[lzw]

I think you misunderstand those who argue against increases in taxes. The argument is not "principles" but practicality of it. It is never %4 on %2. For instance the "bush tax cuts" would have cut the taxes of the poorest brackets in half, but the democrats wouldn't allow that. That there was %7 on %90 or so.

High taxes are why we're hurting in the first place. It is government that has so damaged our economy. Take the housing bubble, for instance. Ideologues want to pretend that "banks" caused it, but the reality is it was clinton and bush.

During the clinton era, they decided that "lending money only to people who can pay it back is racist" and changed bank regulations to make the "american dream" available to "all". Then under bush, the interest rate-- controlled by the government via the federal reserve-- was lowered below inflation, which means you could borrow money and earn a zero-risk return on it higher than the cost of borrowing. The primary mechanism for this was the housing market.

Thus, housing bubble. Leftists like Krugman praised it claiming that the housing bubble was just what the economy needed. Meanwhile, practical people who understand economics warned against it.

Now, after half a decade of listening to political types claim there was no housing bubble, or that the bankers caused it, you're now claiming we need to raise taxes because its "practical".

I'd like to see you explain how it is practical.

One things for sure, it won't help the economy.

[prodigal_erik]

The CRA required the same lending standards for good credit risks in minority neighborhoods, not lower standards. And it didn't even apply to the shady mortgage banks who fueled the housing bubble. They were eager to write loans to anyone who could fog a mirror, because they knew they could get a bent rating and dump even the stupidest loan on Wall St.

[bd_at_rivenhill]

Actually, the CRA has very vague requirements, which led it to be used as a tool in a political process whereby community activists worked to block expansion of banks which did not meet their criteria. When stuck between the requirement that an institution's CRA activities should be undertaken in a safe and sound manner and the vocal opposition of politically powerful groups, the regulators did the logical thing in their situation and avoided bad publicity by relaxing standards. In addition, the law was changed to require Fannie and Freddie to do more business in low to moderate income areas in the early 2000s, which defacto reduced their standards and allowed a great deal of crappy subprime paper to be stamped with an implicit (later explicit) government guarantee. If it weren't for this last part, a lot of those loans could not have been securitized. The flood of low quality mortgages did not come as a result of regulatory laxity but of legislative intent, and that is the story that is not being told.

[0abdd0e66h]

I'm talking about taxes on the top earners, not 'middle class' taxes. It's "practical" in the sense that it would help reduce the deficit which a certain group of people seem to be so outraged at. Of course, we can cut benefits, which I'm assuming is your preferred mechanism for balancing the budget. The problem is that cutting benefits seems to negatively affect a higher percentage of the population who are not top earners vs. scraping some bucks from the top of the incomprehensibly rich. Whether or not private enterprise is actually more "efficient" at spending money is something I would also like to see proven.

[isaacagarcia]

"Raising taxes on the top 2% of households, as Mr. Obama proposes, would bring in $34 billion next year: enough to cover nine days’ worth of the deficit,"

http://www.economist.com/node/17043472?story_id=17043472

This conversation is a waste of time and is pure political rhetoric for election season. $34 billion is insignificant and simply a means to incite class warfare.

[blasdel]

Letting these cuts expire is the lowest-hanging fruit for boosting revenue — there are a lot of others above it, like expanding the estate tax before the boomers all die. They're just doing the simplest thing first.