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Bulls & Bears
This week Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Pat Dorsey, Eric Bolling and Richard Goodstein.
Democrats Mulling Middle Class Tax Hike to Pay Down Deficit
Eric Bolling, Fox Business Network: This would be an economy killer, but unfortunately I think it has to happen. The top 1 percent of earners pay about 40 percent of income taxes, while the top 10 percent of earners pay about 70 percent. I think the administration and Democrats in congress realize they're running out of taxable money. They just have to ratchet down who's going to get hit by tax increases to make the math work. There's just no way to get deficits under control without all of us getting hit by higher taxes in some form.
Richard Goodstein, former Clinton/Gore campaign adviser: No one is really talking about a middle tax class hike. We have to realize that President Obama is responsible for the single biggest middle class tax cut in the stimulus of all time. What Democrats are talking about is not making the Bush tax cuts permanent. Most middle class taxpayers would not see their taxes hiked. What they're talking about is lowering the tax hike hold threshold down to $200,000 from $250,000.
Gary B. Smith, TheChartman.com: Not making the Bush tax cuts permanent is a tax increase! One thing we need to look at is the claim that President Obama cut taxes for the middle class. When most people think tax cuts, they think their marginal tax rate goes from say, 20 percent down to 15 percent. What President Obama did is the equivalent of sticking money in an envelope and sending it out to people as a kind of one-off payment. It's not an incentive to work or invest more. The Tax Foundation has done excellent work on how everybody would have to see massive tax increases in order to cover our oncoming deficits if we don't do something about them. Unfortunately, it looks inevitable.
Tobin Smith, NBT Media: I like to look at what Paul Volcker has said on the record many times recently. He's basically been saying a Value Added Tax, a federal sales tax, is not only inevitable, it's necessary. Now if you apply that to the 60 percent of Americans who pay less that $100 a month in income taxes, suddenly their effective tax rate doubles. That's going to be a tremendous burden for millions and millions of American taxpayers, and it'll have an effect on consumption and jobs.
Pat Dorsey, Morningstar.com: Someone in Washington is going to have to grow a backbone and start talking about the 75 percent of the budget that's for defense and entitlement programs. Unfortunately, I don't see it on either side of the aisle. If you want to call yourself a deficit hawk, no matter what your political persuasion, you have to cut defense and entitlement programs. No one is doing that, and as a result we'll have to see tax increases across the board.
Walmart Vote Days Away Could Create Thousands of New Jobs
Tobin Smith: This is a huge win for the job market. When Walmart comes into towns, it adds jobs. A $9 starting wage isn't bad these days in an inner city location, like the Walmart planned for Chicago. In pharmaceutical costs, we've seen Walmart drive down prescription costs by 30 percent for families, which is a huge help. This is a terrific win for workers and families.
Richard Goodstein: When Walmart opens, the character of the towns they open in gets compromised. Maybe that's a price people are willing to pay. But it's Economics 101 that a job created in a Walmart destroys a job at a local grocer, drug store, hardware store, etc. I understand there are savings from all the imports from China, but there's a feeling in some quarters that this isn't a trade off everybody wants to accept. Walmart certainly brings value to people, but it comes at a price.
Eric Bolling: All big box retailers are getting a potential green light to move into major cities. With this move to Chicago, there're estimates that up to 12,000 jobs and $500 million in revenue could be created. Now multiply that number nationally, and you're talking hundreds of thousands of jobs and billions in new tax revenues. Walmart doesn't close down grocery stores, it makes them more competitive. And local city governments are starting to realize the potential here by allowing stores like Walmart to come in and open up.
Gary B. Smith: The average full-time hourly worker is making $12 an hour. Maybe the character of towns changes to some degree. But the fact of the matter is, when Walmart has opened its supercenters, the localities have actually seen tax receipts increase not just from Walmart, but from surrounding businesses too. Small businesses actually spring up at a faster rate when Walmart comes in. On top of adding jobs, and spurring small business creation, they're one of the largest and most competitive health insurance providers out there.
Pat Dorsey: Walmart is the often maligned whipping boy that on balance has brought a lot of benefits to the people that work there, and shop there. If a city council votes to allow a Walmart in, then put it up. If they don't vote to put in a Walmart, then let that be their loss, and voters can hold them accountable.
Two Fed Agencies Cancel Trips to Ariziona Over Immigration Law
Eric Bolling: This is nothing short of the economic boycott of one of our own states, and it's deplorable. Is this not the United States of America? How could the federal government sue Arizona for a law put in place to only do what the federal government is supposed to be doing? It's ridiculous.
Richard Goodstein: This is not a boycott and I'll tell you why. The Department of Education is planning a convention is Arizona next week. But that doesn't exempt this Arizona law from being bad. If you get pulled over, don't have an ID, and look Hispanic, you could get put in jail.
Tobin Smith: A joint convention between Mexican and American federal agencies in Arizona got cancelled because Mexico threatened not to show up if it was held in the state. There's a very contrived method here to punish Arizona. For the federal government to punish Arizona for looking out for its own security and economic interests is callous.
Pat Dorsey: My strong suspicion is that there are businesses and other entities in Arizona still selling products, services, etc. to the federal government. So to call this a total boycott of Arizona by the federal government doesn't seem to stack up.