Geithner: Taxes on ‘Small Business’ Must Rise So Government Doesn’t ‘Shrink’

Posted by: Sequel

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(CNSNews.com) - Treasury Secretary Timothy Geithner told the House Small Business Committee on Wednesday that the Obama administration believes taxes on small business must increase so the administration does not have to “shrink the overall size of government programs.”

(...)

Geithner, continuing, argued that if the administration did not extract a trillion dollars in new revenue from its plan to increase taxes on people earning more than $250,000, including small businesses, the government would in effect “finance” what he called a “tax benefit” for those people.

“We're not doing it because we want to do it, we're doing it because if we don't do it, then, again, I have to go out and borrow a trillion dollars over the next 10 years to finance those tax benefits for the top 2 percent, and I don't think I can justify doing that,” said Geithner.

Not only that, he argued, but cutting spending by as much as the “modest change in revenue” (i.e. $1 trillion) the administration expects from raising taxes on small business would likely have more of a “negative economic impact” than the tax increases themselves would.

“And if we were to cut spending by that magnitude to do it, you'd be putting a huge additional burden on the economy, probably greater negative economic impact than that modest change in revenue,” said Geithner.

This is the problem with the "thinking" out of the Whitehouse in a nutshell. They need to raise taxes and a failure to raise taxes is a tax benefit for the rich, that must be "financed".

This trillion dollar tax increase is a "modest change in revenue". If they don't raise taxes they'll have to finance the trillion dollars for the Washington gravy train, but cutting government by the same amount is a "huge burden on the economy". Hacking at the private sector is modest, but cuts to government is a catastrophe. Assholes.

With this kind of thinking is it any wonder that Bernanke is flummoxed trying to figure out why the economy isn't going gangbusters?

 

 

 

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TomC
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written by TomC , June 24, 2011

Geithner, the tax cheat, is another academic type that has no idea how the economy works. Yet another brilliant idiot. One idiot after another makes these types of nonsensical statements and the media eats it up.


Woody
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written by Woody , June 24, 2011

The anti-intellectual movement at this blog is quite interesting.


Sequel
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written by Sequel , June 24, 2011

Is that self contradicting babble what folks on the left are calling intellectualism?


Nobody
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written by Nobody , June 24, 2011

So Timmy the tax cheat is intellectual now BWAHAHAAHAH!?

I moved from a "S" corp to a "C" last year to avoid this shit. Cost me a few grand but will pay for its self next year. There a ton of people that will do this, net gain to da govmint? Zip zero nada.



Woody
So Timmy the tax cheat is intellectual now BWAHAHAAHAH
written by Woody , June 24, 2011

I guess so. Tom sure seems to think so. I think he used the term brilliant idiot and academic type. I can't say for sure. You'll have to figure this out.


Nobody
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written by Nobody , June 24, 2011

Timmy -the tax-cheat Is a part of achedeme. AND A FUCKING IDIOT! When he has to balence the check book, or go home and puke because he may not be able to make payroll the next day, get back to me, dude.


Woody
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written by Woody , June 25, 2011

I don't know many "FUCKING IDIOTS" that are President of the NY Fed and Treasury Secretary. Achedeme?? You should rename this blog Anti-College!


TomC
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written by TomC , June 25, 2011

Woody

I am neither anti-college nor anti-education. I just do not have the same awe and blind respect for an academic's opinion that the media and many others seem to have.

Academics live and work in "University World," a separate universe of liberal ideals, thoughts, and processes. Tenured faculty have the freedom and security to explore, research, develop, and spew their ideals. There does not have to be any relevance to the real-world. An experiment fails and a different hypothesis is tried.

When an academic moves into government and experiments, there are major real-world ramifications. Most academics do not have any experience is dealing with ramifications of their actions, whereas business people are doing it deftly all the time.

Business people, small business people in particular, are always dealing with 'bottom-line' ramifications. People who have matriculated through academia and government have never had to deal with the bottom-line. Some give a cursory acknowledgement to it, like the President and most of his advisers, but that is all.



Elmer
academic
written by Elmer , June 25, 2011

Woody, I've been an academic my entire career, and sometimes I cringe at what is said here. But TomC is being honest and frank (not current vogue in academics). There are a lot of skeptics around this place, but not so many anti-intellectuals. I always think of this place as a libertarian corner bar, not a would-be graduate seminar.


Barthélemy Barbancourt
Thanks Elmer
written by Barthélemy Barbancourt , June 25, 2011

Woody try to really read what Geithner said, it's pure garbage. Our government doesn't have to spend billions on the military, welfare, SS or Medicare, we choose to. The economic repercussions of huge changes in any area are really up for debate.

I know the most about medicine and I can assure that some very educated people have said that a major restructuring of medicare would boost the economy, not hamper it. The effects would kick in almost immediately in some areas.

Changes to SS would take longer to take effect, but there too there is room for greater freedom, lower costs and increased economic activity.

Also, please don't dismiss Nobody, Tom or myself as anti-education. I know both of them and they are very well read and classically educated. Ask Elmer, who works in academia, if he sees a major disconnect between some theorists and others who have applied their work practically.

The current administration gets knocked for recruiting from the faculty lounge too heavily because far too few of them have the real world experience to know when to chuck a bad idea and try to find a better one. We sing the praises of the private sector for the simple reason that it weeds out people like the BO admin damned quick.

I lost $50K on my second house flip. I made a shit load of mistakes and learned from them and made $50K on my next project. That kind of education can only be had in the real world of the private sector. Also, people who have played with their own money learn much faster than those that play with other people's money. I would say that many that play with taxpayers money never have the chance to learn anything.

Obama squandered $100 million in the Annenberg Challenge and learned nothing. he had no skin in the game. I see this behaviour everyday in his administration.




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