Did the Bush tax cuts work? - Tilted Forum Project Discussion Community

ASU2003 · 09-13-2010, 07:42 PM

I know I didn't get any money back since I was in school back then, but has any economists looked into the effect giving tax cuts using borrowed money actually has long term?

While I would say it does help the economy, either people pay off their debts or may choose to buy something they may not have. Did it cause enough stimulus to the economy to generate taxes equal to the stimulus. You have Sales tax going to help the state budgets, income taxes from the workers making the products going to the government, investments in wall street or expanding businesses by the rich (which are taxed when shareholders take profits), and it all sounds great. However, if the tax cuts are greater than the revenue it generated for the government, then we are paying interest on those tax cuts now year after year. I could also ask if this was an artificial action by the government meddling with the free market. Where would we be if the Bush tax cuts failed to pass? The economy for me wasn't that great in 2003-2004, yet my life wouldn't be impacted very much if I had to pay higher taxes now.

I know this will get political, and I was debating putting it over in the Politics area. But, I am trying to look at the numbers and see if we can learn from the past. If someone else would like to make one over there to look into the games they are playing now, feel free. You can ask if there are other taxes that should be lowered or eliminated instead of these tax cuts. And is Obama going to say that the $1 trillion deficit (that may be reduced by paybacks), could have been less if the upper tax cuts expired ($700 billion/10 years I have heard estimated I think).

robot_parade · 09-14-2010, 05:34 PM

I'm afraid I don't know of a source that discusses this without involving ideology and politics. My feeling is that the economy was fine after The Bush Tax Cuts went into effect, but it was also fine during the Clinton years of Evil High Taxes. The Bush Tax Cuts didn't prevent the housing bubble or the Great Recession, but they probably didn't cause the GR either. What they do contribute to is the long-run budget deficit. I don't think there's any plan that balances the budget and keeps TBTC intact. If you keep TBTC, you have to have massive cuts to medicare/medicaid, defense, or completely dismantle something like the department of education or department of transportation.

Shadowex3 · 09-14-2010, 08:47 PM

Something else to consider is that these are tax rates on your AGI. When discussing taxes, particularly when discussing taxes from Reagans second term onwards, it's important to remember that the government doesn't just automatically get X money from Y people. A lot of the argument comes from the assumption that everyone in the top 2% is simply losing that tax rate in income while everyone below that is simply getting it all back (and sometimes then some). Even someone making 250,000 a year can easily have a lot of deductions and credits meaning they pay much less than the actual rate in taxes.

And that's just the start of considering whether modern tax rates can "work" or not, it's frankly pointless to compare bush and clinton as we're talking a pretty much negligible difference in comparison to the historical rates of 50% and above from 1932 until basically 1980.

Willravel · 09-14-2010, 08:55 PM

No, they didn't work. Trickle-down economics is not something any serious economist would espouse as being helpful for the vast majority of people.

Seaver · 09-14-2010, 11:07 PM

Tax cuts are only effective (amount of money put back in circulation per dollar government can no longer spend) on low/middle class families.

2% reduced taxes on a 50k/yr family is relatively small, and almost immediately gets spent. However small, the sheer number of families in the Middle class ensure massive amounts of funds reinvested into the economy.

2% reduction on a multimillionaire is a massive sum, with very few people in the category. Unfortunately when someone has 2million in the bank, 100k is almost un-noticable. It doesn't get reinvested like trickle-down economics preaches, it sits in the bank.

So does the tax cuts work? Yes, but there is a BIG separation in effectiveness. That's a big reason I support Obama's pledge to continue the tax cuts to people making below $250k. I'm sorry if you make more than that you have no reason whatsoever to complain in this country.

Tully Mars · 09-15-2010, 02:22 AM

Quote:

Originally Posted by robot_parade

I'm afraid I don't know of a source that discusses this without involving ideology and politics. My feeling is that the economy was fine after The Bush Tax Cuts went into effect, but it was also fine during the Clinton years of Evil High Taxes. The Bush Tax Cuts didn't prevent the housing bubble or the Great Recession, but they probably didn't cause the GR either. What they do contribute to is the long-run budget deficit. I don't think there's any plan that balances the budget and keeps TBTC intact. If you keep TBTC, you have to have massive cuts to medicare/medicaid, defense, or completely dismantle something like the department of education or department of transportation.

Do you know the difference in % between the Evil Clinton tax rates and the Bush rates? Might want to Google that.

I think the TBTC might well be designed to make it necessary to dismantle things like Dept of Education and make massive spending cuts in all social programs. If that's true they worked great.

Baraka_Guru · 09-15-2010, 05:20 PM

Here is one view from American economist Edmund Phelps:

Quote:

The false hopes of tax cuts

By Edmund S. Phelps

NEW YORK -- There is a movement in medicine to require that applications for licenses to sell a new drug be "evidence-based." By contrast, trained economists view their discipline as having already achieved this scientific standard. After all, they express their ideas with mathematics and arrive at quantitative estimates of implied relationships from empirical data.

But economics is not evidence-based in selecting its theoretical paradigms. Economic policy initiatives are often taken without all the empirical pretesting that could have been done.

A notorious example is postwar macroeconomic policymaking under the radical Keynesians. They relied on Keynes' untested theory that unemployment depended on "effective demand" in relation to the "money wage," but their policy ignored the part about wages and sought to stabilize demand at a high enough level to ensure "full" employment.

Cecil Pigou and Franco Modigliani objected that if demand were increased, the wage level would rise, catch up to demand and thus push employment back down to its previous level. Employment cannot be sustained above its equilibrium path by inflating effective demand.

Still, Keynes' radicals prevailed through what the economist Harry Johnson called "scorn and derision." Postwar macroeconomic policies were dedicated to "full" employment, without any evidence that money wages would not get in the way.

In the late 1950s, neo-Keynesians finally conceded the point raised by Pigou and Modigliani. Will Phillips' work on wages gave them no choice. But they still insisted that steady increases of demand at a fast enough rate would keep demand one step ahead of the money wage level so that employment could be kept as high as desired, albeit at the cost of steady inflation.

In different ways, Milton Friedman and I objected, arguing that such a policy would require an ever-rising inflation rate. Money wages will lag behind demand, I argued, only as long as the representative firm is deterred from raising wages by the misperception that wages at other firms are already lower than its own -- a disequilibrium that cannot last.

Like the radicals, the neo-Keynesians did not engage their challengers with empirical testing. The efficacy of high demand was a matter of faith. Yet events in the 1970s put that faith to a cruel test. When supply shocks hit the U.S. economy, the neo-Keynesians' response was to pour on more demand, believing it would revive employment. There was little recovery -- only faster inflation.

The current era offers a parallel. Although policy has since shifted to reflect supply-side economics and real business-cycle theory, the new paradigm builders and promoters display the same antipathy to checking data for serious error.

An earlier classroom lesson was well-founded: temporarily below-normal tax rates on labor this year, when merged with the prospect of reversion to normal rates next year, will encourage households to squeeze more work into this year and to work less in future years. This proposition was recently tested anew on Icelandic data and performed well.

But the supply-siders jumped to the daring conclusion that a permanent cut in tax rates on labor would encourage more work permanently -- with no diminution of effectiveness.

Larry Summers and I both doubted that this could be generally true. If every increase in the after-tax wage rate gave a permanent boost to the amount of labor supplied, we reasoned, steeply rising after-tax wages since the mid-19th century would have brought an extraordinary increase in the length of the workweek and in retirement ages. But both have fallen, and in continental Europe unemployment is higher.

In my view, this core tenet of supply-side economics rests on a simple blunder. What matters for the amount of labor supplied is the after-tax wage rate relative to income from wealth. While after-tax wage rates soared for more than a century, the wealth and the income it brought grew just as fast.

To be sure, if tax rates were decreased permanently this year, there would initially be a strongly positive effect on labor supplied. But there would also be a positive effect on saving and thus on wealth next year and beyond. In the long run, wealth could tend to increase in the same proportion as after-tax wages. The effect on work would vanish.

We must proceed cautiously. In standard analyses, the tax cut brings a reduction in government purchases of goods and services, like defense. But a tax cut could instead contract the welfare state -- social assistance and insurance, which constitute social wealth. In that case, the tax cut, while gradually increasing private wealth, would decrease social wealth. The issue is an empirical one.

Research I did with Gylfi Zoega a decade ago confirmed that cuts in taxes on labor boost employment in the short run. But what about the long run? Do large long-run effects of tax rates show up in international differences in employment?

In 1998 we examined data from the Organization for Economic Cooperation and Development for a correlation between national unemployment rates in the mid-1990s and tax rates on labor. We found none. In 2004, we looked at labor-force participation rates and again at unemployment. Still no correlation.

High-unemployment countries include high-tax Germany, France and Italy, but also low-tax Japan and Spain. Low-unemployment nations include low-tax Britain and the United States, but also very high-tax Denmark and Sweden.

Neoliberals are now telling continental Europe that tax cuts on labor can dissolve high unemployment. But the effectiveness of such tax cuts would be largely, if not wholly, transitory -- especially if the welfare state was spared. In two decades' time, high unemployment would creep back.

The false hopes raised by cutting taxes would have diverted policymakers away from fundamental reforms that are necessary if the Continent is to achieve the dynamism on which high rates of innovation, abundant job creation, and world-class productivity depend.

Edmund Phelps, Nobel laureate in economics for 2006, is professor of economics at Columbia University and director of its Center on Capitalism and Society.

The false hopes of tax cuts | The Japan Times Online

The bottom line:

Tax cuts generally help the rich and can potentially harm the poor.
Tax cuts can boost employment, but mostly---if not wholly---on a short-term basis.
There is no correlation between unemployment and tax rates on labour.

Cimarron29414 · 09-16-2010, 06:09 AM

The top 2% of income earners account for 25% of consumer spending. Consumer spending represents 70% of GDP.

Don't underestimate the power of giving them money to spend to grow the private sector.

filtherton · 09-16-2010, 06:32 AM

Quote:

Originally Posted by Cimarron29414

The top 2% of income earners account for 25% of consumer spending. Consumer spending represents 70% of GDP.

Don't underestimate the power of giving them money to spend to grow the private sector.

I don't think it's plausible that giving the richest 2% an extra few drops in their bucket will amount to much. These people can already afford to spend whatever the want.

roachboy · 09-16-2010, 06:42 AM

if the top 2% was such an economic motor you'd think that we wouldn't be in the mess we're in. they could heroically spend our way out of it.

filtherton · 09-16-2010, 06:47 AM

Clearly, if we suspend TBTCs for the top 2% they will stop creating all of the jobs that they're currently creating. They've been very successful in creating jobs so far

.

roachboy · 09-16-2010, 06:53 AM

yes. so far the tax-break driven activities of the top 2% has been an awesome success story. who in their right mind would reverse the cuts?

Baraka_Guru · 09-16-2010, 06:58 AM

When the likes of the top 2% get a windfall, they don't typically spend it in the same way most people would. While the top 2% account for a good chunk of consumer spending, what are the odds of their spending more on consumer goods as a result of tax cuts?

These 2%ers are not spenders like you and me. They're savers. They're budgeters. Many of them know exactly where every penny goes, and they like to hang onto as much as they can while not sacrificing their lifestyle.

Give a rich man $50,000 in tax cuts and he'll likely invest it in God knows where. Maybe China or India.

Give the average guy $1,000 and he's likely to spend it (and maybe more) on something he's been meaning to get for a while.

Regardless, the impact is short term (if you believe the info in the article I posted above). It's not like the guy is going to keep spending that kind of money.

---------- Post added at 10:58 AM ---------- Previous post was at 10:55 AM ----------

Quote:

Originally Posted by roachboy

yes. so far the tax-break driven activities of the top 2% has been an awesome success story. who in their right mind would reverse the cuts?

No one. It's folly to think you can eliminate tax cuts or—gasp—raise taxes to deal with a deficit and pay down a runaway debt. No one would recommend that ridiculous course of action.

Just let the rich keep more of their money. That'll fix things. It always has. Just let them be and we'll move toward full employment and if you eliminate enough social programs (who needs those with full employment?), the government can finally pay off their socialist debts.

roachboy · 09-16-2010, 07:40 AM

certainly. because there's no reason to do anything else. no indications of anything but triumph after triumph for neo-liberal thinking.

Quote:

Census: 1 in 7 Americans live in poverty
By HOPE YEN, Associated Press Writer Hope Yen, Associated Press Writer

WASHINGTON – The ranks of the working-age poor climbed to the highest level since the 1960s as the recession threw millions of people out of work last year, leaving one in seven Americans in poverty.

The overall poverty rate climbed to 14.3 percent, or 43.6 million people, the Census Bureau said Thursday in its annual report on the economic well-being of U.S. households. The report covers 2009, President Barack Obama's first year in office.

The poverty rate climbed from 13.2 percent, or 39.8 million people, in 2008.

The share of Americans without health coverage rose from 15.4 percent to 16.7 percent — or 50.7 million people — mostly because of the loss of employer-provided health insurance during the recession. Congress passed a health overhaul this year to address rising numbers of the uninsured, but the main provisions will not take effect until 2014.

The new figures come at a politically sensitive time, just weeks before the Nov. 2 congressional elections, when voters restive about high unemployment and the slow pace of economic improvement will decide whether to keep Democrats in power or turn to Republicans.

The 14.3 percent poverty rate, which covers all ages, was the highest since 1994. Still, it was lower than estimates of many demographers who were bracing for a record gain based on last year's skyrocketing unemployment. Many had predicted a range of 14.7 percent to 15 percent.

Analysts credited in part increases in Social Security payments in 2009 as well as federal expansions of unemployment insurance, which rose substantially in 2009 under the economic stimulus program. With the additional unemployment benefits, workers were eligible for extensions that gave them up to 99 weeks of payments after a layoff.

Another likely factor was a record number of working mothers, who helped households by bringing home paychecks after the recession took the jobs of a disproportionately high number of men.

"Given all the unemployment we saw, it's the government safety net that's keeping people above the poverty line," said Douglas Besharov, a University of Maryland public policy professor and former scholar at the conservative American Enterprise Institute.

Other census findings:

_Among the working-age population, ages 18 to 65, poverty rose from 11.7 percent to 12.9 percent. That puts it at the highest since the 1960s, when the government launched a war on poverty that expanded the federal role in social welfare programs from education to health care.

_Poverty rose among all race and ethnic groups, but stood at higher levels for blacks and Hispanics. The number of Hispanics in poverty increased from 23.2 percent to 25.3 percent; for blacks it increased from 24.7 percent to 25.8 percent. The number of whites in poverty rose from 8.6 percent to 9.4 percent.

_Child poverty rose from 19 percent to 20.7 percent.

In 2009, the poverty level stood at $21,954 for a family of four, based on an official government calculation that includes only cash income before tax deductions. It excludes capital gains or accumulated wealth, such as home ownership.

As a result, the official poverty rate takes into account the effects of some stimulus programs in 2009, such as unemployment benefits as well as jobs that were created or saved by government spending. But it does not factor in noncash government aid such as tax credits and food stamps, which have surged to record levels in recent months. Experts say such noncash aid tends to have a larger effect on lowering child poverty.

Beginning next year, the government plans to publish new, supplemental poverty figures that are expected to show even higher numbers of people in poverty than previously known. The figures will incorporate rising costs of medical care, transportation and child care, a change analysts believe will add to the ranks of both seniors and working-age people in poverty.

Census: 1 in 7 Americans live in poverty - Yahoo! News

Baraka_Guru · 09-16-2010, 07:49 AM

Now I'm curious to know what the health coverage is like for this 20% of American children who live in poverty.

ASU2003 · 09-16-2010, 08:42 AM

Quote:

Originally Posted by Baraka_Guru

Now I'm curious to know what the health coverage is like for this 20% of American children who live in poverty.

State Children's Health Insurance Program - Wikipedia, the free encyclopedia

And here is the opposition view on SCHIP
Sinking SCHIP | Michael F. Cannon | Cato Institute: Commentary

Our health care system is a mess currently.

----------------------

As for the 2%... Couldn't they be sitting on the sidelines and not spending their money on purpose as a protest? I mean, I boycott some companies, but you never hear the media say, that millions of Americans aren't shopping someplace because they disagree with the operation and business practices.

And the rich are buying up gold now. I'm not sure what would cause a gold bubble to burst.

FuglyStick · 09-16-2010, 08:47 AM

Bucatti Veyrons and $100 million mansions don't create jobs. That's where that tax break money is going, not into the economy.

Tully Mars · 09-16-2010, 09:23 AM

Hey now this is America and everyone has an equal opportunity. All you have to do is work hard and be smart then you too can own that McMansion and Bucatti. Oh, that and the checks in the mail and I won't cum in your mouth.

Wes Mantooth · 09-16-2010, 10:06 AM

I by no means am an expert on economics and you will probably all be dumber for having read this post...no seriously you may just want to skip it all together...

I'm not a fan of personal anecdotes to provide evidence but I'll indulge a little bit here because it might make a point for discussion. I know a fair number of wealthy people around here and one thing I've noticed about each and every one of them is they feel if they can't get the maximum benefit from the money they invest into our economy they simply are just going to find other ways to use it (They's taxin mah profits to high!!! I can't afford to hire people and I'm cutting positions left and right because my profits are razor thin kind of stuff). I have no clue what the economical advantage is to the following but it seems they'd rather just sit on the money and collect interest or send it overseas or something where they can (apparently) get more bang for the buck. I don't know how widespread this mentality is but if every wealthy bastard in the US is yanking money out of the economy to protest or avoid high taxes that doesn't seem very beneficial either.

Now I don't necessarily subscribe to the above and its a very broad overview of some of the discussions I've had lately but there you go. So did the Bush tax cuts work? I have no idea, some seem to think so and others don't as best I can gather about taxes it just depends on what your personal political outlook is when it comes to what works and what doesn't.

In my opinion as long as what I'm paying is fair and not crippling my bank account then I'm happy to pay it.

Tully Mars · 09-17-2010, 10:32 AM

Quote:

Originally Posted by Wes Mantooth

In my opinion as long as what I'm paying is fair and not crippling my bank account then I'm happy to pay it.

That used to be a real popular thing. I can remember my dad and my uncle talking when I was a kid and I'd always hear them use the phrase "Hey, I pay my taxes!" With that one statement they were saying two things... I'm honest and I pay my fair share. Today it's almost a badge of honor to many to pay little or no taxes regardless of income. Heck I see ads all the time where people claim they owed "X" amount in taxes but they'd called the offices of "Dewey Cheatem and Howe Attorneys at Law." Now they only had to pay 5-10% of what they owed. I always see that and think "great now the rest of us have to pick up your share."

Wes Mantooth · 09-17-2010, 11:01 AM

"Hank Hill, tax payer"

It was a pretty common for people to be proud to pay their way in the US but I think that generation (and philosophy) is slowly dying off. People today would never sacrifice comfort for the war effort, they'd never actively participate in local politics, functions or fund raisers and they certainly don't want to sacrifice their lifestyle and personal income to pay taxes. It would almost seem the prevailing mentality these days is "that's not my responsibility" and as long as that's an acceptable way of thinking people will always demand lower taxes.

I get that people want to get the most bang out of their buck and want to decide for themselves how the money they earn is spent. I get people who are upset that taxes are too high and paying them is more of a financial burden then anything else and it is important to work out a balance that both benefits us as a whole while benefiting our wallets as well. However I'll never understand the mentality behind refusing to pay anything (or as little as possible) at all and demanding the folks on the other side of the track take the responsibility.

"Taxes should be paid by the rich!!!"

"NO!!! We invest our money the poor need to pick up the slack!!!"

How about everyone just pays their fair share and we leave it at that?

dogzilla · 09-17-2010, 11:16 AM

Quote:

Originally Posted by Wes Mantooth

"Hank Hill, tax payer"

It was a pretty common for people to be proud to pay their way in the US but I think that generation (and philosophy) is slowly dying off.

I don't have a problem with paying my fair share for taxes. However, my fair share does not include taxes for somebody else who isn't paying any taxes. My fair share also does not include paying taxes so that the government can play Robin Hood and give stuff to people who the government thinks don't have enough stuff.

Quote:

Originally Posted by Wes Mantooth

How about everyone just pays their fair share and we leave it at that?

Exactly. There were articles in the news over the past year about how only 46% of the people paid any income tax. That means there's some 54% that aren't paying their fair share.

Baraka_Guru · 09-17-2010, 11:41 AM

Quote:

Originally Posted by dogzilla

Exactly. There were articles in the news over the past year about how only 46% of the people paid any income tax. That means there's some 54% that aren't paying their fair share.

Is this 46% of the entire population?

I ask this because over 20% of the population are minors, as many as 15% live in poverty, and another 12% or so are seniors. Now factor in the unemployed. Plus, I'm not sure what the numbers are on invalids or people who are otherwise unfit to work.

Wes Mantooth · 09-17-2010, 12:11 PM

Quote:

Originally Posted by dogzilla

I don't have a problem with paying my fair share for taxes. However, my fair share does not include taxes for somebody else who isn't paying any taxes. My fair share also does not include paying taxes so that the government can play Robin Hood and give stuff to people who the government thinks don't have enough stuff.

Oh I agree, would could save a a fortune on what we do pay if we didn't have inept govt officials running bloated out of control social programs (amongst many other things..military anyone?)...I don't even mind the Robin Hood mentality but for god sakes if we are going to do it can we not find the most ass backwards, inefficient way possible to get it done?

Anyway the problem is everyone wants a tax cut and when you do that you only shift the burden somewhere else, they in turn demand a tax cut and suddenly there is nobody left to pay for anything. Instead of constantly shifting the burden from rich to poor to middle class we need to find a way to get everybody paying a fair percentage, but none of that really matters if the government doesn't care to find a way spend our money in the most efficient ways possible.

Then again to ask for efficiency and a fairly balanced tax system might mean that everybody has more responsibility and wont get everything they want when they ask for it...so yeah...that candidate or any party supporting the idea probably isn't getting elected any time soon.

dogzilla · 09-17-2010, 12:58 PM

Quote:

Originally Posted by Baraka_Guru

Is this 46% of the entire population?

I ask this because over 20% of the population are minors, as many as 15% live in poverty, and another 12% or so are seniors. Now factor in the unemployed. Plus, I'm not sure what the numbers are on invalids or people who are otherwise unfit to work.

This webpage calculates the percentage of the total number of tax returns, not percentage of the population. The data is a few years old but in line with the 46% quoted this year.

The Tax Foundation - Number of Americans Paying Zero Federal Income Tax Grows to 43.4 Million

Quote:

During 2006, Tax Foundation economists estimate that roughly 43.4 million tax returns, representing 91 million individuals, will face a zero or negative tax liability. That's out of a total of 136 million federal tax returns that will be filed. Adding to this figure the 15 million households and individuals who file no tax return at all, roughly 121 million Americans—or 41 percent of the U.S. population—will be completely outside the federal income tax system in 2006.1 This total includes those who pay no tax, and those who pay some tax upfront and are later refunded the full amount of the tax paid or more.

Baraka_Guru · 09-17-2010, 01:22 PM

Quote:

Originally Posted by dogzilla

This webpage calculates the percentage of the total number of tax returns, not percentage of the population. The data is a few years old but in line with the 46% quoted this year.

The Tax Foundation - Number of Americans Paying Zero Federal Income Tax Grows to 43.4 Million

Based on your same source, the profile of those 40+ million non-payers looks like this:

91% earn less than $19,000 (less than 4% earn more than $40,000)
35% are under 25 years old (likely to be students)
15% are 55+ years old (at least some of them will be retirees or seniors who work part-time)
35% work full time year round (20% work full time less than 50 weeks)
46% are part-time workers (20% of them working less than 13 weeks)

So what you have are people making very little money (a vast majority), half of them being either young or old, and nearly half of them working part-time jobs (a fifth of them working fewer than 3 or so months out of the year).

I'm not all that surprised they aren't paying any income tax. How much should the feds be milking from these people?

Shadowex3 · 09-17-2010, 04:44 PM

And here is the problem. We've just crossed from whether or not a given tax rate can mathematically work, an entirely objective matter, to whether or not a given tax rate is moral and what constitutes "fair" taxing.

The latter is a pretty violently divided issue in america because a huge portion of the country still follows, even if only on a subconscious level, our founders extremist beliefs: That someone's prosperity or misfortune in this world is a direct sign of whether they are chosen by god for salvation or eternal damnation and to interfere in that in any way, whether it be taxing those doing well or offering any kind of assistance to those suffering in some way, is a direct interference with gods plan.

Just look at the language people use when talking about this. They talk about fair, moral, right, just, and some people (my classmates at times) will even call it "evil". Talking about what constitutes a "fair" tax isn't a matter of any kind of economics or science, its a religious belief.

filtherton · 09-17-2010, 05:05 PM

Quote:

Originally Posted by Shadowex3

Talking about what constitutes a "fair" tax isn't a matter of any kind of economics or science, its a religious belief.

I would extend the religion accusation to economics in general. Two opposing economists sound more like a catholic and protestant arguing over scripture than they do scientists.

Tully Mars · 09-17-2010, 05:12 PM

Quote:

Originally Posted by Baraka_Guru

Based on your same source, the profile of those 40+ million non-payers looks like this:

91% earn less than $19,000 (less than 4% earn more than $40,000)
35% are under 25 years old (likely to be students)
15% are 55+ years old (at least some of them will be retirees or seniors who work part-time)
35% work full time year round (20% work full time less than 50 weeks)
46% are part-time workers (20% of them working less than 13 weeks)

So what you have are people making very little money (a vast majority), half of them being either young or old, and nearly half of them working part-time jobs (a fifth of them working fewer than 3 or so months out of the year).

I'm not all that surprised they aren't paying any income tax. How much should the feds be milking from these people?

You shouldn't be surprised by the numbers. But one thing to think about is those tax rates, schedules and % is most of them are a direct result of the Bush Jr. tax cuts that Conservatives love so much. Another thing to consider is it's basically a not factual to say 30, 40 or even 50% of people don't pay taxes. Because the source and the number provided in it are only looking at income tax. When the CBO released a study of analyzed total effective federal tax rates by income, and comes up with the following "Effective fed tax rates"-

Lowest 20 percent………$15,900 ……………………4.3 percent

Second 20 percent…….. $37,400…………………… 9.9 percent

Middle 20 percent……….$58,500………………….. 14.2 percent

Fourth 20 percent……….,$85,200………………….. 17.4 percent

Top 20 percent…………..$231.300…………………..25.5 percent

Top 1 percent…………..$1,558,500………………….31.2 percent

These numbers include things like gas taxes, fees, etc...

So who's paying 0% in fed taxes? Pretty much no one, but it's a good lie and it gets the base fired up.

dogzilla · 09-18-2010, 02:23 AM

Quote:

Originally Posted by Tully Mars

You shouldn't be surprised by the numbers. But one thing to think about is those tax rates, schedules and % is most of them are a direct result of the Bush Jr. tax cuts that Conservatives love so much. Another thing to consider is it's basically a not factual to say 30, 40 or even 50% of people don't pay taxes. Because the source and the number provided in it are only looking at income tax. When the CBO released a study of analyzed total effective federal tax rates by income, and comes up with the following "Effective fed tax rates"-

Lowest 20 percent………$15,900 ……………………4.3 percent

Second 20 percent…….. $37,400…………………… 9.9 percent

Middle 20 percent……….$58,500………………….. 14.2 percent

Fourth 20 percent……….,$85,200………………….. 17.4 percent

Top 20 percent…………..$231.300…………………..25.5 percent

Top 1 percent…………..$1,558,500………………….31.2 percent

These numbers include things like gas taxes, fees, etc...

So who's paying 0% in fed taxes? Pretty much no one, but it's a good lie and it gets the base fired up.

So why should anybody get to pay 0% in income tax if they have an income? What difference does it make whether they pay other taxes or not? If you want the benefits of a government then you should be contributing to that government if you have an income.

Tully Mars · 09-18-2010, 05:29 AM

Quote:

Originally Posted by dogzilla

So why should anybody get to pay 0% in income tax if they have an income? What difference does it make whether they pay other taxes or not? If you want the benefits of a government then you should be contributing to that government if you have an income.

If people are paying fed taxes in any manner they are "contributing to that government." For years the taxes on the fed level have been shifting from income tax to fees and item specific tax. Gas prices and state tax on that gas vary from state to state so I'm not sure there are numbers or studies that could be quoted but for the most part gas costs everyone (in a given area) the same amount. So if you have a family of four making 20K a year the % of their income spent on gas and it's taxes might be 10% or more. Now if you have the same family of four making 250K a year that % might be less then .05%. Does that sound like both families are paying their "fair share?"

This why wealthy people were pushing the idea of a flat tax not so long ago. I remember Dick Army speaking on a Sunday morning news show where he stated something to the effect of "if everyone just paid 2500 a year we could solve our budget problems." Ok, great... if you make 50K or more that would be fine. But if you make 10K a year you were probably struggling before but now you're no longer able to afford even the basics. Even if you worked it as a % and not a set amount. Most flat tax people used the number of 17% if I remember correctly. Most economists said it would more likely be closer to 25%. Either way it works great if you have expendable income... it completely screws those who do not.

I guess it all comes down to what is your definition of "fair share."

Shadowex3 · 09-18-2010, 02:13 PM

Which again comes down to the very-nearly-religious belief that has cropped up in only the last 30 years or so that people with lots of money are pretty much divinely entitled to keeping more of it their income than people that don't have as much.

One of the things that needs to be accounted for in taxing isn't just the flat rate of the tax itself, but what percentage of that brackets income that flat rate is, and how much income the person is left with in an absolute sense. If bill gates paid Reagan's 81% tax rate he'd still have more money than most people would ever be able to spend, but if my friend's family paid a 40% tax rate they wouldn't be able to afford ramen noodles.

dogzilla · 09-18-2010, 03:21 PM

Quote:

Originally Posted by Tully Mars

If people are paying fed taxes in any manner they are "contributing to that government." For years the taxes on the fed level have been shifting from income tax to fees and item specific tax. Gas prices and state tax on that gas vary from state to state so I'm not sure there are numbers or studies that could be quoted but for the most part gas costs everyone (in a given area) the same amount. So if you have a family of four making 20K a year the % of their income spent on gas and it's taxes might be 10% or more. Now if you have the same family of four making 250K a year that % might be less then .05%. Does that sound like both families are paying their "fair share?"

To use your specific gas tax example, the purpose of the gas tax was supposed to finance a highway fund. So yes, if both people spent the same amount for gas and paid the same tax, then both are paying their fair share.

Quote:

Originally Posted by Tully Mars

This why wealthy people were pushing the idea of a flat tax not so long ago. I remember Dick Army speaking on a Sunday morning news show where he stated something to the effect of "if everyone just paid 2500 a year we could solve our budget problems." Ok, great... if you make 50K or more that would be fine. But if you make 10K a year you were probably struggling before but now you're no longer able to afford even the basics. Even if you worked it as a % and not a set amount. Most flat tax people used the number of 17% if I remember correctly. Most economists said it would more likely be closer to 25%. Either way it works great if you have expendable income... it completely screws those who do not.

I guess it all comes down to what is your definition of "fair share."

Fair share is that everyone pays the same percentage. I don't have a problem with the concept of a flat tax.

Tully Mars · 09-18-2010, 04:17 PM

I can respect that opinion even though I disagree. Personally I think a flat tax will simply add more to the growing ranks of people who live in poverty. I don't think that helps the US at all.

roachboy · 09-21-2010, 06:10 AM

ok so here's something interesting.

Quote:

Fearing a soaring deficit, many analysts favor letting Bush tax cuts expire

By Lori Montgomery Washington Post Staff Writer
Tuesday, September 21, 2010; 3:23 AM

The tax cuts at the heart of a fierce pre-election battle on Capitol Hill were designed when the economy was booming, the federal budget was in surplus and George W. Bush was campaigning for president on a promise to return the extra cash to taxpayers.

Today, the economy is sluggish and the national debt is soaring to worrisome levels. As lawmakers bicker over whether to extend the Bush-era tax cuts, not just for the middle class but also for the wealthy, many economists and budget analysts say there's a simple way to curb borrowing: Let the tax cuts expire for everyone.

Official and independent budget estimates show that letting tax rates spring back to pre-Bush levels for all taxpayers would bring the country within striking distance of meeting President Obama's goal of balancing the budget, excluding interest payments on the debt, by 2015.

"If we actually ended the Bush-era tax cuts, that would pretty much do it," Obama's recently departed budget director, Peter Orszag, said in an interview last week with CNN's Fareed Zakaria. "If you do a bit on the spending side and then end the tax cuts, you pretty much get there."

But for all the election-year hand-wringing about deficits, no one in Washington is talking about letting the tax cuts lapse on schedule in January. Instead, Senate Republicans have offered a measure that would extend all the cuts, adding nearly $4 trillion to the debt over the next decade. This week, Senate Democrats say they plan to unveil a bill that would preserve most of the cuts for most Americans. That would add nearly $2 trillion to deficits by 2020.

Obama argues that allowing the cuts to expire for the wealthiest 3 million taxpayers - one of the chief differences between the two Senate proposals - is more fiscally responsible than the GOP's position. "The first thing you do when you're in a hole is not dig it deeper," he said at a town hall meeting Monday in Washington.

But the Democrats' plan also represents a pretty big shovel, budget analysts said.

"Both parties are being disingenuous here," said Robert Bixby, executive director of the nonprofit Concord Coalition, which advocates balanced budgets. "When I hear the Democrats saying Republicans are willing to add to the deficit, well, the Democrats are willing to add $2 trillion to the deficit themselves. The Democrats are doing almost as much damage to the deficit as the Republicans are."

Although the down economy might offer good reason to keep tax rates low for another year or two, putting more money in the hands of consumers, Bixby and other budget experts say it makes no sense to maintain that level of taxation permanently when the government is borrowing more than 40 cents of every dollar it spends.

The nonpartisan Congressional Budget Office predicts that the economy would be stronger with the cuts, but only through 2012, when the extra borrowing they require "would reduce or 'crowd out' investment in productive capital." Even former Federal Reserve chairman Alan Greenspan, an early advocate of the cuts, now says Congress should let them expire.

"I am very much in favor of tax cuts, but not with borrowed money," Greenspan said in an interview last month.

The budget outlook was far rosier when Bush conceived the cuts, which were one of the biggest tax reductions since World War II. Thanks to tax increases and robust economic growth, the Clinton administration had balanced the budget for the first time since the 1960s and was starting to pay down the national debt.

Bush pushed the cuts through a Republican Congress in 2001 and 2003, lowering levies on inherited estates, dividends, capital gains and income at all levels. He wiped out a de facto tax penalty on married couples filing jointly, doubled the child tax credit and created a 10 percent tax bracket at the very bottom of the income scale. At the upper end, he cut the top rate from 39.6 percent to 35 percent.

Lawmakers also revised the alternative minimum tax (AMT), an expensive parallel tax structure that would otherwise have deprived millions of people of the benefits of the cuts. That added billions more to the cost.

What would it cost to keep the cuts now? Preserving them all, with the AMT fix, would reduce revenue by nearly $3.9 trillion over the next decade, according to the CBO. The extra borrowing would tack an additional $1 trillion onto the nation's interest payments, the CBO says.

Defenders of the tax cuts say that those costs are irrelevant and that the real problem is rising levels of federal spending.

"Washington is scheduled to spend $46 trillion over the next decade. I wish the people who are focusing on criticizing the tax cuts would focus on the $46 trillion in runaway spending," said Brian Riedl, a budget expert at the Heritage Foundation. "The numbers are very scary, and even economically painful tax increases will not make a very large dent in the budget deficit."

But a paper to be released Tuesday by the Center for American Progress (CAP) shows how difficult it would be to stabilize the debt solely through spending cuts. If all the tax cuts were extended, Congress would have to cut $325 billion in 2015 alone to get the deficit down to Obama's target of 3 percent of the gross domestic product. If the cuts were preserved only for the household incomes less than $250,000 a year, as Obama has proposed, Congress would still have to cut $255 billion.

A one-year reduction of either size would amount to the sharpest cut in federal spending "since the military demobilization after World War II," said Michael Ettlinger, the paper's co-author and CAP's vice president for economic policy.

Ettlinger and co-author Michael Linden conclude that closing the gap would require "really painful and politically difficult" actions, such as slashing highway funding and agriculture subsidies by two-thirds and taking deep bites out of Pell college grants, the Pentagon, housing assistance - even Social Security.

Ettlinger is not among those who call on Obama to let the Bush tax cuts expire, saying it would break the president's campaign pledge to protect the middle class. Still, he added, "we're going to have to put revenue on the table."

So far, neither the White House nor congressional leaders have come up with a plan to avoid trillions in fresh borrowing if the tax cuts are extended - and that's making moderates in both parties nervous. After Senate Minority Leader Mitch McConnell (R-Ky.) put out his nearly $4 trillion tax plan last week, several Senate Republicans said they would prefer a less expensive temporary extension of two to three years.

Meanwhile, more than 30 House Democrats have signed a letter calling on Speaker Nancy Pelosi (D-Calif.) to consider extending all the cuts temporarily - a plan that would not only cost less but also let them avoid raising taxes on the wealthy in an election year.

washingtonpost.com

now if the case that ending the bush-cuts would balance the budget is well-argued (and it is) then the quality of the argument and data are really the only elements open to dispute, yes?
no-one can reach into the future and say whether this would turn out as predicted or not.
however, most economic (free-marketeer) conservatives have no problem whatsoever living entirely within metaphysical constructs when it comes to economic matters so long as they get to define which terms are used. so inside conservative private language, making grand statements about the hydraulic nature of the economy is quite the opposite of a problem. it's a way of life.
all of which is to say that if there's a problem with the above, it's either at the level of argument or data, not with the idea that it makes statements about the future that conservatives don't like because they can't control the terms of debate.

conservatives also like to blah blah blah about "balanced budgets" and "fiscal responsibility" and all that stuff.

so how on earth can the right oppose allowing these cuts to expire?
they haven't stimulated economic activity.
they haven't done shit in the present economic situation--you know, the recession that every week or so is declared to be over despite the continuing rise in unemployment, the continuing stagnation of velocities real and symbolic, commodity and capital.

let them expire.

dogzilla · 09-21-2010, 07:47 AM

Quote:

Originally Posted by roachboy

ok so here's something interesting.

washingtonpost.com

now if the case that ending the bush-cuts would balance the budget is well-argued (and it is) then the quality of the argument and data are really the only elements open to dispute, yes?

There's two elements to the debt issue. Tax revenues and government spending.

If the the tax cuts are allowed to expire so we can fix the federal debt problem, then Obama's spending needs to be severely cut as well. That means revoking every single one of his stimulus programs and health care plan for starters. Then fix the problem approximately half the population paying no income tax. If we have a national problem, the federal government needs to get serious about it's overspending and everyone needs to participate in paying off the debt.

Baraka_Guru · 09-21-2010, 08:00 AM

Quote:

Originally Posted by dogzilla

There's two elements to the debt issue. Tax revenues and government spending.

If the the tax cuts are allowed to expire so we can fix the federal debt problem, then Obama's spending needs to be severely cut as well. That means revoking every single one of his stimulus programs and health care plan for starters. Then fix the problem approximately half the population paying no income tax. If we have a national problem, the federal government needs to get serious about it's overspending and everyone needs to participate in paying off the debt.

I think this is oversimplifying the issue of managing the economy during a bad recession. Have a look at the excerpt below from an op-ed piece regarding support for stimulus spending:

Quote:

[...] Fiscal stimulus is appropriate as insurance because it is the fastest and most reliable way of encouraging short run economic growth at a time when a serious recession downturn would pressure American families, exacerbate financial strains, raise protectionist pressures and hurt the global economy.

Poorly provided fiscal stimulus can have worse side effects than the disease that is to be cured. This suggests close attention to three issues:

First, to be effective, fiscal stimulus must be timely. To be worth undertaking, it must be legislated by the middle of the year and be based on changes in taxes and benefits that can be implemented almost immediately.

Second, fiscal stimulus only works if it is spent so it must be targeted . Targeting should favour those with low incomes and those whose incomes have recently fallen for whom spending is most urgent.

Third, fiscal stimulus, to be maximally effective, must be clearly and credibly temporary – with no significant adverse impact on the deficit for more than a year or so after implementation. Otherwise it risks being counterproductive by raising the spectre of enlarged future deficits pushing up longer-term interest rates and undermining confidence and longer-term growth prospects. [...]

Why America must have a fiscal stimulus - Harvard - Belfer Center for Science and International Affairs

The idea that all stimulus spending (deficit spending) is bad is itself a bad idea. I'm not saying this is your absolute position, but you did suggest repealing all stimulus spending. The issue isn't whether stimulus spending should be repealed; I think it should be whether it's being done for the greatest benefit/impact. The points above should be what people pressure the Obama administration about, not the fact he's using stimulus spending at all.

Health care spending is another issue entirely. By saying the U.S. cannot afford some form of universal health care is admitting defeat in the face of being a part of the developed world. But like I said, that's another issue.

I find that people turn tax cuts/stimulus spending into a kind of dichotomy, which I think is the wrong way to go about it. To throw in the heath care issue will only further confuse the matter.

roachboy · 09-21-2010, 08:45 AM

so let me see if i understand this. the republicans are willing to make "fiscal responsibility" mean destroying what the obama administration has tried to do in order to deal with the economic wreckage that republican-inspired economic policy caused rather than allow the ineffectual bush-cuts to expire.

so what that does is allows the republicans to say "we're against obama" which sells better--somewhere---god knows where---than "we are shilling for insurance corporations" or "we are shilling for the koch brothers" or "we are shilling for wall street ceo's who are boo hoo poor me about the idea of having to play more taxes."

so it's got nothing to do with the principles. if fiscal responsibility meant anything substantive, the republicans would have no choice but to allow the cuts to expire.
idiocy.
simple idiocy.

Cimarron29414 · 09-21-2010, 12:50 PM

When all is said and done, taxation boils down to personal philosphy. Fruits of one's labor vs. duty of a civil society. There are always going to be examples to support both sides.

While I believe the federal government is way too big, I am not against the income tax - which is a bit of a divergence from my "party". Generally, I support a fair tax rate - somewhere around 12% to 14%, but it really needs to be the number that allows a reasonably sized government to operate. It seems it would be rather easy to calculate: Federal budget as a percentage of the nation's gross earnings(I think I have that right).

That rate applies to everyone. I don't care how many kids you have, what you gave to charity, how much you paid in mortgage interest, etc. The tax form becomes:

1) What was your gross income last year?
2) Send 12% ( or whatever) in.

I'm certain many of you have reviewed the Fair Tax philosophy and have objections to it. I'd be curious to hear those. The only one that I can think of is that 12% to a person making $19,000 is $2280. That would be money they don't currently pay to the government in income tax - and it would be a tough pill. However, that very vocal objection would hold Washington in check for responsible budgeting.

Also, this makes the tax code incredibly easy for everyone and Washington can only fiddle with one number each year. I'm sure I'm missing something, though.

Wes Mantooth · 09-21-2010, 01:17 PM

I've always looked at it that way too Cimarron and its what I was kind of getting into above about a "fair" tax for everybody. Everyone gives a certain fixed percentage of what they make to the govt and the rest is yours, no shifting the burdens, no tax cuts for one group and not another and no bickering about who has a responsibility to pay what. If you live here you have a responsibility, simple. But not having a huge grasp of economics I'm not sure what the pitfalls of that would be either, other then the rich don't pay a large enough chunk of their income and the poor pay to much. I don't know.

Of course what a fair percentage is is obviously up for debate...then we'll get into a national discussion about what the poor should really owe (anything?)...if the poor gets a pass why does the burden fall on the rich...if it doesn't fall on the rich why should the middle class have the shoulder it...and suddenly its back to politicians pushing tax cuts for their voting base and we start all over again from the beginning with business as usual.

09-13-2010, 07:42 PM	#1 (permalink)
ASU2003 immoral minority Location: Back in Ohio	Did the Bush tax cuts work? I know I didn't get any money back since I was in school back then, but has any economists looked into the effect giving tax cuts using borrowed money actually has long term? While I would say it does help the economy, either people pay off their debts or may choose to buy something they may not have. Did it cause enough stimulus to the economy to generate taxes equal to the stimulus. You have Sales tax going to help the state budgets, income taxes from the workers making the products going to the government, investments in wall street or expanding businesses by the rich (which are taxed when shareholders take profits), and it all sounds great. However, if the tax cuts are greater than the revenue it generated for the government, then we are paying interest on those tax cuts now year after year. I could also ask if this was an artificial action by the government meddling with the free market. Where would we be if the Bush tax cuts failed to pass? The economy for me wasn't that great in 2003-2004, yet my life wouldn't be impacted very much if I had to pay higher taxes now. I know this will get political, and I was debating putting it over in the Politics area. But, I am trying to look at the numbers and see if we can learn from the past. If someone else would like to make one over there to look into the games they are playing now, feel free. You can ask if there are other taxes that should be lowered or eliminated instead of these tax cuts. And is Obama going to say that the $1 trillion deficit (that may be reduced by paybacks), could have been less if the upper tax cuts expired ($700 billion/10 years I have heard estimated I think).

09-14-2010, 11:07 PM	#5 (permalink)
Seaver Junkie Location: Fort Worth, TX	Tax cuts are only effective (amount of money put back in circulation per dollar government can no longer spend) on low/middle class families. 2% reduced taxes on a 50k/yr family is relatively small, and almost immediately gets spent. However small, the sheer number of families in the Middle class ensure massive amounts of funds reinvested into the economy. 2% reduction on a multimillionaire is a massive sum, with very few people in the category. Unfortunately when someone has 2million in the bank, 100k is almost un-noticable. It doesn't get reinvested like trickle-down economics preaches, it sits in the bank. So does the tax cuts work? Yes, but there is a BIG separation in effectiveness. That's a big reason I support Obama's pledge to continue the tax cuts to people making below $250k. I'm sorry if you make more than that you have no reason whatsoever to complain in this country. __________________ "Smite the rocks with the rod of knowledge, and fountains of unstinted wealth will gush forth." - Ashbel Smith as he laid the first cornerstone of the University of Texas

09-16-2010, 06:09 AM	#8 (permalink)
Cimarron29414 Still Free Location: comfortably perched at the top of the bell curve!	The top 2% of income earners account for 25% of consumer spending. Consumer spending represents 70% of GDP. Don't underestimate the power of giving them money to spend to grow the private sector. __________________ Gives a man a halo, does mead. "Here lies The_Jazz: Killed by an ambitious, sparkly, pink butterfly."

09-16-2010, 06:42 AM	#10 (permalink)
roachboy Super Moderator Location: essex ma	if the top 2% was such an economic motor you'd think that we wouldn't be in the mess we're in. they could heroically spend our way out of it. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

09-16-2010, 06:53 AM	#12 (permalink)
roachboy Super Moderator Location: essex ma	yes. so far the tax-break driven activities of the top 2% has been an awesome success story. who in their right mind would reverse the cuts? __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

09-14-2010, 05:34 PM	#2 (permalink)
robot_parade Junkie Location: San Antonio, TX	I'm afraid I don't know of a source that discusses this without involving ideology and politics. My feeling is that the economy was fine after The Bush Tax Cuts went into effect, but it was also fine during the Clinton years of Evil High Taxes. The Bush Tax Cuts didn't prevent the housing bubble or the Great Recession, but they probably didn't cause the GR either. What they do contribute to is the long-run budget deficit. I don't think there's any plan that balances the budget and keeps TBTC intact. If you keep TBTC, you have to have massive cuts to medicare/medicaid, defense, or completely dismantle something like the department of education or department of transportation.

09-14-2010, 08:55 PM	#4 (permalink)
Willravel ... a sort of licensed troubleshooter.	No, they didn't work. Trickle-down economics is not something any serious economist would espouse as being helpful for the vast majority of people.

09-16-2010, 06:47 AM	#11 (permalink)
filtherton Junkie Location: In the land of ice and snow.	Clearly, if we suspend TBTCs for the top 2% they will stop creating all of the jobs that they're currently creating. They've been very successful in creating jobs so far .

09-16-2010, 07:49 AM	#15 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	Now I'm curious to know what the health coverage is like for this 20% of American children who live in poverty. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

09-16-2010, 08:47 AM	#17 (permalink)
FuglyStick WHEEEE! Whee! Whee! WHEEEE! Location: Southern Illinois	Bucatti Veyrons and $100 million mansions don't create jobs. That's where that tax break money is going, not into the economy. __________________ AZIZ! LIGHT!

09-16-2010, 09:23 AM	#18 (permalink)
Tully Mars Living in a Warmer Insanity Super Moderator Location: Yucatan, Mexico	Hey now this is America and everyone has an equal opportunity. All you have to do is work hard and be smart then you too can own that McMansion and Bucatti. Oh, that and the checks in the mail and I won't cum in your mouth. __________________ I used to drink to drown my sorrows, but the damned things have learned how to swim- Frida Kahlo Vice President Starkizzer Fan Club

09-16-2010, 10:06 AM	#19 (permalink)
Wes Mantooth Junkie Location: Tennessee	I by no means am an expert on economics and you will probably all be dumber for having read this post...no seriously you may just want to skip it all together... I'm not a fan of personal anecdotes to provide evidence but I'll indulge a little bit here because it might make a point for discussion. I know a fair number of wealthy people around here and one thing I've noticed about each and every one of them is they feel if they can't get the maximum benefit from the money they invest into our economy they simply are just going to find other ways to use it (They's taxin mah profits to high!!! I can't afford to hire people and I'm cutting positions left and right because my profits are razor thin kind of stuff). I have no clue what the economical advantage is to the following but it seems they'd rather just sit on the money and collect interest or send it overseas or something where they can (apparently) get more bang for the buck. I don't know how widespread this mentality is but if every wealthy bastard in the US is yanking money out of the economy to protest or avoid high taxes that doesn't seem very beneficial either. Now I don't necessarily subscribe to the above and its a very broad overview of some of the discussions I've had lately but there you go. So did the Bush tax cuts work? I have no idea, some seem to think so and others don't as best I can gather about taxes it just depends on what your personal political outlook is when it comes to what works and what doesn't. In my opinion as long as what I'm paying is fair and not crippling my bank account then I'm happy to pay it. __________________ “My god I must have missed it...its hell down here!”

09-17-2010, 11:01 AM	#21 (permalink)
Wes Mantooth Junkie Location: Tennessee	"Hank Hill, tax payer" It was a pretty common for people to be proud to pay their way in the US but I think that generation (and philosophy) is slowly dying off. People today would never sacrifice comfort for the war effort, they'd never actively participate in local politics, functions or fund raisers and they certainly don't want to sacrifice their lifestyle and personal income to pay taxes. It would almost seem the prevailing mentality these days is "that's not my responsibility" and as long as that's an acceptable way of thinking people will always demand lower taxes. I get that people want to get the most bang out of their buck and want to decide for themselves how the money they earn is spent. I get people who are upset that taxes are too high and paying them is more of a financial burden then anything else and it is important to work out a balance that both benefits us as a whole while benefiting our wallets as well. However I'll never understand the mentality behind refusing to pay anything (or as little as possible) at all and demanding the folks on the other side of the track take the responsibility. "Taxes should be paid by the rich!!!" "NO!!! We invest our money the poor need to pick up the slack!!!" How about everyone just pays their fair share and we leave it at that? __________________ “My god I must have missed it...its hell down here!”

09-18-2010, 04:17 PM	#34 (permalink)
Tully Mars Living in a Warmer Insanity Super Moderator Location: Yucatan, Mexico	I can respect that opinion even though I disagree. Personally I think a flat tax will simply add more to the growing ranks of people who live in poverty. I don't think that helps the US at all. __________________ I used to drink to drown my sorrows, but the damned things have learned how to swim- Frida Kahlo Vice President Starkizzer Fan Club

09-21-2010, 08:45 AM	#38 (permalink)
roachboy Super Moderator Location: essex ma	so let me see if i understand this. the republicans are willing to make "fiscal responsibility" mean destroying what the obama administration has tried to do in order to deal with the economic wreckage that republican-inspired economic policy caused rather than allow the ineffectual bush-cuts to expire. so what that does is allows the republicans to say "we're against obama" which sells better--somewhere---god knows where---than "we are shilling for insurance corporations" or "we are shilling for the koch brothers" or "we are shilling for wall street ceo's who are boo hoo poor me about the idea of having to play more taxes." so it's got nothing to do with the principles. if fiscal responsibility meant anything substantive, the republicans would have no choice but to allow the cuts to expire. idiocy. simple idiocy. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

09-21-2010, 12:50 PM	#39 (permalink)
Cimarron29414 Still Free Location: comfortably perched at the top of the bell curve!	When all is said and done, taxation boils down to personal philosphy. Fruits of one's labor vs. duty of a civil society. There are always going to be examples to support both sides. While I believe the federal government is way too big, I am not against the income tax - which is a bit of a divergence from my "party". Generally, I support a fair tax rate - somewhere around 12% to 14%, but it really needs to be the number that allows a reasonably sized government to operate. It seems it would be rather easy to calculate: Federal budget as a percentage of the nation's gross earnings(I think I have that right). That rate applies to everyone. I don't care how many kids you have, what you gave to charity, how much you paid in mortgage interest, etc. The tax form becomes: 1) What was your gross income last year? 2) Send 12% ( or whatever) in. I'm certain many of you have reviewed the Fair Tax philosophy and have objections to it. I'd be curious to hear those. The only one that I can think of is that 12% to a person making $19,000 is $2280. That would be money they don't currently pay to the government in income tax - and it would be a tough pill. However, that very vocal objection would hold Washington in check for responsible budgeting. Also, this makes the tax code incredibly easy for everyone and Washington can only fiddle with one number each year. I'm sure I'm missing something, though. __________________ Gives a man a halo, does mead. "Here lies The_Jazz: Killed by an ambitious, sparkly, pink butterfly."

09-21-2010, 01:17 PM	#40 (permalink)
Wes Mantooth Junkie Location: Tennessee	I've always looked at it that way too Cimarron and its what I was kind of getting into above about a "fair" tax for everybody. Everyone gives a certain fixed percentage of what they make to the govt and the rest is yours, no shifting the burdens, no tax cuts for one group and not another and no bickering about who has a responsibility to pay what. If you live here you have a responsibility, simple. But not having a huge grasp of economics I'm not sure what the pitfalls of that would be either, other then the rich don't pay a large enough chunk of their income and the poor pay to much. I don't know. Of course what a fair percentage is is obviously up for debate...then we'll get into a national discussion about what the poor should really owe (anything?)...if the poor gets a pass why does the burden fall on the rich...if it doesn't fall on the rich why should the middle class have the shoulder it...and suddenly its back to politicians pushing tax cuts for their voting base and we start all over again from the beginning with business as usual. __________________ “My god I must have missed it...its hell down here!”