appelation suited to a usual Fox News racist dogwhistle.
Politicians like Ryan!
“and to tax inheritances based on the value of assets when they were purchased, not based on their value when the owner died. ”
That is not in Obama’s tax plan. I’m guessing it is a freudian slip on hte part of RWDWs.
@Reason and@EMichael “tax inheritances based on the value of assets when they were purchased, not based on their value when the owner died. ” is indeed garbled. It is an attempt to explain the proposed reform of taxing capital gains based on the increase in value since the assets were purchased not the increase in value since they were inherited.
This would be very very costly for any Gates kids who hypothetically sold a few shares.
Let’s try hard to remember that inherited wealth of any kind is income to the heirs. It may be the estate of the dead, but that doesn’t change the fact that an inheritance is income once received. It’s not “family wealth.” If it were family wealth then all designated members of the family would have a right to spend that wealth before the death of the primary generator of the wealth. Ergo, it is income to the heirs. It should be taxed as income when received at its value when received. Of course the primary generator of the wealth could have taken steps to share that wealth before death, which in most cases has likely been done. That’s what they call estate planning, aka, planning wealth distribution in order to avoid taxation. That’s really patriotic. Why not just put the kids to work in the family business and let them “earn” their share of the wealth as it is being generated? Yes, that means the kids would be paying their share of income taxes as they receive their largess. But at least they would have worked for the money and wouldn’t then have to pay inheritance taxes. Pay your taxes. It’s the patriotic thing to do. And it may help reduce taxes on the rest of us.
Jack-The top estate tax rate is higher than the top marginal income tax rate. In addition it was a Democratic administration that agreed to significantly increase the unified credit to nearly $11,000,000 per couple.
In terms of scrapping the step-up in basis…good luck. Come to think of it since this administration and their allies have shown their love for health insurance companies it’s about time to shower the life insurance industry with some money as well. Down with the step-up in basis!
LJ,
Yeah, but the estate tax only effects .15% of all estates. And the vast majority of those estates consist of assets that have never been taxed before.
http://www.cbpp.org/cms/?fa=view&id=2655
Your insurance company thing is silly, unless of course you cannot add to 60.
Ryan’s take on Obama’s “Hope” :
http://rlv.zcache.com/paul_ryan_nope_png_poster-rb8e4235a00704220b0de0660c176acd5_wvk_8byvr_324.jpg
Just a minor question here:
“and to tax inheritances based on the value of assets when they were purchased, not based on their value when the owner died.”
With shares it is a little bit quirky (because a share is not always the same thing – think of share issues and buy backs). But what happens to the limitations period here – can we be sure that we even know when assets are purchased? Do you have clear accounting documents for all your assets?
Reason,
The proposal is to use the original cost as the basis for calculating gain.
As it is now, if you buy stock for $10,000, die when it’s worth $1,000,000 and leave it to your kids who sell it at $1, 010,000, the capital gain is only $10,000, because the basis is considered to be $1,000,000 – the value at your time of death.
Under the new proposal, it would be $1,000,000, the real amount of the on the investment.
I’m asking an accounting question, not about the proposal.