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Bulls & Bears
Brenda Buttner was joined by Gary B. Smith, Pat Dorsey, Eric Bolling, Tobin Smith and Nancy Skinner.
Dems' Plan to Let Middle-Class Tax Cut Die; Tax Hikes Coming for All?
Gary B. Smith: It is simple mathematics in this case. You have a budget that is going to be in the trillions of dollars. You have major deficits. Even if the focus was on people making $250,000 — even if you tax them at 90%, President Obama would not be able to pay for all of these programs, so the whole point of there will be no new taxes on 95% — it is “BS” now and it will be more “BS” in the future.
Nancy Skinner: During his campaign, he said that he was going to have a tax cut. He did not say in perpetuity. We have a global economic meltdown and you guys are all worried about deficits. The Democrats have always supported pay-as-you-go. The next step is, start to pay down that deficit and recover.
Eric Bolling: That is what you get. You are going to pay more for your driver’s license. You’re going to pay more for postage. You were going to pay for everything more on the state level.
Tobin Smith: The bigger issue here is that the rich aren’t so rich anymore. American Express said that 30% of the people for small business people are not paying themselves a salary now. We got the statistics in that the withholding tax is down 9.5%. The capital gains are down 20%. That is why the math does not work.
Bailed-Out Banks Still Not Lending; Blocking Job Creation?
Eric Bolling: TARP has been a miserable failure: Of the $700 billion, $600 billion was pushed out quickly and they’re still not lending us money. That number is 23% less, fewer loans going out the door now than before TARP. I put this out on Twitter and I said “give me a story”. I have long list. One person was looking for $3,000 from Wells Fargo. He was denied. Another guy is looking for his credit card rates to go down. He says he has about 800 rating. Banks are taking the TARP money and they are loaning it out, but loaning it on a long-term basis: 10 years. That is not credit that is going down to you had died. It is going to big hedge funds. It is not going to the real people who need it the most.
Gary B. Smith: Just another great government program that has had the opposite effect of what it was supposed to. I think there are cases where people should and must get credit. I think for a large percentage of the population, kind of pulling back on the use of credit, kind of living of the Dave Ramsey way, within your means. For the institutions to strip their guidelines to lend, I do not think that is bad. I think a lot of lack-lending is what got us into the problem in the first place. I am not sure it is all that bad.
Tobin Smith: There is no question. As I said in that American Express study, 30% of small business people are not paying themselves. When small business runs out of oxygen, they throw their jobs over the lifeboat.
Pat Dorsey: I think this beating up on banks story is absurd. When the economy is weak, people are less likely to repay loans, thus you loan less money. The problem we got into a few years ago was loaning money to people who could not pay it back. That is why we’re in the mess we’re in. The Fed surveys show demand for credit is down substantially. You cannot land to people who do not want it. There are some business owners were not getting loans and possibly they should. Demand for credit is lower because people are not racking up the kind of debt.
Pres Plan to Clean Up Earth... Creating a Second Tax Day in U.S.?
Eric Bolling: Let’s call it pollution tax; let’s call it a manufacturing tax. You cannot win this one. Here’s what it is: if you produce a gallon of gasoline, a kilowatt hour of electricity, or a bag of Fritos, you are going to pollute a little bit in the process, you get tax, and you’re going to do one of two things. Number one, you are going to pass that on to the consumer; bad. They are going to move to China or Iindia where there is no cap and trade tax; more bad.
Nancy Skinner: This is free-market nirvana. It is taking all the powers of the market to find those technologies, to “incentivize” green technologies. It gives companies plenty of time to put profit in inventing those technologies. We did this back with the Clean Air Act and it worked brilliantly. It is not a government control and command kind of thing. It is the free market, its profit, its green jobs, it’s perfect.
Tobin Smith: Here is why it is bad. In Europe, it does not work. The idea was supposed to be that if they added this pollution tax onto a corporation, they would pay less in corporate tax so it would offset their corporate taxes. But no, we decided that we were going to add this new pollution tax on already out of the corporate world, so instead of deducting it, it’s going to be a whole new set of taxes. Unfortunately, it is dead on arrival.
Pat Dorsey: I think the larger issue is whether a cap-and-trade tax actually does what it is supposed to do, which is to change the behavior of companies to actually reduce carbon output. The price they are talking about per ton of carbon is about $20 per ton. That, according to our studies is not high enough to change behavior. Basically at that point, you have a big scheme that does not really do very much. You need be prices north of $30 to actually impact the emission of carbon.