If Not Supply Side then What? - Tilted Forum Project Discussion Community

aceventura3 · 10-22-2007, 10:22 AM

I am curious. Many do not believe Supply Side economics works. As I have read posts on the subject, in particular about Bush's tax cuts, it is my understanding that those who don't believe Supply Side theories don't believe that tax cuts actually benefit the economy and specifically working class and poor people.

To be clear, in my view tax policy can have three affects on the general economy. One, it stimulates the economy. Two, it is neutral. And three, it restricts economic growth. Generally in a relative high marginal tax rate environment, cutting tax rates will stimulate the economy in my view, hence the Supply Side affect. I think it is virtually impossible to have neutral tax policy. I think in rare instances raising tax rates can stimulate an economy, however this would be true in a developing economy. For example, raising tax rates in an unregulated economy would be a positive for that economy or raising tax rates to build an interstate road system would be good for the economy. However, I think in most cases raising tax rates will put a damper on economic growth. Therefore, in all most all other circumstances with relatively high marginal tax rates, lowering those tax rates will stimulate economic growth. And I believe economic growth is good for everyone participating in the economy.

So my question to those who do not believe Supply Side works, relative to how tax policy affects the economy what do you believe?

Do you think tax policy is neutral? Do you believe raising taxes stimulates the economy, and if so under what circumstances? Why don't you believe all participants in a growing economy benefits? At what point do you think tax rates would be too high?

filtherton · 10-22-2007, 01:23 PM

I don't think that economic growth is necessary automatically and/or significantly better for everyone in the economy. Supply side econ is why we have only three (or four) cops on the sex crimes squad in minneapolis, while the number of unsolved rape cases has been increasing. It's why the minnesota department of transportation tried to "front" a major, multi-year highway construction project from construction companies. It's quite possibly at least partly responsible for the 35w bridge collapsing.

I'm all for people having money to in invest and save, but i don't think that either of these things should always be the number one priority. GDP becomes less and less important when you don't have enough cops on the street, the public school system is doing less and less in the way of actual teaching, the people in charge of maintaining infrastructure don't have the money or the political will to do maintain the infrastructure, and the cost of attending public universities is sky-rocketing.

I think that supply side is often just a clever code word in reference to starve the beast policies that seek first to underfund important government programs, and then second, to point to the ineffectiveness of these programs that become ineffective because they're underfunded as evidence that we need to underfund them even more.

Supply side should be one option. Anyone who thinks it's the only way to go is a snake oil salesman.

rlbond86 · 10-22-2007, 11:16 PM

Once again regular old people think they know better than economists. The porponents of supply-side economics, for the most part, are NOT economists. Supply-side economics just makes rich people richer.

Think about it -- you have $20 million dollars. You get $1 million back in taxes. Are you going to spend that money, putting it back into the economy? No! You're going to save it, or invest it, or whatever. You aren't going to buy goods or services. That's why supply-side economics doesn't work.

Don't get it confused with trickle-down theory, though. Sometimes, a well-timed tax cut THAT DOES NOT FAVOR THE RICH but instead the middle and lower classes, can get things back in line.

Nobel Prize winner James Tobin: "Supply-side claims have been proven false by experience... [The] idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981."

Moreover, studies have shown that there is a negative correlation between low taxes and economic prosperity; that is, higher taxes actually pull the economy up, on average.

host · 10-23-2007, 12:28 AM

ace....I sooooooo deeply deplore your flawed, supply side opinions:

First...there is no sign of "Supply Side" or "Trickle Down" benefit resulting from Reagan or Bush tax cuts....quite the opposite...a dramatic trend toward wealth concentration in the U.S. since 1982:

http://www.census.gov/hhes/www/income/histinc/f04.html

ace....in our last discussion on this subject, I made the mistake of posting the year 2000 individual income tax revenue number, to support my argument and your responded, in <a href="http://www.tfproject.org/tfp/showthread.php?t=125553">post #9 :</a>

Quote:

Originally Posted by aceventura3

...Regardless of the tax cuts, taxes collected (if you agree there is a correlation to GDP, all other things being equal), would have shown a peak in 2000 during the "dot com bubble bursting" and the economy going into recession. Both events where triggered before Bush took office. Assuming no Bush tax cuts, taxes collected would have declined. No one with specificity can give exact numbers on the impact of the Bush tax cuts, good or bad. However, based on the numbers you posted, after the recession tax dollars collect went up, the economy grew, jobs were created, incomes increased. All evidence of good things resulting from the tax cuts....

I have omitted the 2000 revenue number in this list:

Quote:

CBO Data <A HREF="http://72.14.209.104/search?q=cache:LK4mcAFfc4cJ:www.cbo.gov/budget/historical.pdf+2005+revenue+tax+revenue&hl=en&gl=us&ct=clnk&cd=7#2">html</A>
Revenues by Major Source, 1962 to 2006
Individual Income Taxes

2001 $994.3 (in billions)
2002 $858.3
2003 $793.7
2004 $809.0
2005 $927.2
2006 $1,043.9

The Dow 30 index on Nov. 1, 2000...days before the Gore v. Bush election, closed at <a href="http://finance.yahoo.com/q/hp?s=%5EDJI&a=10&b=1&c=2000&d=10&e=30&f=2000&g=d">10899</a>
The Dow, all time high, was put in nearly ten months earlier, on Jan. 14, 2000, closing at <a href="http://finance.yahoo.com/q/hp?s=%5EDJI&a=00&b=1&c=2000&d=00&e=30&f=2000&g=d">11722</a> .
The Nasdaq 2000 index had peaked on March 10, 2000 at <a href="http://finance.yahoo.com/q/hp?s=%5EIXIC&a=02&b=1&c=2000&d=02&e=30&f=2000&g=d">5132</a> . On Nov. 1, 2000, the Nasdaq Index closed at <a href="http://finance.yahoo.com/q/hp?s=%5EIXIC&a=10&b=1&c=2000&d=10&e=30&f=2000&g=d">3339</a> .
The US economy had been stable until the 2000 election, but there were no "above average" capital gains tax influx to spike the 2001 tax revenue collection figure, as late 2000, two major US stock market indexes demonstrate.

Yhe economy did not officially enter recession until six weeks after the 2001 presidential inauguration:

Quote:

http://www.nber.org/cycles/recessions.html
Business Cycle Dating Committee, National Bureau of Economic Research

October 21, 2003
....On November 26, 2001, the committee determined that the peak of economic activity had occurred in March of that year. For a discussion of the committee's reasoning and the underlying evidence, see http://www.nber.org/cycles/november2001. The March 2001 peak marked the end of the expansion that began in March 1991, an expansion that lasted exactly 10 years and was the longest in the NBER's chronology. On July 16, 2003, the committee determined that a trough in economic activity occurred in November 2001. The committee's announcement of the trough is at http://www.nber.org/cycles/july2003. The trough marks the end of the recession that began in March 2001. The 2001 recession thus lasted eight months, which is somewhat less than the average duration of recessions since World War II. The postwar average, excluding the 2001 recession, is eleven months....

Quote:

http://mediamatters.org/items/200405010002
Backdating the Recession: A Report by Media Matters for America; Release date: May 3, 2004

.... NBER's president, Martin Feldstein, was a Bush campaign adviser who has long been close to the Bush family, as the National Review's Lawrence Kudlow recently noted:

Conventional thinking has Greenspan departing in 2006 and Bush appointing Harvard economist Martin Feldstein as his successor. The former Reagan economic adviser has strong ties to the administration, dating back to Papa Bush and extending through Bush Jr.'s presidential run, when he sat on the campaign's economic policy committee. Since then he has frequently briefed both the president and vice president. As president of the National Bureau of Economic Research and a prolific writer, he enjoys considerable credibility inside the economic establishment. .....

.... Sixty-two percent of Americans think the recession began under Clinton; a plurality says it is "definitely true." Only 16 percent are certain of the fact that the recession began on Bush's watch. How can so few Americans know who was president when the most recent recession began?

The answer is simple: Conservatives have waged a successful three-and-a-half year media campaign to convince the public that the recession began under Clinton. The effort began before Bush took office; Vice President-elect Dick Cheney kicked it off with a December 3, 2000, appearance on NBC's Meet the Press:

CHENEY: There's growing evidence out there, Tim, that the economy is slowing down. We're seeing it in automobile sales and a lot of other areas, earnings falling off for corporations, and we may well be on the front edge of a recession here. ...

RUSSERT: Do you think we're on the front edge of a recession?

CHENEY: I think so. ...

Two days later, FOX News Channel political contributor and former House Speaker Newt Gingrich carried Cheney's line forward on FOX, saying, "[T]here's a danger he's going to inherit a recession."[1] On December 14, 2000, former House Majority Leader Dick Armey told CNN, "[W]hen I listen to and talk to my fellow economists, they're predicting almost with a uniform voice that this new president may inherit a recession."[2] Gingrich continued the onslaught on the December 18, declaring on FOX, "I think there is a very severe danger of a recession. And I think that the Bush-Cheney administration should be planning on having inherited a recession as the farewell gift from Clinton."[3] By the time President-elect Bush and President Clinton held a brief joint media availability on December 19, the suggestion that Bush would "inherit a recession" had already taken hold, resulting in questions from a reporter to both Bush and Clinton:

REPORTER: Mr. President-elect, talking about the economy, about problems with the economy, are you going to inherit a recession from President Clinton? And, President Clinton, what are your thoughts about that? [4]

<h3>On December 21, Philadelphia Daily News columnist Sandy Grady wrote of the Bush camp's claims that a recession was already underway:

Strange, the noisy alarms by Bush & Co. about a recession. Dubya, noting California brownouts, talks of "an energy crisis bringing on a downturn." One of his economists spoke fearfully of "softness in the economy, auto sales, signs of worry." There's spin behind their gloom: "Hey, it's Clinton's fault, not ours, if the 2001 economy goes south." So Bush was visibly uncomfortable and Clinton bemused at the first press question to Dubya: "Are you going to inherit a recession from Clinton?" </h3>

Through most of 2001, the "inherited a recession" line slowed to a trickle, though during a roundtable discussion on FOX News in March, anchor Brit Hume suggested that it was Democrats who were trying to manipulate the public's impression of when the recession began:

HUME: All right, now, let me just -- let -- all of us suggest that the deeper meaning of the argument being mounted, it's a silly economic argument, that you could talk the economy into a recession. But it -- might it work, Juan, as a way of making this the Bush recession rather than the Clinton recession inherited by Bush?

WILLIAMS: Yes, and -- but it's not silly to say you can't talk yourself into trouble, because you can lower consumer confidence. .....

<h3>Bush cut taxes retroactively in 2001:</h3>

Quote:

http://archives.cnn.com/2001/ALLPOLI....04/index.html
Bush praises Congress for passing tax cut

May 26, 2001

WASHINGTON (CNN) -- President Bush interrupted his Memorial Day weekend to return to the White House and praise lawmakers for passing a bill that "cuts income taxes for everyone who pays them."

Bush returned from Camp David as the U.S. Senate followed the House to <h3>pass a $1.35 trillion tax cut that will take effect over the next 10 years.</h3> A major tax cut was the centerpiece of Bush's campaign.

"For this year's first installment of the tax cut, the check will literally be in the mail," Bush said, speaking of the rebate checks that will go out to taxpayers beginning next month. ....

<h3>...and the US Treasury debt increase trend reversed...on it's way toward the current added Bush era deficit of $3.3 trillion:</h3>

Quote:

http://www.treasurydirect.gov/govt/r...t/histdebt.htm

09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/30/2001 $5,807,463,412,200.06 Bush Tax Cuts begin
09/30/2000 $5,674,178,209,886.86
09/30/1999 $5,656,270,901,615.43
09/30/1998 $5,526,193,008,897.62

<h3>IMO, The White House's own Treasury Report, Make a Convincing Argument that the Notion That "tax cuts pay for themselves"....is Ridiculous....</h3>

Quote:

http://www.treasury.gov/press/releas...july252006.pdf
Office of Tax Analysis
U.S. Department of the Treasury
A Dynamic Analysis of Permanent Extension
of the President’s Tax Relief
July 25, 2006

Executive Summary
This Report presents a detailed description of Treasury’s dynamic analysis of the President’s
proposal to permanently extend the tax relief provisions enacted in 2001 and 2003 that are
currently set to expire at the end of 2010.....

Different Components of Tax Relief Have Different Effects on the Economy
Treasury’s dynamic analysis of the President’s tax relief indicates that <h3>making the tax relief
permanent can be expected to increase the level of annual output (i.e., national income)
ultimately by about 0.7 percent....</h3>

Financing Tax Relief – Government Spending Reductions over Increased Tax Rates

The analysis reveals that the long-run effects of these policies depend crucially on whether they
are financed by lower spending or higher taxes in the future and are sensitive to assumptions on
underlying parameters. <h3>The issue of how, or even if, these policies need to be financed remains a
source of discussion among economists. The analysis presented here suggests these policies will
result in substantially more economic activity if they are financed by</h3> a future reduction in
government spending than if they are financed by future tax increases.............. (page ii )

A Dynamic Analysis of Permanent Extension of the President’s Tax Relief

1. Introduction
This Report presents a detailed description of Treasury’s dynamic analysis of the President’s
proposal to permanently extend the tax relief provisions enacted in 2001 and 2003 that are
currently set to expire at the end of 2010. These provisions include the lower tax rates on
ordinary income, the lower tax rates on dividends and capital gains, the 10-percent individual
income tax rate bracket, a doubling of the child tax credit, and a reduction in marriage tax
penalties.
Tax relief can be important when the economy is performing below its full potential, and can
increase its potential in the longer term. In 2003, real GDP was below its potential level and the
unemployment rate was elevated. The tax relief enacted in 2001 and 2003, together with
reductions in short-term interest rates by the Federal Reserve, helped stimulate economic growth
and move the economy out of the 2001 recession more quickly. Previous Treasury analysis
using the Macroeconomic Advisers macro-econometric model estimated that without the tax
relief passed in 2001, 2002, and 2003, as many as 3 million fewer jobs would have been created
by the end of 2004 and real GDP would have been as much as 3.5 to 4.0 percent lower.

....For example, the model ignores cyclical disruptions in the
employment of capital and labor, assuming instead that all resources in the economy are always
fully employed. The model includes a relatively simple representation of international capital
flows in which capital is only somewhat mobile internationally. There is no uncertainty in the

.....................(page 1 )

model and households and firms exhibit perfect foresight regarding future prices and tax rates.
These are areas for future development.
This analysis shows the likely economic effects of making the tax relief permanent. The results
indicate that the level of annual output (i.e., national income) may ultimately be higher by 0.7
percent because of the combined effects of the President’s tax relief.
The analysis also shows separately the effects of the President’s tax relief in three parts
reflecting: 1) the lower tax rates on dividends and capital gains; 2) the lower tax rates on
ordinary income (i.e., the top four rate brackets); and 3) the 10-percent tax rate bracket, higher
child tax credit, and marriage penalty relief. This decomposition reveals that the tax relief
components are likely to have very different effects on future economic activity. For example,
extending just the lower tax rates on dividends and capital gains increases output in the long run
by 0.4 percent, but when the lower tax rates for the four top income tax brackets are extended as
well, output increases by a total of 1.1 percent in the long run. Extending the remainder of the
tax relief – the 10 percent rate, the expansion of the child tax credit, and the reduction in
marriage penalties – stimulated economic activity during and immediately after the recession and
served other purposes, such as making the tax code more progressive. However, these elements
of the tax relief do not have positive growth effects in the longer term in ways that this type of
model can measure.
The analysis reveals that the long-run effects of these policies depend crucially on how they are
eventually financed and are sensitive to assumptions on underlying parameters. The issue of
how, or even if, these policies need to be financed remains a source of discussion among
economists. The analysis presented here suggests these policies will result in substantially more
economic activity if they are financed by a future reduction in government spending than if they
are financed by future tax increases. If the tax relief is financed by future tax increases – that is,
if the tax relief is temporary – it may well result in lower output in the long run. In effect, the
temporary tax relief must be paid back with interest through future tax increases, which implies
that future tax rates increase compared to current law. For that reason, the Administration has
emphasized permanence for the tax relief and spending restraint in its Budgets. The sensitivity
of the results to financing and parameter assumptions is described in detail below.......(Page 2 )

continued from preceding quote box:

Quote:

http://www.treasury.gov/press/releas...july252006.pdf

2. Effect of the President’s Tax Relief in the Near Term
The focus of this Report is on the future economic effects of permanently extending the
President’s tax relief. As described in the introduction, the model used for this analysis assumes
that the economy is always performing at its potential. This assumption simplifies the model and
allows for a more detailed representation of household labor supply and savings behavior in both
the near term and the long run. Yet this simplification implies the model used for this report is
not able to capture the short-run stimulus that tax relief may provide when the economy is
operating below potential. Such a situation existed when the President’s tax relief was passed in
2001 and 2003; real GDP was below its potential level and the unemployment rate was elevated.
The Treasury Department previously compared how the economy would have performed if there
had been no tax relief using a different type of model that is designed to capture the interactions
of economic sectors as the economy fluctuates around its potential growth path. These models
attempt to account for changes in the level and growth of GDP, employment, inflation, and
interest rates. Short-run changes in monetary and fiscal policies are important determinants of
accelerations and deceleration of employment and output in these models. In this earlier
analysis, the Treasury Department used the Macroeconomic Advisers macroeconometric model
to estimate how the economy would have performed had there been no legislated fiscal stimulus
from 2001 through 2004. This analysis found that the tax relief increased employment and
output substantially above what would have occurred otherwise.
Specifically, Treasury found that, without enactment of the Economic Growth and Tax Relief
Reconciliation Act of 2001, the Job Creation and Worker Assistance Act of 2002, and the Jobs
and Growth Tax Relief Reconciliation Act of 2003: (1) by the second quarter of 2003, the
economy would have created as many as 1.5 million fewer jobs and GDP would have been as
much as 2 percent lower, and (2) by the end of 2004, the economy would have created as many
as 3 million fewer jobs and real GDP would be as much as 3.5 to 4.0 percent lower.
Note that the analysis described in this section estimates the economic effects that the President’s
tax relief has already had on the economy, assuming that interest rates followed the same path as
they did historically from 2001 forward. The remainder of the paper discusses the likely future
economic effects of making the President’s tax relief permanent. ..............( page 3 )

5. Description of results
As described above, results are presented assuming that the tax relief is financed either through a
future decrease in government spending or a future increase in taxes. The first year in the model
is set to be 2007. Households and firms in the tax relief simulations anticipate the future
continuation of lower tax rates after 2010 and the offsetting fiscal policy of reducing government
consumption or increasing tax rates beyond the budget window. However, the macroeconomic
effects for the first four years of the budget window (2007-2010) are generally small as tax rates
do not change between the different simulations for those years. Results are presented in Tables
3 and 4, and discussed below for only the last six years of the budget window (2011-2016) and
for the long run............................................ (page 9 )

6. Conclusion
The analysis presented in the paper suggests that permanently extending the President’s tax relief
enacted in 2001 and 2003 likely would lead to a long-run increase in the capital stock and an
increase in national output in both the short run and the long run. If the revenue cost of that tax
relief is offset by reducing future government spending, <h3>the increase in output is likely be about
0.7 percent under plausible assumptions......................</h3> (page 13 )

Quote:

http://www.cbpp.org/7-11-06bud.htm
July 11, 2006

A SMOKING GUN: PRESIDENT’S CLAIM THAT TAX CUTS PAY FOR THEMSELVES REFUTED BY ADMINISTRATION’S OWN ANALYSIS
By James Horney

........Even if an increase in the level of economic output of 0.7 percent ultimately were to result from making the tax cuts permanent (the Treasury analysis concedes that the effect would be much smaller if the tax cuts are not paid for by cuts in spending[5]), and were to occur much sooner than Treasury seems to assume (it is not clear what the Treasury means by long-run, but it probably is considerably more than 10 years), the effect of this assumed additional economic growth would be to offset only a tiny fraction of the cost of the President’s tax cuts. <h3>For instance, a 0.7 percent increase in the economic output that the Congressional Budget Office has projected for 2016 would represent an additional $146 billion.[6] If new revenues equaled as much as 20 percent of the additional output, the increase in revenues resulting from making the tax cuts permanent (assuming Treasury’s best-case assumptions) would be $29 billion.</h3> That amount represents less than 10 percent of the $314 billion that the
Joint Committee on Taxation estimates extending the tax cuts will reduce revenues in 2016 (not counting the effects of extending Alternative Minimum Tax relief).

Thus, even if the Treasury’s most optimistic assumptions are accepted (and the dynamic effect is assumed to happen much more quickly than even Treasury seems to assume), <h2>the cost of the tax cuts in 2016 — taking into account “dynamic” effects — would still be more than 90 percent of the cost of the tax cuts under the standard cost estimates.</h2>

Quote:

http://www.nytimes.com/2005/10/11/po...=1&oref=slogin
By JASON DePARLE
Published: October 11, 2005

....But what looked like a chance to talk up new programs is fast becoming a scramble to save the old ones.

Conservatives have already used the storm for causes of their own, like suspending requirements that federal contractors have affirmative action plans and pay locally prevailing wages. And with federal costs for rebuilding the Gulf Coast estimated at up to $200 billion, Congressional Republican leaders are pushing for spending cuts, with programs like Medicaid and food stamps especially vulnerable.

<h3>"We've had a stunning reversal in just a few weeks," said Robert Greenstein, director of the Center on Budget and Policy Priorities, a liberal advocacy group in Washington. "We've gone from a situation in which we might have a long-overdue debate on deep poverty to the possibility, perhaps even the likelihood, that low-income people will be asked to bear the costs. I would find it unimaginable if it wasn't actually happening."</h3>

Mr. Greenstein's comments were echoed by Representative Rosa DeLauro, Democrat of Connecticut: "Poor people are going to get the short end of the stick, despite all the public sympathy. That's a great irony.".....

....Indeed, even as he was calling for deep spending cuts last week, Representative Mike Pence, <h2>Republican of Indiana, who leads the conservative caucus, called tax reductions for the prosperous a key to fighting poverty.</h2>

"Raising taxes in the wake of a national catastrophe would imperil the very economic growth we need to bring the Gulf Coast back," Mr. Pence said. "I'm mindful of what a pipe fitter once said to President Reagan: 'I've never been hired by a poor man.' A growing economy is in the interest of every working American, regardless of their income."

Economic growth is crucial to reducing poverty, but the effect of tax rates is less clear. In 1993, President Bill Clinton raised taxes on upper-income families, the economy boomed and poverty fell for the next seven years. <h3>In 2001, President Bush cut taxes deeply, but even with economic growth, the poverty rate has risen every year since.

In 2004, about 12.7 percent of the country, or 37 million people, lived below the poverty line, which was about $19,200 for a family of four. The figure was 7.8 percent among whites, 24.7 percent among blacks and 21.9 percent among Hispanics.</h3>

Hurricane Katrina gave those figures a face as no statistic can.

"As all of us saw on television, there is also some deep, persistent poverty in this region," with "roots in a history of racial discrimination," President Bush said in a Sept. 15 speech from New Orleans. Using the language of the civil rights movement, Mr. Bush pledged "not just to cope, but to overcome."

But liberal critics say his policies will have the opposite effect.

The week before his speech, Mr. Bush suspended the Davis-Bacon Act, a 1931 law that prohibits federally financed construction jobs from paying wages less than a local average. The administration argued that the suspension, which applied only to storm areas, would benefit local residents by stretching financial resources.

Critics said the savings would come at the expense of needy workers.

Likewise, the president suspended rules requiring federal contractors to file affirmative action plans, which his allies called cumbersome.....

<h2>In the Budget Year Ended Sept. 30, 2000...for the first time since 1983...only $18 billion of the annual surplus Social Security Tax Collection was needed to balance the budget...then came Bush and his "Supply Side" lie....and the tax cutting began.....</h2>

Quote:

http://www.washingtonpost.com/ac2/wp...nguage=printer
Revamping Social Security
Experts Disagree on Severity of Shortfall's Consequences

By Jonathan Weisman
Washington Post Staff Writer
Sunday, January 2, 2005; Page A08

... The problem, rather, is facing the whole government, not just Social Security. When payroll taxes were last raised, <h3>in 1983, Congress knew that new revenue would be used to reduce the budget deficit, not saved to fund future obligations.</h3> But when the time came to pay back Social Security, it was understood that the burden would be shared by taxpayers and the government at large, said Dean Baker, co-director of the Center for Economic and Policy Research, who dubbed Social Security "the phony crisis" in a 1999 book by that title.

"They deliberately raised the Social Security tax, an extremely regressive tax, to supposedly pre-fund Social Security," Baker said. "If Congress had said that money would be used to fund the government, then cut from Social Security when the time came to redeem those bonds, they would have been run out of town."

"Morally, this has to be seen as a burden that falls on the general government," Baker concluded. ....

<h3>The preceding research collides with the following propaganda to expose what this "message" from Bush, et al...is about. A relentless drive to transfer even more wealth to the republican patrons, and to drown the government in a level of debt that will destroy Social Security....the opposite of the structure set up by Greenspan's SSI "reform committee, in 1983....the goal was to raise SSI taxes to a level higher than needed to sustain the program in the near term...with the surplus collected to be used to pay down the budget deficit...putting the government in a stronger fiscal position to respond to the demands on SSI from baby boomer retirement:</h3>

Quote:

http://www.whitehouse.gov/news/relea...0060711-1.html
For Immediate Release
Office of the Press Secretary
July 11, 2006

President Bush Discusses Mid-Session Review
East Room

Fact sheet Fact Sheet: Strong Economic Growth and Fiscal Discipline Help Reduce Budget Deficit
Fact sheet In Focus: Jobs & Economy

THE PRESIDENT:....Some in Washington say we had to choose between cutting taxes and cutting the deficit. You might remember those debates. You endured that rhetoric hour after hour on the floor of the Senate and the House. Today's numbers show that that was a false choice. The economic growth fueled by tax relief has helped send our tax revenues soaring. That's what's happened.....

President's Radio Address
This week's numbers show that this is a false choice. The economic growth fueled by tax relief has helped send tax revenues soaring. When the economy grows, ...
http://www.whitehouse.gov/news/relea.../20060715.html - 23k - Cached - Similar pages - Note this

President Bush Discusses Mid-Session Review
Today's numbers show that that was a false choice. The economic growth fueled by tax relief has helped send our tax revenues soaring. ...
http://www.whitehouse.gov/news/relea...0060711-1.html - 34k - Cached - Similar pages - Note this
[ More results from www.whitehouse.gov ]

President Discusses 2007 Budget and Deficit Reduction in New Hampshire
<h3>You cut taxes and the tax revenues increase. See, some people are going to say, well, you cut taxes, you're going to have less revenue. ...</h3>
http://www.whitehouse.gov/news/relea...0060208-7.html

<h3>Remarks by the Vice President on the 2006 Agenda
The evidence is in, it's time for everyone to admit that sensible tax cuts increase economic growth, and add to the federal treasury.</h3> (Applause.) ...
http://www.whitehouse.gov/news/relea...0060209-9.html - 37k

Quote:

USATODAY.com - Tax cuts make money
Tax cuts make money. By Bill Frist. Many people in Washington have long known a dirty little secret about tax-cut measures: When done right, they actually ...
http://www.usatoday.com/news/opinion...e-oppose_x.htm

Quote:

http://www.c-spanarchives.org/congre...531&id=7482745
Text From the Congressional Record 2006-07-12

Mr. EMANUEL. Mr. Speaker, with very much fanfare yesterday, the President held a press conference to claim vindication for his economic stewardship and his fiscal policies.

Now, here is what Greg Mankiw, the President's former Chief Economic Adviser, said about the President's claim that his tax cuts can be paid for and actually help on the economy: `<h3>`There is no credible evidence'' that ``tax revenues rise in the face of lower tax rates.''</h3> That is the President's own economic adviser. He went on to compare an economist who says that tax cuts can pay for themselves to a ``snake oil salesman trying to sell a miracle cure.''

The Economist magazine recently wrote, ``Even by the standards of political boosterism, this is extraordinary. <h3>No serious economist believes President Bush's tax cuts will pay for themselves.''</h3>

Quote:

http://www.federalreserve.gov/PUBS/F.../200561pap.pdf
(Page 2)

How Did the 2003 Dividend Tax Cut Affect Stock Prices?
Gene Amromin1, Paul Harrison2, Steven Sharpe3
First draft: October 11, 2005
This draft: May 29, 2006
Abstract

We test the hypothesis that the 2003 dividend tax cut boosted U.S. stock prices and thus
lowered the cost of equity. Using an event-study methodology, we attempt to identify an
aggregate stock market effect by comparing the behavior of U.S. common stock prices to
that of European stocks and real estate investment trusts. We also examine the relative
cross-sectional response of prices on high-dividend versus low-dividend paying stocks.

<h3>We do not find any imprint of the dividend tax cut news on the value of the aggregate
U.S. stock market.</h3> On the other hand, high-dividend stocks outperformed low-dividend
stocks by a few percentage points over the event windows, suggesting that the tax cut did
induce asset reallocation within equity portfolios. Finally, the positive abnormal returns
on non-dividend paying U.S. stocks in 2003 do not appear to be tied to tax-cut news.

1 Federal Reserve Bank of Chicago
2 Barclays Global Investors, San Francisco
3 Federal Reserve Board of Governors
* Corresponding author: Steven Sharpe, 20th and C St. NW, Washington DC, 20551.
ssharpe@frb.gov.
The views expressed are those of the authors and not necessarily those of the Federal
Reserve Board, the Federal Reserve Bank of Chicago, or Barclays Global Investors. We
thank Nellie Liang and John Graham for helpful comments. We are indebted to Nicholas Ryan
for his excellent and extensive research assistance.

Rekna · 10-23-2007, 05:34 AM

Why tax when you can borrow......

Cynthetiq · 10-23-2007, 06:13 AM

Quote:

Originally Posted by host

ace....I sooooooo deeply deplore your flawed, supply side opinions:

First...there is no sign of "Supply Side" or "Trickle Down" benefit resulting from Reagan or Bush tax cuts....quite the opposite...a dramatic trend toward wealth concentration in the U.S. since 1982:

http://www.census.gov/hhes/www/income/histinc/f04.html

Please explain how this single citation shows the dramatic trend. I see a bunch of GINI columns and numbers that mean nothing to me.

aceventura3 · 10-23-2007, 07:23 AM

I already know that many of you don't think Supply Side Economics can contribute to economic growth. And I agree that it won't under some circumstances. I am more interested in understanding what you think works. If cutting taxes doesn't contribute to economic growth, what does? What impact does tax policy have on economic growth? Is government more efficient at creating economic growth than the private sector? If like rlbond86 posted, if higher taxes lead to economic growth, would that be true up to a 100% tax rate? Where do you think the best rate would be?

Ustwo · 10-23-2007, 07:44 AM

Quote:

Originally Posted by rlbond86

Moreover, studies have shown that there is a negative correlation between low taxes and economic prosperity; that is, higher taxes actually pull the economy up, on average.

Nothing says 'I'm in school and never had a real job' like this statement, and I don't even know anything about you.

Seriously, no.

Rekna · 10-23-2007, 08:09 AM

Wasn't the new deal one of the best programs in the history of the United States for economic growth? That is a perfect example of government programs creating economic growth. Job creation creates economic growth and taxes should correlate to job creation. Now of course this isn't always the case.

shakran · 10-23-2007, 08:17 AM

The trouble with supply side is that it's a great idea on paper. But then so is socialism. Both systems fail to take into account human nature. People always want equality, but want to be more equal than the rest of the unwashed masses. So you end up with (in socialism) the wealth concentrated in the Party, or (in trickledown) the wealth not actually trickling down. The rich didn't generally get rich by spending craploads of cash. Most wealthy people are actually pretty frugal. Those who aren't, such as certain celebrities, generally don't spend their money in ways that will help the economy. Buying a Ferrari is great for Italy, but doesn't do quite as much for the USA.

We instead need a fair taxation system that taxes people equally on their ability to pay. Someone pulling in millions of dollars a year can afford to pay quite a bit more than someone pulling in 40,000. They're benefiting from the American financial system, they should pay in to it as well. Balance out the tax burden, we'd end up with more money in government coffers, which would lead to better public services.

I'd say more, but I'm late for work

Ustwo · 10-23-2007, 08:18 AM

Quote:

Originally Posted by Rekna

Wasn't the new deal one of the best programs in the history of the United States for economic growth? That is a perfect example of government programs creating economic growth. Job creation creates economic growth and taxes should correlate to job creation. Now of course this isn't always the case.

Even my liberal history teacher in high school taught that the new deal did very little to stimulate the economy, and was mostly a feel good package to make people feel the government was doing SOMETHING. It was really the just normal recovery and the war which got the economy moving in full force. Plus right after the war, most of the competition to the US was bombed out. We became the defacto powerhouse.

samcol · 10-23-2007, 08:19 AM

Quote:

Originally Posted by Rekna

Wasn't the new deal one of the best programs in the history of the United States for economic growth? That is a perfect example of government programs creating economic growth. Job creation creates economic growth and taxes should correlate to job creation. Now of course this isn't always the case.

The looming World War created the economic boom, not higher taxes.

roachboy · 10-23-2007, 09:32 AM

i dont really have time for this at the moment, so i'll only post a couple short statements and return to the thread later.

1. you can't isolate tax policies from the larger neoliberal economic ideology that situate them. "supply side" is a cocktail napkin diagram that functions as a popularizing meme/name for some aspects of neoliberalism--but who get to see the whole foul package of neoliberalism on display at the structural adjustment show nearest you.

as ustwo's posts show, a neoliberal perspective does nto enable you to say anything coherent about the new deal in particular, or about keynesian economic ideology more generally--so presumably the period after world war 2, which saw the most coherent and functional phase of capital accumulation yet, and which was shaped by keynesian policies, is a giant accident which simply functioned long enough to prevent collapse, only to be rescued from itself by the mighty ronald reagan and the laffer curve.

2. there is no doubt that the period of supply side hoodoo has generated the largest transfer of wealth into the hands of the economic elite in history. the stats on this are easy to find. so now, thanks to supplyside, the us has a distribution of wealth on par with that of guatemala. way to go.

i see the ideology responsible for this travesty as not about what it says it is about: it is not about tax cuts as a way to stimulate economic activity in general, simply because tax cuts in supplyside world do not operate in isolation--it is about the dismantling of mechanisms that purchase political consent and social solidarity within capitalism as a device to cope with increased uncertainty (globalizing capitalism) by decreasing political risk. it is an abandonment of any sense that capitalism is a destructive system--which is self-evidently is (even if you see it as "creative destruction" in the schumpeter mode)...because supplyside also treats as axiomatic that capital generates wealth and not labor, its tactic regarding taxation is to build (fictive) cash reserves for the holders of capital with the idea that they will invest it in new forms of economic activity--as if the present holders of capital and "entrepreneurs" are the same social group (which isnt true)....

supplyside reflects a wholesale devaluation (in the ideological and material senses) of labor, replacing it with fantasies of capital on its own as the motor of all things; neoliberals prefer to pretend that the economy really is separate from all other areas of social activity (wholly untenable) primarily as a way to avoiding social and political consequences of their own policies.

neoliberals might not like the state as a mechanism for redistributing wealth, but they sure do like like all the repressive functions of the state. they regard trade unions as Evil and all public political action as hooliganism. so the consequences of neoliberal policies are criminalized, and expressions of dissent treated as evidence of fifth column activity. this is of a piece with the ludicrous position regarding poverty as a reflection of some moral failing on the part of the poor.

the position on taxation popularized via laffer's cocktail napkin drawing is only a small part of the problem that is neoliberalism. you cant isolate taxation from the rest of it.

aceventura3 · 10-23-2007, 10:52 AM

Complexities of theoretical arguments can be confusing. But on a base level you either have economic growth stimulated by government or by the private sector. I think that is a given, if it is wrong I am open to the other possibilities.

Given economic growth from government activity, the government taxes and then spends the money. If government spends the money people benefit. There is a long-term benefit if the government spends the money on productive things, for example building a bridge to no where helps create jobs during construction of the bridge. But building a bridge linking two commercial hubs not only gives the short-term benefit of jobs but the long-term benefit of enhancing trade between the hubs. I don't know any Supply Sider who would say tax rates should be 0 or that there is no role for government in creating economic growth.

At some point government will become inefficient at putting taxed dollars to productive use compared to the private sector. Supply Sider would argue at this point tax cuts would stimulate the economy. It seems that many of you are saying Supply Side never works, is this true?

P.S. - I am also curious about why anyone would think economic growth stimulated by government would mean that "wealthy people" would get less of a benefit compared to economic growth stimulated by the private sector? Seems to me - it won't matter where the growth comes from - "wealthy people" will get their share first. After all- in my bridge analogy - the company that gets the contract to build the bridge is going to get profits regardless of who pays the bill.

roachboy · 10-23-2007, 11:08 AM

circular, ace. you insist on operating entirely within the framework for thinking about taxation and economic activity that neoliberalism makes avaialble for you to use. so one way of looking at this thread is that you are trying to see if other ways of thinking about economic activity, other ways of considering the relations of the state to system activity, can be assimilated into the single perspective that you bring to the table.

in my view, the problem is that perspective itself.

you cant just swat that away by saying "theoretical discussions can be confusing" because if you want a dialogue, it is necessarily a theoretical one--and the claim that you own perspective prevents you from seeing anything not already processed in its own terms, is also a theoretical claim.

the irony is that neoliberalism is entirely theoretical, it is most coherent when it is not applied, when it sits on paper, when its reference points are not damage done in the world, but older theoretical models of capitalist political economy.

aceventura3 · 10-23-2007, 11:31 AM

Quote:

Originally Posted by roachboy

circular, ace. you insist on operating entirely within the framework for thinking about taxation and economic activity that neoliberalism makes avaialble for you to use. so one way of looking at this thread is that you are trying to see if other ways of thinking about economic activity, other ways of considering the relations of the state to system activity, can be assimilated into the single perspective that you bring to the table.

I know what my perspective is. I am pretty much asking people to tell me what their perspective is as opposed to telling me that my perspective is wrong. If Supply Side is a farce, tell me what is real. My perspective is - which is a perspective shared by Laffer (and he gives credit to Keynes) is that somewhere between 0% and 100% tax rates tax collections and economic growth are maximized.

Quote:

in my view, the problem is that perspective itself.

you cant just swat that away by saying "theoretical discussions can be confusing" because if you want a dialogue, it is necessarily a theoretical one--and the claim that you own perspective prevents you from seeing anything not already processed in its own terms, is also a theoretical claim.

I have not swatted anything away, I am merely asking questions and giving my perspective.

Quote:

the irony is that neoliberalism is entirely theoretical, it is most coherent when it is not applied, when it sits on paper, when its reference points are not damage done in the world, but older theoretical models of capitalist political economy.

What economic theory is not theoretical? I guess that is a circular question.

Byrnison · 10-23-2007, 11:45 AM

Quote:

Originally Posted by shakran

We instead need a fair taxation system that taxes people equally on their ability to pay. Someone pulling in millions of dollars a year can afford to pay quite a bit more than someone pulling in 40,000. They're benefiting from the American financial system, they should pay in to it as well. Balance out the tax burden, we'd end up with more money in government coffers, which would lead to better public services.

I hesitate to jump into a Tilted Politics discussion

, but I too am curious as to Ace's question as to what tax rates at what income levels would be best, and more so why do you see it that way? Shakran's post got me curious about the tax burden question, and what I found was:

Source: http://www.taxfoundation.org/news/show/323.html
<strong>Table 4.</strong> Before and After the Bush Tax Cuts, by Income Group</p><table border="1" cellpadding="0" cellspacing="0" width="90%"><tbody><tr><td colspan="2" width="418"><div align="center"><strong>Before Bush Tax Cuts</strong></div></td><td colspan="3" width="329"><div align="center"><strong>After Bush Tax Cuts</strong></div></td></tr><tr><td width="285"><div align="center"><strong></strong></div></td><td width="133"><div align="center"><strong>Share of Tax Liability</strong></div></td><td width="135"><div align="center"><strong>Tax Reduction for 2004</strong></div></td><td width="102"><div align="center"><strong>Share of Tax Liability</strong></div></td><td width="92"><div align="center"><strong>Share of Tax Cuts</strong></div></td></tr><tr><td width="285">Bottom 20%, $0 to $14,415</td><td width="133"><div align="right">0.50%</div></td><td width="135"><div align="right">$1,976,256,511 </div></td><td width="102"><div align="right">0.30%</div></td><td width="92"><div align="right">1.20%</div></td></tr><tr><td width="285">Second 20%, $14,415 to $25,499</td><td width="133"><div align="right">2.30%</div></td><td width="135"><div align="right">$7,177,358,834 </div></td><td width="102"><div align="right">1.90%</div></td><td width="92"><div align="right">4.20%</div></td></tr><tr><td width="285">Third 20%, $25,500 to $41,640</td><td width="133"><div align="right">5.90%</div></td><td width="135"><div align="right">$15,905,120,495 </div></td><td width="102"><div align="right">5.20%</div></td><td width="92"><div align="right">9.40%</div></td></tr><tr><td width="285">Fourth 20%, $41,641 to $68,295</td><td width="133"><div align="right">12.60%</div></td><td width="135"><div align="right">$29,559,373,144 </div></td><td width="102"><div align="right">11.60%</div></td><td width="92"><div align="right">17.50%</div></td></tr><tr><td width="285">Top 20%, $68,296 and above</td><td width="133"><div align="right">78.70%</div></td><td width="135"><div align="right">$114,633,332,724 </div></td><td width="102"><div align="right">81.00%</div></td><td width="92"><div align="right">67.70%</div></td></tr><tr><td width="285">Total Tax Liability for all taxpayers</td><td width="133"><div align="right">100.00%</div></td><td width="135"><div align="right">$169,251,441,709 </div></td><td width="102"><div align="right">100.00%</div></td><td width="92"><div align="right">100.00%</div></td></tr><tr><td width="285"></td><td width="133"></td><td width="135"></td><td width="102"></td><td width="92"></td></tr><tr><td colspan="2" width="418"><p align="center"><strong>Top 20%</strong></p></td><td colspan="3" width="329"><div align="center"><strong>Top 20%</strong></div></td></tr><tr><td width="285">First Half of top 10%, $68,296 to $97,685</td><td width="133"><div align="right">11.90%</div></td><td width="135"><div align="right">$26,272,937,254 </div></td><td width="102"><div align="right">11.20%</div></td><td width="92"><div align="right">15.50%</div></td></tr><tr><td width="285">Second Half of Top 10%, $97,685 to $136,162</td><td width="133"><div align="right">10.80%</div></td><td width="135"><div align="right">$18,560,111,502 </div></td><td width="102"><div align="right">10.80%</div></td><td width="92"><div align="right">11.00%</div></td></tr><tr><td width="285">Top 20-5%, $68,296 to $136,162</td><td width="133"><div align="right">22.80%</div></td><td width="135"><div align="right">$44,833,048,756 </div></td><td width="102"><div align="right">22.00%</div></td><td width="92"><div align="right">26.50%</div></td></tr><tr><td width="285">Top 5-1%, $136,163 to $335,474</td><td width="133"><div align="right">18.90%</div></td><td width="135"><div align="right">$25,482,868,099 </div></td><td width="102"><div align="right">19.70%</div></td><td width="92"><div align="right">15.10%</div></td></tr><tr><td width="285">Top 1%, $335,475 and above</td><td width="133"><div align="right">37.10%</div></td><td width="135"><div align="right">$44,317,415,869 </div></td><td width="102"><div align="right">39.30%</div></td><td width="92"><div align="right">26.20%</div></td></tr><tr><td width="285">Total Tax Liability for Top 20% of Taxpayers</td><td width="133"><div align="right">78.70%</div></td><td width="135"><div align="right">$114,633,332,724 </div></td><td width="102"><div align="right">81.00%</div></td><td width="92"><div align="right">67.70%</div></td></tr></tbody></table>

Source: http://www.taxfoundation.org/publications/show/250.html
(below years snipped to try to save space)
Table 4.</strong> Total Income Tax after Credits, 1980-2005 ($ Millions) </p><table border="1" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td width="5%"><p align="center"><font size="1">Year </font></p></td><td width="8%"><p align="center"><font size="1">Total </font></p></td><td width="8%"><p align="center"><font size="1">Top 1% </font></p></td><td width="8%"><p align="center"><font size="1">Top 2-5% </font></p></td><td width="8%"><p align="center"><font size="1">Top 5% </font></p></td><td width="8%"><p align="center"><font size="1">Top 6-10% </font></p></td><td width="8%"><p align="center"><font size="1">Top 10% </font></p></td><td width="8%"><p align="center"><font size="1">Top 11-25% </font></p></td><td width="8%"><p align="center"><font size="1">Top 25% </font></p></td><td width="8%"><p align="center"><font size="1">Top 26-50% </font></p></td><td width="8%"><p align="center"><font size="1">Top 50% </font></p></td><td width="8%"><p align="center"><font size="1">Bottom 50% </font></p></td></tr><tr><td width="5%"><p align="right"><font size="1">2003 </font></p></td><td width="8%"><p align="right"><font size="1">747,939 </font></p></td><td width="8%"><p align="right"><font size="1">256,340 </font></p></td><td width="8%"><p align="right"><font size="1">150,257 </font></p></td><td width="8%"><p align="right"><font size="1">406,597 </font></p></td><td width="8%"><p align="right"><font size="1">85,855 </font></p></td><td width="8%"><p align="right"><font size="1">492,452 </font></p></td><td width="8%"><p align="right"><font size="1">134,928 </font></p></td><td width="8%"><p align="right"><font size="1">627,380 </font></p></td><td width="8%"><p align="right"><font size="1">94,647 </font></p></td><td width="8%"><p align="right"><font size="1">722,027 </font></p></td><td width="8%"><p align="right"><font size="1">25,912 </font></p></td></tr><tr><td width="5%"><p align="right"><font size="1">2004 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">831,890 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">306,902 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">168,322 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">475,224 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">92,049 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">567,273 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">138,642 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">705,915 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">98,556 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">804,471 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">27,419</font> </p></td></tr><tr><td><p align="right"><font size="1">2005 </font></p></td><td><p align="right"><font size="1">934,703 </font></p></td><td><p align="right"><font size="1">368,132</font></p></td><td><font size="1"><p align="right"><font size="1">189,627 </font></p></font></td><td><p align="right"><font size="1">557,759 </font></p></td><td><p align="right"><font size="1">99,326 </font></p></td><td><p align="right"><font size="1">657,085 </font></p></td><td><p align="right"><font size="1">146,687 </font></p></td><td><p align="right"><font size="1">803,772 </font></p></td><td><p align="right"><font size="1">102,256</font></p></td><td><p align="right"><font size="1">906,028 </font></p></td><td><p align="right"><font size="1">28,675</font> </p></td></tr></tbody></table><p>Source: Internal Revenue Service </p>

A few things to consider based on these numbers:
1) Pre combined tax cut (2004), the top 5% income group shouldered (18.9 + 37.10)*(.787) = 44.02% of the total tax liability
2) Post tax cut(2005), the top 5% shouldered (19.7 + 39.3)*(.81) = 47.78% of the total tax liability
3) The tax cut of the top 5% amounted to (15.1 + 26.2)*(.677) = 27.9%, yet their tax burden still increased and total revenue from all income tax increased.

Again, to echo a facet of Ace's question, if a combined 47.8% tax liability for the top 5% of income earners is not enough, then what is? And why?
Secondly, do you agree that the "wealthy" are the ones that create jobs, or is it another group?

Ustwo · 10-23-2007, 11:55 AM

You mean the poor arn't paying for pretty much anything in this country?

The problem with the tax code is the poor don't pay enough, they have no investment in the country persay, and by default ANY tax cut helps 'the rich'.

Its easy to be 'progressive' with other peoples money.

Rekna · 10-23-2007, 01:14 PM

It is a big circle. The government gives to the poor who in turn are taxed by the rich who in turn are taxed by the government.

The rich get back any money they loose to taxes by exploiting other people who are predominantly poor. Now not all rich people exploit others but i'd suggest most big money can be traced back to some sort of exploitation like under paying employees, over charging customers, etc.

kutulu · 10-23-2007, 01:49 PM

Quote:

Originally Posted by Byrnison

A few things to consider based on these numbers:
1) Pre combined tax cut (2004), the top 5% income group shouldered (18.9 + 37.10)*(.787) = 44.02% of the total tax liability
2) Post tax cut(2005), the top 5% shouldered (19.7 + 39.3)*(.81) = 47.78% of the total tax liability
3) The tax cut of the top 5% amounted to (15.1 + 26.2)*(.677) = 27.9%, yet their tax burden still increased and total revenue from all income tax increased.

Again, to echo a facet of Ace's question, if a combined 47.8% tax liability for the top 5% of income earners is not enough, then what is? And why?
Secondly, do you agree that the "wealthy" are the ones that create jobs, or is it another group?

First, the one thing your post is missing is table that shows what percentage of the total income is taken by each group. The tables have little meaning without it.

Second, the 'wealthy' ones are the ones that set the wages. They are the ones that decided that half of the country should make less than $30,000 per year. If they are so concerned that they are paying an inordinate amount of taxes they can easily raise the wages of their workers, resulting in the workers having to pay more of the taxes.

flstf · 10-23-2007, 02:01 PM

Quote:

Originally Posted by Rekna

It is a big circle. The government gives to the poor who in turn are taxed by the rich who in turn are taxed by the government.

The rich get back any money they loose to taxes by exploiting other people who are predominantly poor. Now not all rich people exploit others but i'd suggest most big money can be traced back to some sort of exploitation like under paying employees, over charging customers, etc.

I think the "big circle" may work more like, the government taxes wealthy individuals and corporations, who then add the cost of doing business (taxes) to the price of goods and services which are purchased by everyone including the poor.

Rekna · 10-23-2007, 03:14 PM

Quote:

Originally Posted by flstf

I think the "big circle" may work more like, the government taxes wealthy individuals and corporations, who then add the cost of doing business (taxes) to the price of goods and services which are purchased by everyone including the poor.

Yes thats the same thing it just depends on how you phrase it.

host · 10-24-2007, 02:19 AM

Quote:

Originally Posted by Byrnison

I hesitate to jump into a Tilted Politics discussion

, but I too am curious as to Ace's question as to what tax rates at what income levels would be best, and more so why do you see it that way? Shakran's post got me curious about the tax burden question, and what I found was:

Source: http://www.taxfoundation.org/news/show/323.html
<strong>Table 4.</strong> Before and After the Bush Tax Cuts, by Income Group</p><table border="1" cellpadding="0" cellspacing="0" width="90%"><tbody><tr><td colspan="2" width="418"><div align="center"><strong>Before Bush Tax Cuts</strong></div></td><td colspan="3" width="329"><div align="center"><strong>After Bush Tax Cuts</strong></div></td></tr><tr><td width="285"><div align="center"><strong></strong></div></td><td width="133"><div align="center"><strong>Share of Tax Liability</strong></div></td><td width="135"><div align="center"><strong>Tax Reduction for 2004</strong></div></td><td width="102"><div align="center"><strong>Share of Tax Liability</strong></div></td><td width="92"><div align="center"><strong>Share of Tax Cuts</strong></div></td></tr><tr><td width="285">Bottom 20%, $0 to $14,415</td><td width="133"><div align="right">0.50%</div></td><td width="135"><div align="right">$1,976,256,511 </div></td><td width="102"><div align="right">0.30%</div></td><td width="92"><div align="right">1.20%</div></td></tr><tr><td width="285">Second 20%, $14,415 to $25,499</td><td width="133"><div align="right">2.30%</div></td><td width="135"><div align="right">$7,177,358,834 </div></td><td width="102"><div align="right">1.90%</div></td><td width="92"><div align="right">4.20%</div></td></tr><tr><td width="285">Third 20%, $25,500 to $41,640</td><td width="133"><div align="right">5.90%</div></td><td width="135"><div align="right">$15,905,120,495 </div></td><td width="102"><div align="right">5.20%</div></td><td width="92"><div align="right">9.40%</div></td></tr><tr><td width="285">Fourth 20%, $41,641 to $68,295</td><td width="133"><div align="right">12.60%</div></td><td width="135"><div align="right">$29,559,373,144 </div></td><td width="102"><div align="right">11.60%</div></td><td width="92"><div align="right">17.50%</div></td></tr><tr><td width="285">Top 20%, $68,296 and above</td><td width="133"><div align="right">78.70%</div></td><td width="135"><div align="right">$114,633,332,724 </div></td><td width="102"><div align="right">81.00%</div></td><td width="92"><div align="right">67.70%</div></td></tr><tr><td width="285">Total Tax Liability for all taxpayers</td><td width="133"><div align="right">100.00%</div></td><td width="135"><div align="right">$169,251,441,709 </div></td><td width="102"><div align="right">100.00%</div></td><td width="92"><div align="right">100.00%</div></td></tr><tr><td width="285"></td><td width="133"></td><td width="135"></td><td width="102"></td><td width="92"></td></tr><tr><td colspan="2" width="418"><p align="center"><strong>Top 20%</strong></p></td><td colspan="3" width="329"><div align="center"><strong>Top 20%</strong></div></td></tr><tr><td width="285">First Half of top 10%, $68,296 to $97,685</td><td width="133"><div align="right">11.90%</div></td><td width="135"><div align="right">$26,272,937,254 </div></td><td width="102"><div align="right">11.20%</div></td><td width="92"><div align="right">15.50%</div></td></tr><tr><td width="285">Second Half of Top 10%, $97,685 to $136,162</td><td width="133"><div align="right">10.80%</div></td><td width="135"><div align="right">$18,560,111,502 </div></td><td width="102"><div align="right">10.80%</div></td><td width="92"><div align="right">11.00%</div></td></tr><tr><td width="285">Top 20-5%, $68,296 to $136,162</td><td width="133"><div align="right">22.80%</div></td><td width="135"><div align="right">$44,833,048,756 </div></td><td width="102"><div align="right">22.00%</div></td><td width="92"><div align="right">26.50%</div></td></tr><tr><td width="285">Top 5-1%, $136,163 to $335,474</td><td width="133"><div align="right">18.90%</div></td><td width="135"><div align="right">$25,482,868,099 </div></td><td width="102"><div align="right">19.70%</div></td><td width="92"><div align="right">15.10%</div></td></tr><tr><td width="285">Top 1%, $335,475 and above</td><td width="133"><div align="right">37.10%</div></td><td width="135"><div align="right">$44,317,415,869 </div></td><td width="102"><div align="right">39.30%</div></td><td width="92"><div align="right">26.20%</div></td></tr><tr><td width="285">Total Tax Liability for Top 20% of Taxpayers</td><td width="133"><div align="right">78.70%</div></td><td width="135"><div align="right">$114,633,332,724 </div></td><td width="102"><div align="right">81.00%</div></td><td width="92"><div align="right">67.70%</div></td></tr></tbody></table>

Source: http://www.taxfoundation.org/publications/show/250.html
(below years snipped to try to save space)
Table 4.</strong> Total Income Tax after Credits, 1980-2005 ($ Millions) </p><table border="1" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td width="5%"><p align="center"><font size="1">Year </font></p></td><td width="8%"><p align="center"><font size="1">Total </font></p></td><td width="8%"><p align="center"><font size="1">Top 1% </font></p></td><td width="8%"><p align="center"><font size="1">Top 2-5% </font></p></td><td width="8%"><p align="center"><font size="1">Top 5% </font></p></td><td width="8%"><p align="center"><font size="1">Top 6-10% </font></p></td><td width="8%"><p align="center"><font size="1">Top 10% </font></p></td><td width="8%"><p align="center"><font size="1">Top 11-25% </font></p></td><td width="8%"><p align="center"><font size="1">Top 25% </font></p></td><td width="8%"><p align="center"><font size="1">Top 26-50% </font></p></td><td width="8%"><p align="center"><font size="1">Top 50% </font></p></td><td width="8%"><p align="center"><font size="1">Bottom 50% </font></p></td></tr><tr><td width="5%"><p align="right"><font size="1">2003 </font></p></td><td width="8%"><p align="right"><font size="1">747,939 </font></p></td><td width="8%"><p align="right"><font size="1">256,340 </font></p></td><td width="8%"><p align="right"><font size="1">150,257 </font></p></td><td width="8%"><p align="right"><font size="1">406,597 </font></p></td><td width="8%"><p align="right"><font size="1">85,855 </font></p></td><td width="8%"><p align="right"><font size="1">492,452 </font></p></td><td width="8%"><p align="right"><font size="1">134,928 </font></p></td><td width="8%"><p align="right"><font size="1">627,380 </font></p></td><td width="8%"><p align="right"><font size="1">94,647 </font></p></td><td width="8%"><p align="right"><font size="1">722,027 </font></p></td><td width="8%"><p align="right"><font size="1">25,912 </font></p></td></tr><tr><td width="5%"><p align="right"><font size="1">2004 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">831,890 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">306,902 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">168,322 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">475,224 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">92,049 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">567,273 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">138,642 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">705,915 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">98,556 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">804,471 </font></p></td><td valign="bottom" width="8%"><p align="right"><font size="1">27,419</font> </p></td></tr><tr><td><p align="right"><font size="1">2005 </font></p></td><td><p align="right"><font size="1">934,703 </font></p></td><td><p align="right"><font size="1">368,132</font></p></td><td><font size="1"><p align="right"><font size="1">189,627 </font></p></font></td><td><p align="right"><font size="1">557,759 </font></p></td><td><p align="right"><font size="1">99,326 </font></p></td><td><p align="right"><font size="1">657,085 </font></p></td><td><p align="right"><font size="1">146,687 </font></p></td><td><p align="right"><font size="1">803,772 </font></p></td><td><p align="right"><font size="1">102,256</font></p></td><td><p align="right"><font size="1">906,028 </font></p></td><td><p align="right"><font size="1">28,675</font> </p></td></tr></tbody></table><p>Source: Internal Revenue Service </p>

A few things to consider based on these numbers:
1) Pre combined tax cut (2004), the top 5% income group shouldered (18.9 + 37.10)*(.787) = 44.02% of the total tax liability
2) Post tax cut(2005), the top 5% shouldered (19.7 + 39.3)*(.81) = 47.78% of the total tax liability
3) The tax cut of the top 5% amounted to (15.1 + 26.2)*(.677) = 27.9%, yet their tax burden still increased and total revenue from all income tax increased.

Again, to echo a facet of Ace's question, if a combined 47.8% tax liability for the top 5% of income earners is not enough, then what is? And why?
Secondly, do you agree that the "wealthy" are the ones that create jobs, or is it another group?

In 1981, the total employee/employer combined social security tax was 9.30 percent.
....by 1988....after the 1983 "reform"...that tax total was 15.02 percent"
http://www.ssa.gov/OACT/ProgData/taxRates.html

Quote:

http://www.time.com/time/magazine/ar...969418,00.html
Dirty Little Secret
Monday, Feb. 19, 1990 By RICHARD LACAYO

....Moynihan's proposal has focused attention on one of Washington's dirty little secrets. Rather than dealing honestly with the budgetary gap, the Government is once again borrowing against the future. When the baby-boom generation begins to retire about 20 years from now, the IOUs will have to be paid back through sharply higher taxes or still more borrowing.

Igniting a fire storm is precisely what Moynihan had in mind last December when he suggested rolling back the most recent hike in Social Security taxes. On Jan. 1 the rate climbed to 7.65% on the first $51,300 of a worker's income, a sum that employers must match. Moynihan would lower it to 7.51% this year and to 6.55% in 1991......

http://www.time.com/time/magazine/ar...9418-2,00.html

.....Some integrity is badly needed right now. <h2>Until 1983, Social Security was run on a pay-as-you-go basis, with payroll taxes bringing in roughly the same amount that was disbursed as benefits. But that year a bipartisan commission -- on which Moynihan played a key role -- designed a scheme to build a surplus that could swell to $4 trillion by 2010. The money would come from a series of increases in Social Security contributions, which began to phase in six years ago,</h2> and from taxing the benefits of higher-income retirees.

The idea was to avoid burdening the far smaller generation that will follow the baby boomers with huge tax increases or a mountain of new debt. But the intentions of the reform plan were thwarted by the explosive growth of the deficit. Instead of accumulating a stash of savings, the Government has borrowed each year the surplus to pay for the normal operations of the U.S. Government, with no plan for repaying the loans. "It is like an individual having a private pension fund consisting of his own IOUs," writes economist Paul Craig Roberts, a Treasury official during the Reagan Administration.

Just how embedded this budgetary sleight of hand has become was illustrated during hearings by the Senate Finance Committee last week. U.S. Comptroller General Charles A. Bowsher described how the Government moved $52 billion from the Social Security trust funds, as well as $71 billion from other Government trust funds, to give the impression that the 1989 federal deficit was $152 billion. The real figure: $275 billion. "The growing reserve is merely an illusion," Bowsher declared....

Quote:

http://query.nytimes.com/gst/fullpag...linton,%20Bill
Dipping Into the Social Security Bank

By ERNEST F. HOLLINGS
Published: February 5, 1999

....President Clinton's proposed budget calls for spending $100 billion more than we take in.

How can that be? The answer is that the surplus everyone talks about belongs to Social Security already. In 1983 the Greenspan commission (named after its chairman, who is now the Fed chairman) proposed a payroll tax to build up a reserve to take care of the baby boomers when they retired. To make certain this reserve would not be spent, the commission recommended that Social Security be accounted for outside of the annual budget.

Despite current law, Congress has already spent the Social Security reserves for other things. As a result, the Social Security account is $730 billion in the red.

According to the Congressional Budget Office, the Social Security trust fund will grow each year by these amounts:

1999 ,, $126 billion
2000 ...$137 billion
2001 ...$144 billion
2002 ...$153 billion
2003 ...$161 billion
2004 ...$171 billion
2005 ...$183 billion
2006 ...$193 billion
2007 ...$204 billion
2008 ...$212 billion
2009 ...$217 billion

We should have a $3.2 trillion reserve in 2012, when payments to retiring baby boomers will start to exceed revenue. But because we will have already spent the money for other things, we will have to raise taxes or cut benefits to pay Social Security recipients.

To save Social Security, we must first stop looting it for spending programs or tax cuts. Last week Alan Greenspan suggested that the ''surpluses'' should be used to pay down the Federal debt.

The first debt paid should be that of Social Security. Once that is done, then we can legitimately debate the relative merits of keeping a reserve or cutting the payroll tax and putting Social Security on a pay-as-you-go basis.

We should freeze the budget and leave the ''surplus'' where it belongs. That in itself would help to pay down the debt, which would lower pressure on interest rates, stabilize the capital markets, add to the nation's savings and promote economic growth.

Ernest F. Hollings is a Democratic Senator from South Carolina.

....and then, there were these tax cuts:

Quote:

http://www.time.com/time/magazine/ar...962533,00.html
Playing the New Tax Game
Monday, Oct. 13, 1986 By STEPHEN KOEPP.

....America's beloved loopholes are suddenly closing fast. That chilling realization hit home for millions of U.S. consumers last week as they confronted the most sweeping federal income tax overhaul in more than 40 years. Overwhelmingly approved late last month by the House (292 to 136) and the Senate (74 to 23), the bill is expected to be signed into law by President Reagan within the next week or so.......

...By and large the new tax code will be kind to consumers. It will entirely remove approximately 6 million low-income earners from the tax rolls. The overhaul will reduce taxes for about 60% of taxpayers, largely by simplifying and lowering the rate structure. The highest effective rate will drop from 50% to 38.5% next year and 28% after that. To finance those reductions, many tax preferences will be eliminated.

<h3>One of the casualties is the break on long-term capital gains, which has made taxpayers eager to cash in their profits on investments, ranging from stocks to real estate. The current top rate for taxing such gains is effectively 20%, but after this year, those profits will be taxed as regular income at higher rates....</h3>

...but...the compromise that resulted in lowering the top tax bracket....in 1986, has yielded to newer tax breaks for the wealthiest:

Quote:

http://en.wikipedia.org/wiki/Capital_gains_tax

.......United States

Main article: Capital gains tax in the United States

In the United States, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income, but the tax rate for individuals is lower on "long-term capital gains," which are gains on assets that had been held for over one year before being sold. <h3>The tax rate on long-term gains was reduced in 2003 to 15%,</h3> or to 5% for individuals in the lowest two income tax brackets. Short-term capital gains are taxed at a higher rate: the ordinary income tax rate. The reduced 15% tax rate on eligible dividends and capital gains, previously scheduled to expire in 2008, has been extended through 2010 as a result of the Tax Reconciliation Act signed into law by President Bush on May 17, 2006. In 2011 these reduced tax rates will "sunset," or revert to the rates in effect before 2003, which were generally 20%....

<h3>So the wealthiest ten percent....the elite who own more than 70 percent of all US assets....succeeded in achieving both a dramatically lower top tax bracket...compared to the rates in the early 1980's, and...over time....they also received a huge break on the capital gains taxes they pay....receiving the break that they traded away in 1986 to obtain the lowered top tax bracket.....</h3>

I originally posted this on a thread in this forum on 01-09-2007:

Quote:

<h2>....My problem is that you refuse to react to the US wealth redistribution trend.</h2> I've described the problem, with the data that supports the disturbing trend, below. The solution was not to shift the tax burden even more heavily onto those who "enjoy" a steadily shrinking portion of total US wealth, and wage stagnation, to the benefit of those who have experienced a doubling in their annual incomes, between 1979 and 2003.

Your sentiments are a prescription for turning the US into a place like Mexico City....kidnappings of the wealthy, the expense of body guards and heavy security to shield the "haves" from the "have nots", and the lessening of the ability of the "haves" to come and go as they please.

People get angry when the wealthy become too successful at concentrating the wealth, and hence the political and financial leverage of a country. When the "have nots" get to the point where they decide that they have nothing to lose, they begin to act like it. If you do not have anything to add to this discussion, kindly stop reposting the Ron Adams article.

Instead, please tell us how "tax reform" that shifts the tax burden, in any way, to the people who have benefitted the least from economic growth and prosperity, and away from the people who have a virtual "lock" on the increased wealth, is of any benefit, to anyone. Tell us how the growing disparity can be slowed or reversed, without political interference. Tell us how people who experience the loss of representative government, because it has been bought and co-opted by the richest, will sit still, trusting that the "system" will solve the problem...no matter how bad things get for them.

In a hunter gatherer society, if one hunting unit developed a weapon that allowed that unit to take...say 8 out of ten of the game kills on every hunting trip, and that unit refused to share it's bounty, and it became more and more difficult for every other hunting group to find and kill enough game, even to subsist, what do you think would happen to the unit with the superior hunting weapon that refused to share it's out of proportion food supply with the less successful units. We enjoy the resource that the hunter gatherers did not have. We have a government that can respond to inequities in the social structure, especially if the inequity is influenced by the buying of the power and influence of the government, by the wealthiest few.

The "rest of us" will not sit still and idly observe the richest one percent continue to take an increasingly large piece of the pie, and buy legislation to lower their proportion of the total tax burden as they grow richer, and while our wealth barely increase at all. You can repost Ron Adams' article as often as you like, but it does not acknowledge, accept, or offer solutions to the problems of growing wealth and political influence inequity that the Bush tax cuts are aggravating...
</b>

Quote:

http://209.85.165.104/search?q=cache...s&ct=clnk&cd=4

<b>January 29, 2006
NEW, UNNOTICED CBO DATA SHOW CAPITAL INCOME HAS
BECOME MUCH MORE CONCENTRATED AT THE TOP</b>

<b>begins on page 2:</b>

Prior to 2001, the share of
capital income that was
received by the top one
percent never exceeded 50
percent and typically was
well below that mark.
•
In other words, prior to
2001, the top one percent
received less than half of the
capital income. Now it
receives significantly more
than half of such income.
Accordingly, the degree to
which the highest-income
households benefit from
efforts to reduce taxes on
capital income has increased
as well.

Capital Gains and Dividend Tax Cut Would Exacerbate General Growth in Income Disparities
Depicted by the CBO Data
The capital income that CBO analyzed consists of four sources: interest, dividends, rents, and
capital gains. The CBO data do not separate out capital income by source. The CBO data reflect
interest income that is subject to taxation as well as tax-exempt interest income (such as interest earned
on municipal bonds); however, the data only consider capital gains and dividend income that is subject
to taxation. All capital income in tax-exempt retirement accounts is not reflected in the data. As a
result, for the most part the CBO data only reflect capital income subject to taxation.
Although the CBO do not break out trends by the specific source of capital income, the general
trend depicted by the data strongly suggests that policies that reduce taxes on capital gains and
dividend income are of growing benefit to high-income households, since such households are
receiving an increasing share of capital income.
Adding to concerns over the increasingly regressive effects of extending lower taxes on capital gains
and dividend income, the CBO data also show a dramatic widening in overall income disparities during
the past two and one half decades. From 1979 (the first year for which CBO has compiled these data)
to 2003 (the most recent year for which the data are available):

<b>The average after-tax income of the top one percent of the population more than doubled, rising
from $305,800 to $701,500, for a total increase of $395,700, or 129 percent. (CBO adjusted these
figures for inflation and expressed them in 2003 dollars.)
•
By contrast, the average after-tax income of the middle fifth of the population rose a relatively
modest 15 percent (less than one percentage point per year), and the average after-tax income of
the poorest fifth of the population rose just 4 percent, or $600, over the 24-year period.</b>
Extending lower tax rates on capital gains and dividend income would exacerbate the long-term
trend toward growing income inequality.
The Unnoticed CBO Data
The data described here are from a CBO report released in December 2005. The findings related to
the concentration of capital income have gone unnoticed, in part because readers of this report and
similar past CBO reports tend to focus on the trends that these reports depict in federal tax burdens
and in overall income inequality. The findings also have gone unnoticed because of how the
information appears in the report.
Table 1B of the CBO report shows the share of corporate income tax liabilities paid by various
income groups. Because corporate tax returns are filed by corporations while taxes are ultimately
borne by individuals, CBO must distribute corporate taxes liabilities to individual taxpayers based on
information about taxpayers’ sources of income. In keeping with a widespread consensus among
economists, CBO distributes corporate income tax liabilities to households based on their shares of
capital income.
Because of CBO’s methodology, CBO’s findings regarding the distribution of corporate tax liabilities
are a reflection of its findings regarding shares of capital income.
2
<b>That is, CBO’s finding that 57.5
percent of corporate income tax liabilities in 2003 were paid by the top one percent is simply a
reflection of CBO’s estimate that 57.5 percent of capital income in 2003 was received by the top one
percent.</b> It is presumably because the information on the share of capital income going to various
groups is never presented directly in the CBO report that the trend described in this analysis has not
previously come to light.

Table 1. <b>Share of Capital Income Flowing to Households in Various Income Categories
Income Category</b>

Year _____1979______2003
Lowest
Quintile 1.8%____ 0.6%

Second
Quintile 4.1%____ 1.6%

Middle
Quintile 6.7%____ 4.3%

Fourth
Quintile 10.5%____ 6.1%

Highest
Quintile 76.5%____ 85.8%

Top
10% _____66.7% ____79.4%
Top
5% ______57.9% ____73.2%

<b>Top 1% __37.8%_____57.5% </b>

<b>The findings above are supported by data available of the CBO.gov website:</b>

Quote:

http://www.cbo.gov/showdoc.cfm?index=5746&sequence=1
Effective Federal Tax Rates Under Current Law, 2001 to 2014
August 2004
Section 2 of 4

Effective Federal Tax Rates
Under Current Law, 2001 to 2014

<b>Table 2.
Effective Federal Tax Rates and Shares Under Current Tax Law, Based on 2001 Incomes, by Income Category, 2001 to 2014</b>

<b>Share of Total Federal Tax Liabilities</b>

Lowest _______2001____________2006_____2007___2008
Quintile________1.1___________1.1_____1.1______1.1

Second _______2001____________2006_____2007___2008
Quintile________5.0___________5.2______5.2_____5.2

Middle _______2001____________2006_____2007___2008
Quintile________10.0___________10.3_____10.4____10.4

Fourth_ _______2001____________2006_____2007___2008
Quintile________18.5___________19.0_____19.1____19.2

Highest _______2001____________2006_____2007___2008
Quintile________65.3___________64.2_____64.0____63.8

_______________2001____________2006_____2007___2008
Top 10 Percent 50.0___________48.7_____48.5____48.3

_______________2001____________2006_____2007___2008
Top 5 Percent 38.5___________37.3_____37.0____36.7

_______________2001____________2006_____2007___2008
Top 1 Percent 22.7___________21.3_____21.1____20.7

Now....my questions....what other means do the 50 percent of the US population who control only 2-1/2 percent of total assets...have to offset the obvious advantage of the ten percent who control 70 percent of total assets....and the power that advantage brings to them.... they literally have a "get out of jail free" card....we got to see Scooter using it just a few months ago...<h3>aside from using their overwhelming voting majority in an attempt to tax the shit out of the top ten percent...with a special emphasis on the top five percent?</h3> How else can the great majority of us block the "top ten" percent from gaining control over all assets, and thus, most of the political power? Who else is in any position to pay another to do work, than those who have assets above the level of a hand to mouth existence?

Why is their such a strong objection to majority driven, progressive taxation, but no objection to a small, elite buying control of the government, the courts, and the marketplace....furthering their consolidation of wealth to a narrower and narrower group?

In 1983, as I documented at the beginning of this post, a decision was made to extract a huge excess tax on all of the income of most of us....to pay ahead...create a surplus to cope with demands on Social Security after 2012. The surplus was used to lower the income tax and capital gains tax rates...<h2>providing huge tax savings for the wealthiest ten percent...who coincidentally did not pay the excess social security tax on the bulk of their income.</h2>

The wealthiest paid (bought legislative and presidential support) to get this done....and the percentage that they paid before Reagan, compared to what they paid after the Reagan and Bush era tax cuts....is manifested in the $8 trillion increase in US Treasury debt since 1981. Using our votes to restore a 70 percent top tax bracket, and reversing the low capital gains tax....

Quote:

http://www.nytimes.com/2007/07/27/us...27edwards.html
By LESLIE WAYNE
Published: July 27, 2007

......In a speech in Des Moines, Mr. Edwards, a candidate for the Democratic presidential nomination, said he would “rewrite our tax code to make sure it is fair” and added that tax policy under President Bush had led to “more wealth for the wealthy and more power for the powerful.”

The Edwards campaign said his plan would raise the tax rate on capital gains, which are profits from investments, to 28 percent from the current 15 percent for taxpayers with incomes over $250,000. It would remain at 15 percent for those who earn less than $250,000.

Mr. Edwards, of North Carolina, is the first Democratic candidate to call for a broad-based increase in taxes on investment income, and his plan is in keeping with the populist tone of his campaign. ......

.....along with ending the excess spent on the hyped and phoney component of the "War on terror"....will lower and even eliminate the annual $500 billion treasury debt increases of the last five years. This is also a way to end the devaluation of the US dollar before it buys only .75 of a Canadian dollar....it only buys .96....today.

aceventura3 · 10-24-2007, 12:58 PM

Your post begs the question of how the top 10% accumulated 70% of the "wealth" in this nation?

I would argue that the majority of those top 10% started poor or middle class.

I would further argue that the top 10% is dynamic, meaning the top 10% today are not the same top 10% ten years ago.

And since about 35% of the population is 24 years-old or less (generally people in this category have no assets, in case you did not know and are one of the few with a big trust fund), seems to me that you might want to do some adjusting to that 50% of the population only having 2.5% of the assets number.

host · 10-24-2007, 11:42 PM

Quote:

Originally Posted by rlbond86
Moreover, studies have shown that there is a negative correlation between low taxes and economic prosperity; that is, higher taxes actually pull the economy up, on average.

Quote:

Originally Posted by Ustwo

Nothing says 'I'm in school and never had a real job' like this statement, and I don't even know anything about you.

Seriously, no.

I meant to respond to Ustwo's post #8 in this thread....I felt that it deserved (was baiting for...) a response....I apologize for the delay:

Quote:

http://www.cbpp.org/3-8-06tax.htm
Revised July 27, 2006

CLAIM THAT TAX CUTS “PAY FOR THEMSELVES” IS TOO GOOD TO BE TRUE:
Data Show No “Free Lunch” Here
by Richard Kogan and Aviva Aron-Dine

In recent statements, the President, the Vice President, and key Congressional leaders have asserted that the increase in revenues in 2005 and the increase now projected for 2006 prove that tax cuts “pay for themselves.” In other words, the economy expands so much as a result of tax cuts that it produces the same level of revenue as it would have without the tax cuts.....

....In 1981, Congress approved very large supply-side tax cuts, dramatically lowering marginal income-tax rates. In 1990 and 1993, by contrast, Congress raised marginal income-tax rates on the well off. Despite the very different tax policies followed during these two decades, there was virtually no difference in real per-person economic growth in the 1980s and 1990s. <h2>Real per-person revenues, however, grew about twice as quickly in the 1990s, when taxes were increased, as in the 1980s, when taxes were cut.</h2> (See Figure 1.)<p>

<center><img src="http://www.cbpp.org/3-8-06tax-f1.jpg"></center>

......Have the Tax Cuts Increased Revenues?

After adjusting for inflation and population growth, this year and last year’s strong growth in revenues have barely made up for the deep revenue losses in 2001, 2002, and 2003. Measured since the current business cycle began in March 2001, total per-capita revenue growth, adjusted for inflation, has been near zero. Based on OMB’s latest revenue estimates, real per-capita revenues in 2006 will be only 0.2 percent above the level they attained more than five years ago at the start of the business cycle. In other words, the current revenue “surge” is merely restoring revenues to where they were half a decade ago.

By contrast, five and a half years after the peak of previous post-World War II business cycles, real per-capita revenues had increased by an average of 10 percent. And at this point in the 1990s business cycle, real per-capita revenues were 11 percent higher than their level at the end of the previous business cycle.<a href="http://www.cbpp.org/3-8-06tax.htm#_ftn6">[6]</a>

Furthermore, the performance of the economy during the current business cycle has been slightly weaker overall than the economy’s average performance over the comparable period of other business cycles since the end of World War II. Investment growth during the current business cycle has been below the historical average, even though some of the Bush administration’s tax cuts have been specifically targeted at investment. Employment and wage and salary growth have been especially weak during the current business cycle.<a href="http://www.cbpp.org/3-8-06tax.htm#_ftn7">[7]</a> If tax cuts are crucial to economic growth, then the current business cycle — with its large tax cuts — should strongly outperform previous business cycles. Instead, it has performed more poorly than average.

Ustwo.... the preceding information supports my contention that rlbond86 made reasonable points and you, in response...did not....what is up with that?

Quote:

Originally Posted by aceventura3

Your post begs the question of how the top 10% accumulated 70% of the "wealth" in this nation?

I would argue that the majority of those top 10% started poor or middle class.

I would further argue that the top 10% is dynamic, meaning the top 10% today are not the same top 10% ten years ago.

And since about 35% of the population is 24 years-old or less (generally people in this category have no assets, in case you did not know and are one of the few with a big trust fund), seems to me that you might want to do some adjusting to that 50% of the population only having 2.5% of the assets number.

Here's some relevant info I dug up ace.... I don't think it supports your argument that "having not" is an affliction that progressive age and "hard work" will "cure".....not in Kentucky, anyway. I chose as examples, the blackest and poorest state, the welathiest by per capita income, and....thirdly, one of the whitest and poorest states.....

The richest Americans are literally...."all over the place"....self-made, first generation wealthy, and a goodly number of others enjoy inherited wealth. I've included examples of two "self made" billionaires....and I believe that outsized wealth buys outsized political and economic influence (control). The effect is that the purchases of influence diminish the potential of "have nots" to exercise their due share of power....impact on the political and economic system:

Quote:

http://www.statehealthfacts.org/prof...1&cat=1&ind=10
United States: Poverty Rate by Age, states (2005-2006), U.S. (2006)...Mississippi ...... Connecticut... Kentucky
Children 18 and under ......... 17,478,440.. 22%.....................291,634 ..36% .....133,910 .. 15% . 270,104 . 26%
Adults 19-64 .................. 27,997,213.. 15%.................... 397,281 ..23% .....235,499 .. 11% . 423,417 . 17%
Elderly 65+ .....................4,631,482...13%..................... 77,492 ..23% ..... 45,343 .. 10% .. 93,708 . 20%

Population Distribution by Citizenship Status, states (2005-2006), U.S. (2006)
..............United State ......Mississippi ....... Connecticut ........... Kentucky
Citizen ....273,330,291 .. 93% ..2,814,295..99% .... 3,266,976 .. 94% ...... 3.944,835 .. 93%
Non-Citizen .22,726,545 .. 8% .. 41,165 ....1% ....... 251,914 ... 7% ......... 98,684 ... 8%

US Poverty Distribution:
Adults with Children ..... 29,555,329.. 19%
Adults with No Children .. 20,551,807 ..15%

US Adults living in poverty, by Gender:

Female.................... 18,662,629 ..17%
Male...................... 13.966.066 ..13%

Quote:

http://www.forbes.com/lists/2006/54/...eVos_GLPH.html
The 400 Richest Americans
#73 Richard M DeVos
09.21.06, 10:00 AM ET

Net Worth $3.5 billion Source Service, Self made

Age 80
Marital Status Married, 4 children
Hometown Ada, MI, United States

Became friends in early 1940s with Jay Van Andel (d. 2004) after Richard offered Jay 25 cents a week in exchange for a ride to school. After high school joined military together. Opened drive-in eatery; then founded Amway. Reorganized as Alticor in 2000. Today 3 million salespeople distribute personal care, home products in more than 80 countries. Sales: $6 billion. Now retired, serves on board. Heart transplant recipient owns pro basketball's Orlando Magic. Long-practicing Christian tithes 10% of income to church; with wife, Helen, has donated $400 million to health, education, the arts.

http://www.seekgod.ca/cnp.d.htm
...Rich DeVos - CNP Executive Committee 1984-85, CNP Senior Executive Committee 1986-88, 1990-93, Board of Governors 1996, 1998;...

...."In the last election, Amway gave more to the GOP than any other company, including an unprecedented $2.5 million in soft money. DeVos and his wife Helen are also major contributors to Newt Gingrich and GOPAC...In 1989, the company spent a jaw-dropping $38.1 million to settle a suit by Canada's trade office that accused the company of undervaluing merchandise to escape customs duties. This topped a $25 million fine from the province of Ontario in 1983, after Amway pleaded guilty to criminal fraud..." 30 .....

.... "...Principals: The 1982-1983 officers of the Council for National Policy (CNP) were: Thomas F. Ellis, pres; Nelson Bunker Hunt, vice pres, Bob J. Perry sec-tres; Rep. Louis (Woody) Jenkins, exec dir; and Dr. Tim LaHaye, immediate past pres.(1) According to Nelson Bunker Hunt in his deposition in the Iran-Contra hearings, the presidency of the CNP rotates. He has been president, Pat Robertson has been president, and the president at the time of the hearings was Richard DeVos.(2) Hunt also noted that right-wing stalwarts Joseph Coors, Paul Weyrich, and Howard Phillips had served on the executive committee.(2) Woody Jenkins was the original executive director who resigned when the CNP moved from Louisiana to Washington DC.(2) According to the Hunt deposition, Jenkins was succeeded by Margo Carlisle and then Jack Nelson.(2) The CNP has no members who are not principals. It is a gathering of millionaires that covers a full spectrum of the political right: the New Right, neoconservatives, members of former President Reagan's "kitchen cabinet," and fundamentalist preachers and televangelists.(3) ...

http://www.seekgod.ca/cnp.htm
...Background: According to one source, the CNP was formed in 1981 by Texas millionaires Nelson Bunker Hunt, Herbert Hunt, and T. Cullen Davis.(5) A second source reports that it was formed by Richard Viguerie to rival the Council on Foreign Relations.(8,26) The council is composed of politically powerful, wealthy individuals. It intentionally maintains a very low profile.(3,5) One of the conditions of membership is not to reveal the names of other members or the substance of the group's meetings.(9) The CNP bills itself as being the Council on Foreign Policy for the Right.(9) But, its importance does not lie in producing and promoting an ultra-conservative foreign policy agenda, many of its affiliates already do that. It is considered by its members as a network that encompasses the entire spectrum of right-wing politics.(3) It provides a "safe" place for representatives of a wide range of ultra- conservative, anticommunist, pro-military organizations--including the executive branch of the White House--to discuss and promote their programs.(3).....

Quote:

http://abcnews.go.com/Politics/story?id=121170

Inside the Council for National Policy
Meet the Most Powerful Conservative Group You've Never Heard Of

....Look for them if you're at a ritzy hotel in Tyson's Corner, Va.

Supreme Court Justice Clarence Thomas is the headliner. White House counsel Alberto Gonzales will speak, as will Timothy Goeglein, deputy director of the White House Office of Public Liaison. There have been no public announcements, and there won't be. The 500 or so members will hear private, unvarnished presentations.

White House spokeswoman Anne Womack said Gonzales' remarks would not be released. The CNP's bylaws keep out the press and prevent disclosure of the transcribed proceedings — unless all the speakers give their assent. Few do.

In a 2000 filing with the Internal Revenue Service, the CNP says it holds "educational conferences and seminars for national leaders in the field of business, government, religion and academia." It says it produces a weekly newsletter keeping members abreast of developments, and a biyearly collection of speeches. Executive Director Morton Blackwell was paid a little more than $70,000. The organization took in more than $732,000. ......

.......In 1999, candidate George W. Bush spoke before a closed-press CNP session in San Antonio. His speech, contemporaneously described as a typical mid-campaign ministration to conservatives, was recorded on audio tape.

(Depending on whose account you believe, Bush promised to appoint only anti-abortion-rights judges to the Supreme Court, or he stuck to his campaign "strict constructionist" phrase. Or he took a tough stance against gays and lesbians, or maybe he didn't).

The media and center-left activist groups urged the group and Bush's presidential campaign to release the tape of his remarks. The CNP, citing its bylaws that restrict access to speeches, declined. So did the Bush campaign, citing the CNP.

Shortly thereafter, magisterial conservatives pronounced the allegedly moderate younger Bush fit for the mantle of Republican leadership.

The two events might not be connected. But since none of the participants would say what Bush said, the CNP's kingmaking role mushroomed in the mind's eye, at least to the Democratic National Committee, which urged release of the tapes.

Partly because so little was known about CNP, the hubbub died down.

The CNP Against Liberalism

The CNP describes itself as a counterweight against liberal domination of the American agenda.

Quote:

http://www.forbes.com/lists/2006/10/BH69.html
#1 William Gates III

Age: 50
Fortune: self made
Source: Microsoft

Net Worth: $50.0 billion

Country Of Citizenship: United States
Residence: Medina, Washington, United States, North America
Industry: Software
Marital Status: married, 3 children

Microsoft's chief visionary moving further away from day-to-day corporate work. For the first time did not offer a strategy outlook at last year's financial analyst meeting. Instead, prefers to dive into innovative projects, foster collaboration among Microsoft's many divisions. Microsoft aims to be omnipotent, selling software for PCs, servers, cell phones, television set-top boxes, gaming consoles, the Web. At the ripe (tech sector) age of 30, Gates' company impressively beats rivals in profit margins, market capitalization and R&D budget, but its sales growth is slowing to a (recently) single-digit percentage pace. Like elder statesman of computing, IBM, has been investing heavily in its own stock. Diversifies methodically, selling 20 million shares every quarter, reinvesting through Cascade Investment. Big stakes in Canadian National Railway, Republic Services, Berkshire Hathaway. Philanthropy, via $29 billion Bill & Melinda Gates Foundation, aimed at fighting infectious disease (hepatitis B, AIDS, malaria) and improving high schools.

http://www.pbs.org/now/politics/inheritance.html
01-17-03
..... Overview

Conservatives call it "the death tax." Lawyers call it the "estate tax." It used to be known as "the inheritance tax." And each group has a different assessment of who pays the tax, and who would profit from its repeal. After a ten-year campaign, Congress delivered a repeal of the tax to President Clinton, who vetoed the measure. President Bush made reducing the estate tax one of his first priorities and it being phased out. A movement is underway to make the scheduled 2010 repeal of the tax permanent.

But now there's a campaign to restore the inheritance tax. And it's being led by some of the country's richest people. Bill Gates, Sr., the patriarch of the Gates family, who heads the Bill and Melinda Gates Foundation, and Chuck Collins, an heir to the Oscar Mayer fortune who

founded the organization Responsible Wealth. They want the tax reinstated, saying that it's crucial to American democracy and entrepreneurship great. But the debate goes on.....

Quote:

http://www.nytimes.com/2007/01/08/washington/08tax.html

January 8, 2007
Tax Cuts Offer Most for Very Rich, Study Says
By EDMUND L. ANDREWS

WASHINGTON, Jan. 7 — Families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts, according to a new Congressional study.

The study, by the nonpartisan Congressional Budget Office, also shows that tax rates for middle-income earners edged up in 2004, the most recent year for which data was available, while rates for people at the very top continued

to decline. click to show

The report shows that a comparatively small number of very wealthy households account for a very big share of total tax payments, and their share increased in the first four years after Mr. Bush’s tax cuts.

<h3>The top 1 percent of income earners paid about 36.7 percent of federal income taxes and 25.3 percent of all federal taxes in 2004. The top 20 percent of income earners paid 67.1 percent of all federal taxes, up from 66.1 percent in 2000, according to the budget office.</h3>

By contrast, families in the bottom 40 percent of income earners, those with incomes below $36,300, typically paid no federal income tax and received money back from the government. That so-called negative income tax stemmed mainly from the earned-income tax credit, a program that benefits low-income parents who are employed.

Put another way: rich families were the undisputed winners from President Bush’s tax cuts, but people in the bottom half of the earnings scale were not paying much in taxes anyway.

The plain truth in the preceding article is the top one percent, and the next nineteen percent pay a large percentage of all federal taxes, because....on the small earnings of the bottom 40 percent, especially after they pay 7.75 percent FICA/Medicare withholding on EVERY dollar that they earn....they simply cannot afford to eat, clothe, house, and transport themselves, and pay state and local taxes, too..... if they were compelled to pay additional federal income taxes....

AND NOW...THE ONLY SIGNIFICANT ASSET OF MOST OF THE BOTTOM 80 PERCENT...THE EQUITY IN THEIR HOMES....IS COMMENCING TO RECEDE DRAMATICALLY.....

....since you are obviously objecting to my entire argument, ace....can you post whether there would be any point....say, when the top ten percent owned 90 percent of all US assets....when you would support the idea of the bottom 67 percent of voters on the wealth scale....voting in a political platform and representative majority, committed to raising the top progressive income tax bracket to 70 percent of all income above....say.... $500,000...and an inheritance tax of 67 percent on amounts of estates valued above $10 million....the numbers are simply examples....the crux of the question is....are you in favor of simply not interfering with the present wealth consolidation trend into the control of a tiny percentage of US residents...and letting "nature"....which history tells us is either violent revolution or...perhaps a Cesar Chavez style "intervention"....take it's course?

aceventura3 · 10-25-2007, 06:56 AM

Quote:

Originally Posted by host

....since you are obviously objecting to my entire argument, ace....

I don't object to your entire argument. The parts that I object to, I comment on.

Quote:

can you post whether there would be any point....say, when the top ten percent owned 90 percent of all US assets....when you would support the idea of the bottom 67 percent of voters on the wealth scale....voting in a political platform and representative majority, committed to raising the top progressive income tax bracket to 70 percent of all income above....say.... $500,000...and an inheritance tax of 67 percent on amounts of estates valued above $10 million....the numbers are simply examples....the crux of the question is....are you in favor of simply not interfering with the present wealth consolidation trend into the control of a tiny percentage of US residents...and letting "nature"....which history tells us is either violent revolution or...perhaps a Cesar Chavez style "intervention"....take it's course?

In this country a person born in poverty can become one of the wealthiest people in the world. And anyone through education, work, and savings can live a very comfortable lifestyle regardless of where they started in life.

Progressive tax rates don't really hurt people already wealthy, they have options to avoid excessive tax rates.

Progressive tax rates hurt those accumulating wealth.

If you have a marginal income tax rate of 70% (not including state, local and other taxes), the family who hits that for the first time is suddenly faced with a situation where their ability to save additional income may go to zero real fast, putting the brakes on their ability to accumulate wealth or even pay for college for their children (In your view, you probably think it better that the family rely on government rather than their own money to pay for education - I don't).

Then your idea of a 67% death tax is meaningless. Only people who fail to plan would pay a 67% death tax. Everyone else would spend the money, give it away, leave it in corporations, or put into trusts. Close all those loop holes, and then the assets go overseas. The death tax should be 0, we should tax consumption and not have a double tax on earnings from work/savings/investments.

Again, it comes down to the question of what is the most efficient tax rate (and perhaps tax structure). I think that rate is going to be closer to zero, you seem to think it would be closer to 100%. In the end that is really all that "Supply Side" is all about.

A Keynesian economist would argue that on the demand side, government can stimulate the economy through deficit spending. On the other side of the equation a Supply Side economist would argue that government returning tax dollars to the private sector can stimulate the economy. Both positions can be correct depending on the circumstances.

host · 10-25-2007, 07:36 AM

I suspect you are saying that you object to any instance of the majority using their superior voting numbers to legislate the redistribution of wealth away from the few who own most of it, into the control of everyone else....even if the holding of all assets in the country...now in excess of 70 percent by the top ten percent...were to rise to their holding 90 percent of all of the wealth.

You do not recognize, as a negative for the majority, the power and influence that the huge wealth advantage buys the wealthy elite. You advocate for a political system that does not "interfere" with wealth accumulation, even if it results in poverty and subsistence living for the vast majority. If the wealthiest end up with 90 percent of the wealth...do you think that they would be positioned to pay higher or lower wages to laborers than they currently pay? Do you think that they did not "interfere" with, what would have been a predictable process of majority rule...with the priorities of the majority routinely implemented via legislation....by buying the votes of the peoples' representatives....to block legislation that the wealthy perceived as negatively impacting their further wealth accumulation, or preservation?

Our country is skewed now to an extreme where more than 70 percent of all assets are controlled by ten percent of the residents..... wealth distribution here is much closer to that occurring today in Mexico or in Venezuela, than in Denmark or Sweden..... Do you think that this is so, because of non-intervention by government....in the US and Mexico, compared to, in Denmark or Sweden?

Can you consider that the distribution of wealth here is mitigated by the wealthy blocking the political influence of the majority, as it is in Mexico....using the government to create conditions that maximize the profits and income of a few who pay to make the government work for them.... whereas the majority in Denmark and Sweden have summoned the political power of their numerical majority to make their governments responsive to their priorities, to the detriment of their wealthiest class?

aceventura3 · 10-25-2007, 08:12 AM

Quote:

Originally Posted by host

I suspect you are saying that you object to any instance of the majority using their superior voting numbers to legislate the redistribution of wealth away from the few who own most of it, into the control of everyone else....even if the holding of all assets in the country...now in excess of 70 percent by the top ten percent...were to rise to their holding 90 percent of all of the wealth.

Correct. I am against government redistributing wealth. I think the role of government should be to provide for the common good. Legalized robbery is still robbery, in my opinion. I would not want to live in a country where the seizing of property to give to others was a common practice.

Quote:

You do not recognize, as a negative for the majority, the power and influence that the huge wealth advantage buys the wealthy elite. You advocate for a political system that does not "interfere" with wealth accumulation, even if it results in poverty and subsistence living for the vast majority.

That is not true in this country. People in this country enjoy some of the highest standards of living in the world.

Quote:

If the wealthiest end up with 90 percent of the wealth...do you think that they would be positioned to pay higher or lower wages to laborers than they currently pay? Do you think that they did not "interfere" with, what would have been a predictable process of majority rule...with the priorities of the majority routinely implemented via legislation....by buying the votes of the peoples' representatives....to block legislation that the wealthy perceived as negatively impacting their further wealth accumulation, or preservation?

Our country is skewed now to an extreme where more than 70 percent of all assets are controlled by ten percent of the residents..... wealth distribution here is much closer to that occurring today in Mexico or in Venezuela, than in Denmark or Sweden..... Do you think that this is so, because of non-intervention by government....in the US and Mexico, compared to, in Denmark or Sweden?

Can you consider that the distribution of wealth here is mitigated by the wealthy blocking the political influence of the majority, as it is in Mexico....using the government to create conditions that maximize the profits and income of a few who pay to make the government work for them.... whereas the majority in Denmark and Sweden have summoned the political power of their numerical majority to make their governments responsive to their priorities, to the detriment of their wealthiest class?

I don't see what you see. I see opportunities for all regardless of circumstance. I think most wealthy people became wealthy because they added value to something, I think their wealth was generated because they added greater value to society. For example Bill Gates and Microsoft - regardless of what you think about Windows I think the net value to society is many times greater than his wealth, he is giving a lot of his wealth away, many are in the top 10% because of his company, and he and his company have paid billions and billions in taxes. I have no problem with Gates and his wealth.

I think most poor adults are poor because of choices they have made. Sure some people are true victims of circumstance but not most. Also experience has shown that it is never too late in this country for a person to get on the right track, unless they are serving life in prison or soemthing like that.

host · 10-25-2007, 09:27 AM

Quote:

Originally Posted by aceventura3

Correct. I am against government redistributing wealth. I think the role of government should be to provide for the common good. Legalized robbery is still robbery, in my opinion. I would not want to live in a country where the seizing of property to give to others was a common practice.

That is not true in this country. People in this country enjoy some of the highest standards of living in the world.

I don't see what you see. I see opportunities for all regardless of circumstance. I think most wealthy people became wealthy because they added value to something, I think their wealth was generated because they added greater value to society. For example Bill Gates and Microsoft - regardless of what you think about Windows I think the net value to society is many times greater than his wealth, he is giving a lot of his wealth away, many are in the top 10% because of his company, and he and his company have paid billions and billions in taxes. I have no problem with Gates and his wealth.

I think most poor adults are poor because of choices they have made. Sure some people are true victims of circumstance but not most. Also experience has shown that it is never too late in this country for a person to get on the right track, unless they are serving life in prison or soemthing like that.

ace....my POV and arguments are in reaction to trends....data.....what are your POV and arguments in reaction to? I see conflicts between what you say is happening...I don't think I've seen you post your agreement that there is a wealth concentration trend..... so, where are your arguments coming from?

<center><img src="http://www.stateofworkingamerica.org/tabfig/01/SWA06_Fig1L.jpg" width="1000" height="800">

<h2>Is it a coincidence that the line in the preceding graph moves opposite the line in the union membership graph, and in the one after it?</h2>

1947- Republican congress passes anti-union, Taft-Hartley Act over President Truman's veto.... 1983... President Reagan invokes provisions of Taft-Hartley in ordering striking FAA air traffic controllers back to work, and orders firing of 11,200 strikers when they resist his back to work order.....

<img src="http://voteview.com/images/Union_Membership.jpg">

<img src="http://www.stateofworkingamerica.org/tabfig/01/SWA06_Fig1M.jpg" width="1000" height="800">
<h3>What happened the last time the top one percent concentrated it's share of total income to the extreme levels we experience today?</h3>
<img src="http://www.stateofworkingamerica.org/tabfig/01/SWA06_Fig1E.jpg" width="1000" height="800">

<img src="http://www.stateofworkingamerica.org/tabfig/01/SWA06_Fig1C.jpg" width="1000" height="800">

<h2>Have entire ethnic population segments...and entire races...simply made "poor choices", ace....or are they just not trying as hard as caucasian "folks"?</h2>
<img src="http://www.stateofworkingamerica.org/tabfig/01/SWA06_Fig1F.jpg" width="1000" height="800"></center>

aceventura3 · 10-25-2007, 10:05 AM

Here is an analysis by the Heritage Foundation:

Quote:

The Census report brings good news: Poverty declined and income increased in 2006. Median family income increased to its highest level except for the peak of the previous business cycle in 1999 and 2000. The number of households reporting income of less than $10,000 declined, while the number of households reporting more than $100,000 increased. Families are becoming richer in today's economy.

The attempt by the Census Bureau to adjust for the different household sizes in the various quintiles is an important step in producing better analysis. The top quintile contains 20 percent of the nation's households but has approximately a quarter of the population. As a result, the top quintile has a larger share of income because it has more people and workers. The Census's use of a new measure to account for this ("equivalence-adjusted income") paints a more accurate picture of income inequality.

The Census Bureau should include post-tax and transfer calculations in its next report on income and poverty. By better capturing disposable income, these factors would reveal an even lower level of income inequality in the United States. The Census report refutes the notion that "the rich are getting richer and the poor are getting poorer." Instead, all quintiles are growing wealthier with more money income.

http://www.heritage.org/Research/Economy/wm1592.cfm

I guess the last sentence is a key point. Is the basis of the data you posted above based on gross or net after taxes income. Since your point is relative to tax policy, that is an important question.

host · 10-25-2007, 11:15 AM

Quote:

Originally Posted by aceventura3

Here is an analysis by the Heritage Foundation:

http://www.heritage.org/Research/Economy/wm1592.cfm

I guess the last sentence is a key point. Is the basis of the data you posted above based on gross or net after taxes income. Since your point is relative to tax policy, that is an important question.

ace...I've posted reams of data that support the observation that the top ten percent are concentrating total US wealth, as the wealth of the lesser 90 percent declines.....this is a 30 plus year trend.

You have now countered with a piece about recent interpretation of income distribution....from heritage.org. Heritage is a conservative lobbying entity, supported by Richard M. Scaife and the Olin Foundation....it does not issue "research" equivalent in reliability to what is released on the Federal Reserve Board site, as an example.

Your response is to deny that there is a long history of continued wealth concentration....into the top ten percent, with a huge concentration into the top one percent.....so, therefore there is nothing to discuss...no problemo.....so be it, then.....adios !

aceventura3 · 10-25-2007, 01:07 PM

My problem is that you put together tons of random data without connecting them to support a point. O.k. there are rich people. You want to tax them in order to redistribute wealth. Once everyone is equal and there is no incentive to work harder, work smarter, save more, invest, take risks, etc., then what? I don't know what you want me to prove? I don't know where you want to go with the discussion. I believe smart people, people willing to work harder and smarter, people willing to take calculated risks will always rise to the top.

You are correct there is nothing to discuss other than nit picking the data you post or the data I post.

aceventura3 · 10-26-2007, 06:20 AM

{added}

One last thing to put wealth creation in perspective:

If you and I did everything in life exactly the same except that at age 22 I buy a car for $10,000 and you buy a car for $20,000, I invest $10,000 earning 10%. After 30 years I will have $198,000 more money than you.

Then if every 5 years I spend $10,000 less each time we buy a car over that 30 year period and I invest the difference earning 10%, I will have $480,000 more money than you.

So, after a life time of buying modest vehicles compared to you, you would have the government take the money I saved and give some of it to you?!? I am happy we have the 2nd Amendment!

10-22-2007, 10:22 AM	#1 (permalink)
aceventura3 Junkie Location: Ventura County	If Not Supply Side then What? I am curious. Many do not believe Supply Side economics works. As I have read posts on the subject, in particular about Bush's tax cuts, it is my understanding that those who don't believe Supply Side theories don't believe that tax cuts actually benefit the economy and specifically working class and poor people. To be clear, in my view tax policy can have three affects on the general economy. One, it stimulates the economy. Two, it is neutral. And three, it restricts economic growth. Generally in a relative high marginal tax rate environment, cutting tax rates will stimulate the economy in my view, hence the Supply Side affect. I think it is virtually impossible to have neutral tax policy. I think in rare instances raising tax rates can stimulate an economy, however this would be true in a developing economy. For example, raising tax rates in an unregulated economy would be a positive for that economy or raising tax rates to build an interstate road system would be good for the economy. However, I think in most cases raising tax rates will put a damper on economic growth. Therefore, in all most all other circumstances with relatively high marginal tax rates, lowering those tax rates will stimulate economic growth. And I believe economic growth is good for everyone participating in the economy. So my question to those who do not believe Supply Side works, relative to how tax policy affects the economy what do you believe? Do you think tax policy is neutral? Do you believe raising taxes stimulates the economy, and if so under what circumstances? Why don't you believe all participants in a growing economy benefits? At what point do you think tax rates would be too high? __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

10-23-2007, 07:23 AM	#7 (permalink)
aceventura3 Junkie Location: Ventura County	I already know that many of you don't think Supply Side Economics can contribute to economic growth. And I agree that it won't under some circumstances. I am more interested in understanding what you think works. If cutting taxes doesn't contribute to economic growth, what does? What impact does tax policy have on economic growth? Is government more efficient at creating economic growth than the private sector? If like rlbond86 posted, if higher taxes lead to economic growth, would that be true up to a 100% tax rate? Where do you think the best rate would be? __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

10-23-2007, 09:32 AM	#13 (permalink)
roachboy Super Moderator Location: essex ma	i dont really have time for this at the moment, so i'll only post a couple short statements and return to the thread later. 1. you can't isolate tax policies from the larger neoliberal economic ideology that situate them. "supply side" is a cocktail napkin diagram that functions as a popularizing meme/name for some aspects of neoliberalism--but who get to see the whole foul package of neoliberalism on display at the structural adjustment show nearest you. as ustwo's posts show, a neoliberal perspective does nto enable you to say anything coherent about the new deal in particular, or about keynesian economic ideology more generally--so presumably the period after world war 2, which saw the most coherent and functional phase of capital accumulation yet, and which was shaped by keynesian policies, is a giant accident which simply functioned long enough to prevent collapse, only to be rescued from itself by the mighty ronald reagan and the laffer curve. 2. there is no doubt that the period of supply side hoodoo has generated the largest transfer of wealth into the hands of the economic elite in history. the stats on this are easy to find. so now, thanks to supplyside, the us has a distribution of wealth on par with that of guatemala. way to go. i see the ideology responsible for this travesty as not about what it says it is about: it is not about tax cuts as a way to stimulate economic activity in general, simply because tax cuts in supplyside world do not operate in isolation--it is about the dismantling of mechanisms that purchase political consent and social solidarity within capitalism as a device to cope with increased uncertainty (globalizing capitalism) by decreasing political risk. it is an abandonment of any sense that capitalism is a destructive system--which is self-evidently is (even if you see it as "creative destruction" in the schumpeter mode)...because supplyside also treats as axiomatic that capital generates wealth and not labor, its tactic regarding taxation is to build (fictive) cash reserves for the holders of capital with the idea that they will invest it in new forms of economic activity--as if the present holders of capital and "entrepreneurs" are the same social group (which isnt true).... supplyside reflects a wholesale devaluation (in the ideological and material senses) of labor, replacing it with fantasies of capital on its own as the motor of all things; neoliberals prefer to pretend that the economy really is separate from all other areas of social activity (wholly untenable) primarily as a way to avoiding social and political consequences of their own policies. neoliberals might not like the state as a mechanism for redistributing wealth, but they sure do like like all the repressive functions of the state. they regard trade unions as Evil and all public political action as hooliganism. so the consequences of neoliberal policies are criminalized, and expressions of dissent treated as evidence of fifth column activity. this is of a piece with the ludicrous position regarding poverty as a reflection of some moral failing on the part of the poor. the position on taxation popularized via laffer's cocktail napkin drawing is only a small part of the problem that is neoliberalism. you cant isolate taxation from the rest of it. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

10-23-2007, 10:52 AM	#14 (permalink)
aceventura3 Junkie Location: Ventura County	Complexities of theoretical arguments can be confusing. But on a base level you either have economic growth stimulated by government or by the private sector. I think that is a given, if it is wrong I am open to the other possibilities. Given economic growth from government activity, the government taxes and then spends the money. If government spends the money people benefit. There is a long-term benefit if the government spends the money on productive things, for example building a bridge to no where helps create jobs during construction of the bridge. But building a bridge linking two commercial hubs not only gives the short-term benefit of jobs but the long-term benefit of enhancing trade between the hubs. I don't know any Supply Sider who would say tax rates should be 0 or that there is no role for government in creating economic growth. At some point government will become inefficient at putting taxed dollars to productive use compared to the private sector. Supply Sider would argue at this point tax cuts would stimulate the economy. It seems that many of you are saying Supply Side never works, is this true? P.S. - I am also curious about why anyone would think economic growth stimulated by government would mean that "wealthy people" would get less of a benefit compared to economic growth stimulated by the private sector? Seems to me - it won't matter where the growth comes from - "wealthy people" will get their share first. After all- in my bridge analogy - the company that gets the contract to build the bridge is going to get profits regardless of who pays the bill. __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

10-23-2007, 11:08 AM	#15 (permalink)
roachboy Super Moderator Location: essex ma	circular, ace. you insist on operating entirely within the framework for thinking about taxation and economic activity that neoliberalism makes avaialble for you to use. so one way of looking at this thread is that you are trying to see if other ways of thinking about economic activity, other ways of considering the relations of the state to system activity, can be assimilated into the single perspective that you bring to the table. in my view, the problem is that perspective itself. you cant just swat that away by saying "theoretical discussions can be confusing" because if you want a dialogue, it is necessarily a theoretical one--and the claim that you own perspective prevents you from seeing anything not already processed in its own terms, is also a theoretical claim. the irony is that neoliberalism is entirely theoretical, it is most coherent when it is not applied, when it sits on paper, when its reference points are not damage done in the world, but older theoretical models of capitalist political economy. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

10-22-2007, 01:23 PM	#2 (permalink)
filtherton Junkie Location: In the land of ice and snow.	I don't think that economic growth is necessary automatically and/or significantly better for everyone in the economy. Supply side econ is why we have only three (or four) cops on the sex crimes squad in minneapolis, while the number of unsolved rape cases has been increasing. It's why the minnesota department of transportation tried to "front" a major, multi-year highway construction project from construction companies. It's quite possibly at least partly responsible for the 35w bridge collapsing. I'm all for people having money to in invest and save, but i don't think that either of these things should always be the number one priority. GDP becomes less and less important when you don't have enough cops on the street, the public school system is doing less and less in the way of actual teaching, the people in charge of maintaining infrastructure don't have the money or the political will to do maintain the infrastructure, and the cost of attending public universities is sky-rocketing. I think that supply side is often just a clever code word in reference to starve the beast policies that seek first to underfund important government programs, and then second, to point to the ineffectiveness of these programs that become ineffective because they're underfunded as evidence that we need to underfund them even more. Supply side should be one option. Anyone who thinks it's the only way to go is a snake oil salesman.

10-22-2007, 11:16 PM	#3 (permalink)
rlbond86 Insane	Once again regular old people think they know better than economists. The porponents of supply-side economics, for the most part, are NOT economists. Supply-side economics just makes rich people richer. Think about it -- you have $20 million dollars. You get $1 million back in taxes. Are you going to spend that money, putting it back into the economy? No! You're going to save it, or invest it, or whatever. You aren't going to buy goods or services. That's why supply-side economics doesn't work. Don't get it confused with trickle-down theory, though. Sometimes, a well-timed tax cut THAT DOES NOT FAVOR THE RICH but instead the middle and lower classes, can get things back in line. Nobel Prize winner James Tobin: "Supply-side claims have been proven false by experience... [The] idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981." Moreover, studies have shown that there is a negative correlation between low taxes and economic prosperity; that is, higher taxes actually pull the economy up, on average.

10-23-2007, 05:34 AM	#5 (permalink)
Rekna Junkie	Why tax when you can borrow......

10-23-2007, 08:09 AM	#9 (permalink)
Rekna Junkie	Wasn't the new deal one of the best programs in the history of the United States for economic growth? That is a perfect example of government programs creating economic growth. Job creation creates economic growth and taxes should correlate to job creation. Now of course this isn't always the case.

10-23-2007, 08:17 AM	#10 (permalink)
shakran Tone.	The trouble with supply side is that it's a great idea on paper. But then so is socialism. Both systems fail to take into account human nature. People always want equality, but want to be more equal than the rest of the unwashed masses. So you end up with (in socialism) the wealth concentrated in the Party, or (in trickledown) the wealth not actually trickling down. The rich didn't generally get rich by spending craploads of cash. Most wealthy people are actually pretty frugal. Those who aren't, such as certain celebrities, generally don't spend their money in ways that will help the economy. Buying a Ferrari is great for Italy, but doesn't do quite as much for the USA. We instead need a fair taxation system that taxes people equally on their ability to pay. Someone pulling in millions of dollars a year can afford to pay quite a bit more than someone pulling in 40,000. They're benefiting from the American financial system, they should pay in to it as well. Balance out the tax burden, we'd end up with more money in government coffers, which would lead to better public services. I'd say more, but I'm late for work

10-23-2007, 11:55 AM	#18 (permalink)
Ustwo Pissing in the cornflakes	You mean the poor arn't paying for pretty much anything in this country? The problem with the tax code is the poor don't pay enough, they have no investment in the country persay, and by default ANY tax cut helps 'the rich'. Its easy to be 'progressive' with other peoples money. __________________ Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps.

10-23-2007, 01:14 PM	#19 (permalink)
Rekna Junkie	It is a big circle. The government gives to the poor who in turn are taxed by the rich who in turn are taxed by the government. The rich get back any money they loose to taxes by exploiting other people who are predominantly poor. Now not all rich people exploit others but i'd suggest most big money can be traced back to some sort of exploitation like under paying employees, over charging customers, etc.

10-24-2007, 12:58 PM	#24 (permalink)
aceventura3 Junkie Location: Ventura County	Your post begs the question of how the top 10% accumulated 70% of the "wealth" in this nation? I would argue that the majority of those top 10% started poor or middle class. I would further argue that the top 10% is dynamic, meaning the top 10% today are not the same top 10% ten years ago. And since about 35% of the population is 24 years-old or less (generally people in this category have no assets, in case you did not know and are one of the few with a big trust fund), seems to me that you might want to do some adjusting to that 50% of the population only having 2.5% of the assets number. __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

10-25-2007, 07:36 AM	#27 (permalink)
host Banned	I suspect you are saying that you object to any instance of the majority using their superior voting numbers to legislate the redistribution of wealth away from the few who own most of it, into the control of everyone else....even if the holding of all assets in the country...now in excess of 70 percent by the top ten percent...were to rise to their holding 90 percent of all of the wealth. You do not recognize, as a negative for the majority, the power and influence that the huge wealth advantage buys the wealthy elite. You advocate for a political system that does not "interfere" with wealth accumulation, even if it results in poverty and subsistence living for the vast majority. If the wealthiest end up with 90 percent of the wealth...do you think that they would be positioned to pay higher or lower wages to laborers than they currently pay? Do you think that they did not "interfere" with, what would have been a predictable process of majority rule...with the priorities of the majority routinely implemented via legislation....by buying the votes of the peoples' representatives....to block legislation that the wealthy perceived as negatively impacting their further wealth accumulation, or preservation? Our country is skewed now to an extreme where more than 70 percent of all assets are controlled by ten percent of the residents..... wealth distribution here is much closer to that occurring today in Mexico or in Venezuela, than in Denmark or Sweden..... Do you think that this is so, because of non-intervention by government....in the US and Mexico, compared to, in Denmark or Sweden? Can you consider that the distribution of wealth here is mitigated by the wealthy blocking the political influence of the majority, as it is in Mexico....using the government to create conditions that maximize the profits and income of a few who pay to make the government work for them.... whereas the majority in Denmark and Sweden have summoned the political power of their numerical majority to make their governments responsive to their priorities, to the detriment of their wealthiest class?

10-25-2007, 01:07 PM	#32 (permalink)
aceventura3 Junkie Location: Ventura County	My problem is that you put together tons of random data without connecting them to support a point. O.k. there are rich people. You want to tax them in order to redistribute wealth. Once everyone is equal and there is no incentive to work harder, work smarter, save more, invest, take risks, etc., then what? I don't know what you want me to prove? I don't know where you want to go with the discussion. I believe smart people, people willing to work harder and smarter, people willing to take calculated risks will always rise to the top. You are correct there is nothing to discuss other than nit picking the data you post or the data I post. __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

10-26-2007, 06:20 AM	#33 (permalink)
aceventura3 Junkie Location: Ventura County	{added} One last thing to put wealth creation in perspective: If you and I did everything in life exactly the same except that at age 22 I buy a car for $10,000 and you buy a car for $20,000, I invest $10,000 earning 10%. After 30 years I will have $198,000 more money than you. Then if every 5 years I spend $10,000 less each time we buy a car over that 30 year period and I invest the difference earning 10%, I will have $480,000 more money than you. So, after a life time of buying modest vehicles compared to you, you would have the government take the money I saved and give some of it to you?!? I am happy we have the 2nd Amendment! __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."