Geithner Won’t Rule Out New Taxes for Middle Class

[Lunar]

http://blogs.abcnews.com/george/2009/08/geithner-wont-rule-out-new-taxes-for-middle-class.html

To get the economy back on track, will President Barack Obama have to break his pledge not to raise taxes on 95 percent of Americans? In a “This Week” exclusive, Treasury Secretary Tim Geithner told me, "We’re going to have to do what’s necessary.”

Geithner was clear that he believes a key component of economic recovery is deficit reduction. When I gave him several opportunities to rule out a middle class tax hike, he wouldn’t do it.

“We have to bring these deficits down very dramatically,” Geithner told me. “And that’s going to require some very hard choices.”

“We will not get this economy back on track, recovery will be not strong and sustained, unless we convince the American people that we are going to have the will to bring these deficits down once recovery is firmly established,” he said.

While Geithner told me, “There are signs the recession is easing,” he warned that, “We have a ways to go.”

“I want to emphasize the basic reality that unemployment is very high in this country,” the secretary said. But, he underlined that the administration is “going to do what is necessary to bring growth back on track.”

Turning to the bank bailout, he told me it is “quite unlikely” that the U.S. Treasury will go back to Congress to ask for more funding for the financial rescue package.

"We do not plan to ask for more money and I think it’s quite unlikely that we do," Geithner said in his most blunt language to date on TARP funding. The secretary said that today the TARP has roughly $130 billion, in part due to more than $70 billion that has already come back into the government.

Geithner also strongly endorsed legislation currently pending in the House that would increase the power of the SEC and give shareholders more rights to vote on executive compensation. He insisted that Republican criticism that the government is overly involved in the financial system is unfounded.

"Everybody understands that we cannot have our financial system go back to the practices that brought this economy to the brink of collapse," he told me. "It is going to take fundamental reform."

[pogo stick]

Well, that's a shocker *rollseyes*, first he doesn't pay taxes, Now he Wants to RAISE them?

[You kip if you want to...]

http://blogs.abcnews.com/george/2009/08/geithner-wont-rule-out-new-taxes-for-middle-class.html

To get the economy back on track, will President Barack Obama have to break his pledge not to raise taxes on 95 percent of Americans? In a “This Week” exclusive, Treasury Secretary Tim Geithner told me, "We’re going to have to do what’s necessary.”

Geithner was clear that he believes a key component of economic recovery is deficit reduction. When I gave him several opportunities to rule out a middle class tax hike, he wouldn’t do it.

“We have to bring these deficits down very dramatically,” Geithner told me. “And that’s going to require some very hard choices.”

“We will not get this economy back on track, recovery will be not strong and sustained, unless we convince the American people that we are going to have the will to bring these deficits down once recovery is firmly established,” he said.

While Geithner told me, “There are signs the recession is easing,” he warned that, “We have a ways to go.”

“I want to emphasize the basic reality that unemployment is very high in this country,” the secretary said. But, he underlined that the administration is “going to do what is necessary to bring growth back on track.”

Turning to the bank bailout, he told me it is “quite unlikely” that the U.S. Treasury will go back to Congress to ask for more funding for the financial rescue package.

"We do not plan to ask for more money and I think it’s quite unlikely that we do," Geithner said in his most blunt language to date on TARP funding. The secretary said that today the TARP has roughly $130 billion, in part due to more than $70 billion that has already come back into the government.

Geithner also strongly endorsed legislation currently pending in the House that would increase the power of the SEC and give shareholders more rights to vote on executive compensation. He insisted that Republican criticism that the government is overly involved in the financial system is unfounded.

"Everybody understands that we cannot have our financial system go back to the practices that brought this economy to the brink of collapse," he told me. "It is going to take fundamental reform."

FOX is gonna have a field day...........

[Fmr. Pres. Duke]

Not a surprise. We have to pay for all these new spending programs in some form or fashion, especially if we pass that healthcare bill. Raising the taxes on the wealthy to obscene levels isn't going to pay for it all. This was obviously going to happen - it was just a matter of time.

[The Duke]

Someone didn't get the memo.

[○∙◄☻¥tπ[╪AV┼cVê└]

Well, obviously they need to pay more taxes so that someone more deserving can have that money, like Geithner's well-connected Wall Street buddies who destroyed the global economy.

[King]

I say we should just go to the California system.  Massive social programs and tax cuts for all.

It's working great.

[opebo]

...Raising the taxes on the wealthy to obscene levels isn't going to pay for it all.

Well, it would if it were implemented, but obviously it will not be implemented.

[Democratic Hawk]

Not a surprise. We have to pay for all these new spending programs in some form or fashion, especially if we pass that healthcare bill. Raising the taxes on the wealthy to obscene levels isn't going to pay for it all. This was obviously going to happen - it was just a matter of time.

What obscene levels would those be? Raising them to the level they were under Bill Clinton?

If taxes have to be raised for singles earning less than $200,000 and couples earning less than $250,000 - and I most sincerely hope it does not come to that - then you can blame Bush the Inept, who after all was bequeathed a most bountiful starting point to his presidency (the trajectory being year on year increase in the budget surplus - and my on my didn't he break his neck to, radically, change course on that), only to cut taxes to the tune of $1.6 trillion (firstly, at a time of prosperity and, secondly, at a time of war), yet bequeath to his Democratic successor anything but

This president moving forward is going to have to make a lot of tough, and by no means popular, decisions - and that's the kind of leadership, which is going to take guts. Bush just thought that by cutting taxes everything would just work out fine. Well it didn't

[Vepres]

Given the deficit, I wouldn't necessarily be against an across the board tax raise. Geithner knows what he's talking about, and considering China is growing uneasy about our deficits, you know we need to deal with it.

[Mint]

Oh please. Did anyone seriously think we'd be able to support national healthcare, several wars, trillions in bail outs, the current entitlement system, and the stimulus just by jacking up taxes on the 'wealthy'? Of course not. Even if they don't raise income tax, the states are going to start jacking up sales taxes (and have in a lot of cases). And all of this is ignoring the reality that the tax receipts this year were the lowest since the 1930s.

Geithner knows what he's talking about

Geithner has no idea what he's talking about. The Chinese know so. You know what they did when he said their treasury investments were safe over there? They laughed at him. Plus his 'plans' for buying up debt made no sense. What would the federal government and 'private' interests do with trillions in useless assets even ignoring the principle of going into debt to bail out the losers who caused this mess? Nothing. The reality is the current approach, particularly in regards to the 'too big to fails', is a bankrupt one and we're going to see just why in a few months IMO.

[Mint]

Well, obviously they need to pay more taxes so that someone more deserving can have that money, like Geithner's well-connected Wall Street buddies who destroyed the global economy.

It's sad that we're on the same page so often now.

Anyway, I can tell you if Obama and the Congress make the mistake of raising taxes it's over for them. You think Bush I suffered for that? Just wait until the people making $34-$82k suddenly are forced to pay well over the >25% they're paying now in taxes.

[opebo]

If taxes have to be raised for singles earning less than $200,000 and couples earning less than $250,000 - and I most sincerely hope it does not come to that

Well, in the first place, $200,000 is an enormous income, but we should be able to get all we need from people richer than that:



So, if the top 1% is currently getting about 20% of national income, and assuming national income is 10 trillion (I know its probably more), and we increase their taxation from the current 30% or whatever it is to, say a modest 60%,  that gives us an extra 600 billion a year.  Coupling that with a total evisceration of the defense budget (say bring it down to 200 billion/year), and a natural growth of revenue (and reduction of expenditure) from the recovering economy, and you have a balanced budget in a few years. 

[Beet]

The Chinese are being totally stupid vis a vis their attitude about their Treasury holdings. They seem to be concerned with the nominal value of their holdings at the dollar-yuan exchange rate. What they don't seem to understand is that their holdings are only valuable insofar as they represent claims on actual goods and services produced by the United States.

Suppose, for example, the Chinese are holding $1 trillion with a dollar to yuan exchange rate of 3 to 1. Their holdings represent 3 trillion yuan. Suppose the dollar depreciates to 2 yuan. Their holdings are now only worth 2 trillion yuan. They just lost 1 trillion yuan! Disaster! right?

Actually, no. You see, when the dollar depreciated vis a vis the yuan, dollar goods also became cheaper for the Chinese. So that US power generator that costs $1 million US dollars at a 3 to 1 exchange rate used to cost 3 million yuan, but now it only costs 2 million yuan!

The Chinese have cause to be concerned about domestic US inflation, but not dollar depreciation by itself. If anything, they should support the gradual re-balancing of 'Chimerica' because anyone can see by now that the status quo is unsustainable.